Allegion (ALLE) Down 11% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Allegion (ALLE). Shares have lost about 11% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Allegion due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Allegion PLC before we dive into how investors and analysts have reacted as of late.Allegion's Q4 Earnings Miss Estimates, Revenues Increase Y/YAllegion’s fourth-quarter 2025 adjusted earnings of $1.94 per share miss the Zacks Consensus Estimate of $2.01. However, the bottom line increased 4.3% year over year.In 2025, the company’s adjusted earnings were $8.14 per share, up 8.1% year over year.Revenue DetailsAllegion’s revenues were $1.03 billion, which increased 9.3% year over year. Organic revenues increased 3.3%, driven by price realization. Revenues were in line with the Zacks Consensus Estimate.Acquired assets boosted revenues by 4.4%. Foreign currency had a positive impact of 1.6%.In 2025, it reported net revenues of $4.07 billion, which increased 7.8% year over year.It reports revenues under two segments. A brief discussion of quarterly results is provided below:Revenues from Allegion Americas increased 6.1% year over year to $795.5 million. The figure accounted for 77% of the quarter’s revenues. Our estimate for segmental revenues was $798.6 million. Organic revenues increased 4.8%, driven by solid momentum in the non-residential business.Operating income for the segment was $206.1 million, up 6.3% year over year. Our estimate was $224.1 million.Revenues from Allegion International were $237.7 million, up 21.5% year over year. The metric accounted for 23% of the quarter’s revenues. Our estimate for segmental revenues was $230.8 million. Organic revenues decreased 2.3%.Segmental operating income was $29.4 million, up 66.1% year over year. Our estimate was $33.0 million.Allegion’s Margin ProfileIn the quarter, Allegion’s cost of revenues increased 8.5% year over year to $573.7 million. Gross profit was $459.5 million, up 10.3% year over year, while the gross margin jumped 40 basis points (bps) to 44.5%.Selling and administrative expenses increased 7.7% year over year to $249.9 million. Adjusted EBITDA was $248.2 million, reflecting a year-over-year increase of 11%. The margin was 24%, up 40 basis points on a year-over-year basis.Adjusted operating income increased 10.6% year over year to $231.3 million. The adjusted margin was 22.4%, up 30 basis points year over year. Interest expenses were $25.1 million, down 0.4% year over year. The effective tax rate was 19.8%, up from 11.2% in the year-ago quarter.Balance Sheet and Cash FlowWhile exiting fourth-quarter 2025, Allegion had cash and cash equivalents of $356.2 million compared with $503.8 million at the end of 2024. Long-term debt was $1.98 billion, in line with the year-ago quarter.In 2025, it generated net cash of $783.8 million from operating activities, reflecting an increase of 16.1% year over year. Capital expenditure was $98.1 million, up 6.5% year over year. For the full year, the available cash flow was $685.7 million.Allegion repurchased shares for $80.0 million. Dividends paid out totaled $175.3 million, reflecting an increase of 5% year over year.Allegion’s 2026 OutlookThe company has issued 2026 guidance. Allegion expects revenues to increase in the range of 5-7% from the year-ago level.  ALLE anticipates organic revenues to grow in the range of 2-4%.Adjusted earnings are projected to be in the range of $8.70-$8.90 per share. The company estimates available cash flow to be 85-95% of adjusted net income. Adjusted effective tax rate is projected to be approximately 18-19%.How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a downward trend in fresh estimates.VGM ScoresCurrently, Allegion has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Allegion has a Zacks Rank #3 (Hold). 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Click to get this free report Allegion PLC (ALLE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks