A month has gone by since the last earnings report for Allegion (ALLE). Shares have lost about 4.5% 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 Q1 Earnings Miss Estimates, Revenues Rise Y/Y
Allegion’s first-quarter 2026 adjusted earnings of $1.80 per share missed the Zacks Consensus Estimate of $1.88. The bottom line decreased 3.2% year over year.
Revenue Details
Allegion’s revenues were $1.03 billion, which increased 9.7% year over year. Organic revenues increased 2.6%, driven by price realization. Revenues beat the Zacks Consensus Estimate of $1.02 billion. While acquired assets boosted revenues by 4.8%, foreign currency had a positive impact of 2.3%.
It reports revenues under two segments. A brief discussion of quarterly results is provided below:
Revenues from Allegion Americas increased 6.9% year over year to $809.9 million. The figure accounted for 78.4% of the quarter’s revenues. Our estimate for segmental revenues was $807.1 million. Organic revenues increased 4.5%, driven by solid momentum in the non-residential and electronics businesses.
Operating income for the segment was $215.1 million, up 1.8% year over year. Our estimate was $209.7 million.
Revenues from Allegion International were $223.7 million, up 21.5% year over year. The metric accounted for 21.6% of the quarter’s revenues. Organic revenues decreased 5.3%. Segmental operating income was $8.3 million, down 29.1% year over year.
Allegion’s Margin Profile
In the quarter, Allegion’s cost of revenues increased 11.5% year over year to $579.1 million. Gross profit was $454.5 million, up 7.5% year over year, while the gross margin declined 90 basis points (bps) to 44%.
Selling and administrative expenses increased 14.6% year over year to $259.2 million. Adjusted EBITDA was $236.8 million, reflecting a year-over-year increase of 3.9%. The margin was 22.9%, down 130 basis points on a year-over-year basis.
Adjusted operating income increased 2.6% year over year to $218.9 million. The adjusted margin was 21.2%, down 150 basis points year over year. Interest expenses were $24.2 million, down 2% year over year. The effective tax rate (on an adjusted basis) was 20.1%, up from 16.1% in the year-ago quarter.
Balance Sheet and Cash Flow
While exiting first-quarter 2026, Allegion had cash and cash equivalents of $308.9 million compared with $356.2 million at the end of 2025. Long-term debt was $2.03 billion, higher than $1.98 billion at 2025-end.
In the first three months of 2026, it generated net cash of $101.3 million from operating activities, reflecting a decrease of 3.1% year over year. Capital expenditure was $21 million, in line with the year-ago period. For the first three months of 2026, the available cash flow was $80.3 million.
Allegion repurchased shares for $40.6 million. Dividends paid out totaled $47.4 million, reflecting an increase of 8.7% year over year.
Allegion’s 2026 Outlook
The company has raised its 2026 revenue guidance. Allegion expects revenues to increase in the range of 6-8% year over year, higher than 5-7% projected earlier. It continues to expect organic revenues to grow in the range of 2-4%.
Adjusted earnings are still 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 flat trend in estimates revision.
VGM Scores
At this time, Allegion has a average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Allegion has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Allegion PLC (ALLE): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).