Tecnoglass Holdings Inc. (TGLS) stock intrinsic value fair value estimate & owner earnings analysis

Tecnoglass (a Cayman Islands company whose manufacturing is mostly in Colombia) makes architectural glass, windows, aluminum products and facades. Almost all of its sales are in the United States: $932.9 million of $983.6 million in 2025, split between commercial projects ($529.5 million) and single-family residential ($403.4 million). Florida is a substantial share of revenue and backlog, and about 13.1% of the U.S. backlog is now outside Florida. No single customer exceeds 10% of revenue. The competitive edge is a low-cost, vertically integrated plant that has produced gross margins of 42.7% to 46.9% over 2023-2025 (42.8% in 2025). How we measure earnings. We start from operating cash flow, remove the swings from receivables, inventory, payables and contract balances, and subtract capital spending. Growth spending is only separated out using the company's own historical spending-to-sales ratio (about 7.3% of sales), which leaves most of the roughly $101 million spent on plant and equipment in 2025 counted as ongoing cost. That is a conservative treatment: depreciation is only $36.8 million, so some of this spending is probably expansion, but we cannot show that from the filing and do not credit it. The company reports no stock compensation line after 2017. On this basis earnings per share were about $1.39 (2021), $2.87 (2022), $2.48 (2023), $2.54 (2024) and $1.79 (2025). Starting level. 2021 was still a ramp-up year and 2022 was the peak, before gross margin narrowed in 2023-2025 on a stronger Colombian peso, wage increases and, in 2025, tariffs. Trailing owner earnings fell about 29% in 2025 (from $2.54 to $1.79) on higher plant spending and $19.9 million of new tariff expense. Net income in the first half of 2026 was $56.4 million against $86.3 million a year earlier, so the weaker level has shown up over several quarters. We therefore start all cases from roughly $2.00 per share, below the 2023-2025 median of about $2.48 but above 2025's $1.79. That is a judgement: 2025 plant spending was unusually high, but we cannot prove it falls. The base case is flat from the first year rather than growing, because we have no dated, filed reason to expect otherwise. Base case, about $33 per share. Earnings hold at about $2.00 per share for ten years and continue at that level afterwards. Evidence: three straight years of gross margin above 42%, a growing U.S. backlog, permits and product approvals for the Florida market (including those acquired with Continental Glass in April 2025), and a low-cost manufacturing base in Colombia. We give no credit for further volume growth, new products or margin recovery, because owner earnings have not grown since 2022 even as sales rose from $717 million to $984 million: added sales have been absorbed by tariffs, wages and heavy capital spending. Bear case, about $9 per share. Owner earnings fall to about $1.00 per share and stay there for ten years, then fade to zero over the following ten. Named pressures: U.S. tariffs on aluminum under Section 232 plus the 2025 import duties, which cost $19.9 million in 2025 and whose legal status is being challenged in court; a stronger Colombian peso (a 5.9% appreciation in 2024 helped cut gross margin from 46.9% to 42.7%); and higher debt. Long-term debt has risen from $175 million at the end of 2025 to about $228 million by June 2026, borrowed under a revolving facility at roughly 7% interest that runs to December 2030. Construction activity is also cyclical: 2020 sales fell 12.6%. We do not assume the business disappears, but we credit no earning power beyond twenty years. Bull case, about $57 per share. Owner earnings begin near $2.60 per share, close to the 2023-2024 level, and grow 4% a year for ten years, then stay level. That rests on levers the company is already executing: new vinyl window assembly lines with roughly $300 million of annualized capacity, the Continental Glass acquisition, and a backlog that lifted sales 6.8% in 2024 and 10.5% in 2025 while gross margin was steady. It does not assume tariff relief or a market upturn. What could make this wrong. Colombian cost inflation and peso strength, tariff policy, and Florida housing and commercial construction demand are outside management's control. A large share of cash flow is reinvested, so what reaches shareholders depends on how much of the recent spending was truly required; we could not separate maintenance from expansion spending using the filings. The first-half 2026 figures come only from structured financial data because the quarterly report text was not reviewed.