Over the past six months, Tecnoglass’s stock price fell to $46.13. Shareholders have lost 12.1% of their capital, which is disappointing considering the S&P 500 has climbed by 8.4%. This may have investors wondering how to approach the situation.
Is there a buying opportunity in Tecnoglass, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free.
Why Is Tecnoglass Not Exciting?
Despite the more favorable entry price, we’re swiping left on Tecnoglass for now. Here are three reasons we avoid TGLS, plus one stock we’d rather own.
1. EPS Took a Dip Over the Last Two Years
Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.
Sadly for Tecnoglass, its EPS declined by 1.7% annually over the last two years while its revenue grew by 10.8%. This tells us the company became less profitable on a per-share basis as it expanded.
2. Free Cash Flow Margin Dropping
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
As you can see below, Tecnoglass’s margin dropped by 10.9 percentage points over the last five years. If its declines continue, it could signal increasing investment needs and capital intensity. Tecnoglass’s free cash flow margin for the trailing 12 months was breakeven.
3. New Investments Fail to Bear Fruit as ROIC Declines
ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).
Unfortunately, Tecnoglass’s ROIC has decreased significantly over the last few years. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities.
Final Judgment
Tecnoglass isn’t a terrible business, but it doesn’t pass our quality test. Following the recent decline, the stock trades at 17.3× forward P/E (or $46.13 per share). This valuation multiple is fair, but we don’t have much faith in the company. We’re pretty confident there are superior stocks to buy right now. We’d suggest looking at a safe-and-steady industrials business benefiting from an upgrade cycle.
Stocks We Would Buy Instead of Tecnoglass
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
