Does Martin Marietta’s Recent 20.8% Surge Still Justify Its Premium Price in 2025?

Thinking about whether you should buy, hold, or trim your position in Martin Marietta Materials? You're not alone. Plenty of investors are weighing their next move after a steady stretch for this construction aggregates leader. Shares are up an impressive 20.8% this year, with a strong five-year run of 130.6%. In the last week, however, the stock dipped 2.4%. This mix of short-term volatility and long-term growth has caught a lot of eyes.

Behind these numbers, the company has attracted attention for its role in major infrastructure projects, supported by policy tailwinds and renewed interest in large-scale construction nationwide. Even with positive momentum in the industry, Martin Marietta's stock hasn’t been seen as a bargain recently. In fact, based on our six-point valuation check, the company scores a 0. This means it does not meet any of our standard measures for being undervalued.

If you’re wondering whether this high-flyer is still worth the premium, you’re in the right place. Next, we will examine exactly how we determine a fair value for the stock using proven valuation methods. Stay with us to discover an even more insightful way to evaluate Martin Marietta’s true worth before we wrap up.

Martin Marietta Materials scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Martin Marietta Materials Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company’s true value by projecting its future cash flows and discounting them back to today, allowing investors to see what the business is worth based on its own cash-generating power rather than only market sentiment. For Martin Marietta Materials, this approach relies on detailed projections of its Free Cash Flow (FCF).

Currently, Martin Marietta Materials generates $1.15 Billion in annual Free Cash Flow. Looking ahead, analysts forecast $1.31 Billion in FCF by the end of 2027, with Simply Wall St extrapolating this trend even further. Over the next decade, projections climb to roughly $1.84 Billion by 2035. These figures highlight steady annual growth in the company’s ability to generate cash.

Using the 2 Stage Free Cash Flow to Equity model, the DCF analysis estimates an intrinsic value of $467.72 per share. However, compared to the current market price, this implies the stock is trading at a 31.9% premium, which means Martin Marietta Materials is significantly overvalued on a DCF basis.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Martin Marietta Materials.

Story Continues

MLM Discounted Cash Flow as at Oct 2025

Our Discounted Cash Flow (DCF) analysis suggests Martin Marietta Materials may be overvalued by 31.9%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Martin Marietta Materials Price vs Earnings

Price-to-Earnings (PE) is a go-to valuation metric when assessing profitable companies like Martin Marietta Materials. Because it connects the company’s share price directly to the earnings it generates, the PE ratio offers a clear snapshot of how much investors are paying for each dollar of profit. For companies producing steady earnings, it helps to set expectations on what seems a reasonable price, especially compared to peers and broader industry trends.

Growth prospects and risk play a big part in shaping what’s considered a “normal” or “fair” PE. Higher growth usually justifies a higher PE, as investors anticipate bigger future profits; greater risk warrants a discount. For Martin Marietta Materials, the current PE stands at 33.8x, noticeably above the Basic Materials industry average of 15.4x and its peer average of 26x. At first glance, this could give the impression that the stock is expensive relative to its competitors.

However, Simply Wall St’s Fair Ratio, calculated at 22.8x, goes further than broad comparisons. This proprietary metric blends in the company’s expected earnings growth, profit margins, risk profile, industry sector, and market cap, offering a tailored perspective that traditional industry or peer averages cannot match. Comparing the Fair Ratio (22.8x) to the actual PE (33.8x), Martin Marietta Materials appears overvalued according to this more comprehensive benchmark.

Result: OVERVALUEDNYSE:MLM PE Ratio as at Oct 2025

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Martin Marietta Materials Narrative

Earlier we mentioned there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a simple, dynamic tool that lets you tell the story behind a company’s numbers. It is your view on where revenue, earnings, and margins are headed and what fair value that could justify. Narratives connect the big picture of Martin Marietta Materials to a quantitative forecast, then bridge that to a fair value, helping you see when the current price looks like a deal or a warning sign.

On Simply Wall St, millions of investors use the Community page to share and compare Narratives, making it quick and accessible to build or adjust your own. As fresh news or earnings are released, Narratives update instantly, so your perspective stays up to date. For example, some expect Martin Marietta’s price to reach $725 based on strong infrastructure tailwinds, while others are cautious, estimating as low as $440 if construction demand softens or costs rise. Narratives empower you to weigh these stories, see how your assumptions stack up, and decide whether to buy, hold, or sell, all with facts, clarity, and context.

Do you think there's more to the story for Martin Marietta Materials? Create your own Narrative to let the Community know!NYSE:MLM Community Fair Values as at Oct 2025

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include MLM.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

View Comments