Over the past six months, Silgan Holdings’s stock price fell to $35.09. Shareholders have lost 7.4% of their capital, which is disappointing considering the S&P 500 has climbed by 21.1%. This might have investors contemplating their next move.
Is there a buying opportunity in Silgan Holdings, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Do We Think Silgan Holdings Will Underperform?
Even with the cheaper entry price, we’re cautious about Silgan Holdings. Here are three reasons why SLGN doesn’t excite us, plus one stock we’d rather own.
1. Long-Term Revenue Growth Disappoints
Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Silgan Holdings’s 4.7% annualized revenue growth over the last five years was tepid. This was below our standard for the industrials sector.
2. Low Gross Margin Reveals Weak Structural Profitability
Gross profit margin is a critical metric to track because it sheds light on its pricing power, complexity of products, and ability to procure raw materials, equipment, and labor.
Silgan Holdings has bad unit economics for an industrials business, signaling it operates in a competitive market. As you can see below, it averaged a 16.8% gross margin over the last five years. That means Silgan Holdings paid its suppliers a lot of money ($83.16 for every $100 in revenue) to run its business.
3. EPS Barely Growing
Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.
Silgan Holdings’s EPS grew at a weak 2.4% compounded annual growth rate over the last five years, lower than its 4.7% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.
Final Judgment
Silgan Holdings doesn’t pass our quality test. After the recent drawdown, the stock trades at 9.2× forward P/E (or $35.09 per share). While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are more exciting stocks to buy at the moment. We’d recommend looking at a safe-and-steady industrials business benefiting from an upgrade cycle.
Stocks We Would Buy Instead of Silgan Holdings
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth 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-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
