Allegion’s second quarter was marked by robust performance in its core nonresidential Americas segment, which management credited as the primary driver behind the company’s revenue and margin strength. CEO John Stone emphasized that continued demand in institutional verticals, along with high single-digit organic growth in nonresidential, offset softness in the residential market. The electronics portfolio also contributed to segment growth, highlighted by the launch of SimonsVoss’s batteryless electronic cylinder. CFO Mike Wagnes noted that favorable pricing actions and volume in the Americas, combined with effective cost containment, helped maintain operating margins despite inflationary pressures and tariff-related costs.
Is now the time to buy ALLE? Find out in our full research report (it’s free).
Allegion (ALLE) Q2 CY2025 Highlights:
- Revenue: $1.02 billion vs analyst estimates of $1.01 billion (5.8% year-on-year growth, 1.5% beat)
- Adjusted EPS: $2.04 vs analyst estimates of $1.99 (2.7% beat)
- Adjusted EBITDA: $258.1 million vs analyst estimates of $252.2 million (25.3% margin, 2.3% beat)
- Management raised its full-year Adjusted EPS guidance to $8.08 at the midpoint, a 4.2% increase
- Operating Margin: 21.5%, in line with the same quarter last year
- Organic Revenue rose 3.2% year on year (5.2% in the same quarter last year)
- Market Capitalization: $14.15 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Allegion’s Q2 Earnings Call
- Joseph John O'Dea (Wells Fargo) asked about possible pull-forward demand ahead of tariff changes and the durability of nonresidential specification activity. CEO John Stone said there was no evidence of abnormal ordering, and spec activity remained robust.
- Jeffrey Todd Sprague (Vertical Research) questioned the sources of margin strength given acquisition and tariff headwinds. CFO Mike Wagnes attributed margin gains to favorable mix in nonresidential Americas and productivity improvements.
- Julian C.H. Mitchell (Barclays) sought clarity on drivers of the EPS guidance raise and FX impacts. Wagnes explained that foreign exchange, acquisitions, and strong first-half operational performance were primary drivers of the guidance increase.
- Brett Logan Linzey (Mizuho) probed the acquisition pipeline and whether recent deal flow accelerated long-term targets. Stone said the pipeline remains active and integration capabilities are strong, anticipating continued profitable growth from M&A.
- Tomo Sano (JPMorgan) inquired about the outlook for the international segment and margin contributions from ELATEC. Wagnes confirmed ELATEC is margin accretive and expects international growth to remain roughly flat, benefiting from acquisitions and currency.
Catalysts in Upcoming Quarters
In the quarters ahead, the StockStory team will monitor (1) sustained growth in nonresidential Americas, especially in institutional end markets, (2) the pace and profitability of integrating recent acquisitions like ELATEC and Gatewise, and (3) Allegion’s ability to maintain margin discipline as tariff and inflation dynamics evolve. Progress in expanding the electronics portfolio and successful navigation of the residential downturn will also be key signposts.
Allegion currently trades at $163.11, up from $154.38 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2024, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.