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TopBuild Corp (BLD)
NYSE:BLD
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TopBuild
(NYSE:BLD)68Neutral
Positive Factors
Financial Performance
TopBuild reported solid results as revenue, EBITDA, and EPS were in line with consensus expectations, driven by Specialty Distribution's growth.
Market Strategy
TopBuild has competitive advantages versus smaller competitors in the residential market and has potential to replicate these in commercial and mechanical areas.
Negative Factors
Interest Rates
Elevated interest rates continue to limit new construction as affordability remains a top concern for homebuyers and lending rates remain a high hurdle for developers.
TopBuild (BLD) vs. S&P 500 (SPY)
Market Cap
$8.63B
Dividend YieldN/A
Average Volume (3M)328.94K
Price to Earnings (P/E)14.5
Beta (1Y)2.11
Revenue Growth2.60%
EPS Growth5.15%
CountryUS
Employees14,012
SectorIndustrials
Sector Strength66
IndustryConstruction
Share Statistics
EPS (TTM)20.32
Shares Outstanding29,227,592
10 Day Avg. Volume448,585
30 Day Avg. Volume328,941
Financial Highlights & Ratios
PEG Ratio2.82
Price to Book (P/B)N/A
Price to Sales (P/S)1.62
Price to Cash Flow (P/CF)8.10
P/FCF Ratio8.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$376.86Price Target Upside23.61% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
TopBuild Business Overview & Revenue Model
Company DescriptionTopBuild Corp. (BLD) is a leading installer and distributor of insulation and other building products to the U.S. construction industry. The company operates primarily in two segments: Installation and Distribution. Its core services include the installation of insulation and the distribution of insulation and other building materials, serving both residential and commercial sectors. TopBuild's operations span across the United States, providing essential products and services that contribute to energy efficiency and environmental sustainability in construction projects.
How the Company Makes MoneyTopBuild generates revenue through its two main business segments: Installation and Distribution. In the Installation segment, the company provides installation services for insulation and other building products to builders, contractors, and homeowners. This segment benefits from new residential construction, commercial building projects, and renovation activities. In the Distribution segment, TopBuild sells insulation and complementary construction products to contractors and retailers, leveraging a network of distribution centers across the U.S. The company also forms strategic partnerships with manufacturers and suppliers to ensure a reliable supply chain. Its earnings are significantly influenced by the U.S. construction market trends, housing starts, and energy efficiency regulations.
TopBuild Financial Statement Overview
Summary
TopBuild is in a strong financial position with solid growth and profitability metrics. Revenue and profit margins show a positive trajectory, supported by effective cost management and strategic growth. The balance sheet reflects moderate leverage with a strong equity base. Cash flow generation is healthy, supporting ongoing operations and potential investments. However, slight dips in certain metrics warrant monitoring for sustained performance.Income Statement
TopBuild demonstrates strong financial performance with a consistent revenue growth trend from $2.62 billion in 2019 to $5.33 billion in 2024. The gross profit margin improved from 25.96% to 30.49% over the same period, indicating enhanced cost management and pricing power. The net profit margin has also strengthened, rising from 7.28% to 11.68%, highlighting improved profitability. However, there was a slight dip in EBIT margin from 17.22% in 2023 to 16.63% in 2024, which could be an area to monitor.85
Very Positive
Balance Sheet
The company maintains a stable financial position with a healthy equity ratio of 46.64% in 2024, reflecting a strong equity base relative to its total assets. The debt-to-equity ratio is moderate at 0.71, which suggests a balanced approach to leverage. Return on equity has shown consistent improvement, signifying efficient utilization of equity. However, a decrease in stockholders' equity in 2024 could pose a potential risk if the trend continues.78
Positive
Cash Flow
TopBuild's cash flow position is robust, with a strong operating cash flow to net income ratio of 1.25 in 2024, indicating effective cash generation from operations. The free cash flow to net income ratio is solid at 1.13, underscoring the company's ability to generate free cash flow. However, the free cash flow growth has slowed down, and the significant capital expenditure in recent years could impact future cash flow.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.33B | 5.19B | 5.01B | 3.49B | 2.72B | Gross Profit |
| 1.62B | 1.60B | 1.49B | 974.39M | 746.36M | EBIT |
| 886.34M | 895.02M | 797.16M | 476.42M | 355.05M | EBITDA |
| 1.05B | 1.03B | 922.19M | 555.81M | 418.19M | Net Income Common Stockholders |
| 622.60M | 614.25M | 555.99M | 324.02M | 247.02M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 400.32M | 848.57M | 240.07M | 139.78M | 330.01M | Total Assets |
| 4.74B | 5.16B | 4.61B | 4.26B | 2.82B | Total Debt |
| 1.58B | 1.57B | 1.68B | 1.68B | 793.96M | Net Debt |
| 1.18B | 721.87M | 1.44B | 1.54B | 463.96M | Total Liabilities |
| 2.53B | 2.60B | 2.68B | 2.62B | 1.47B | Stockholders Equity |
| 2.21B | 2.56B | 1.93B | 1.64B | 1.35B |
| Cash Flow | Free Cash Flow | |||
| 706.68M | 785.41M | 419.42M | 347.48M | 316.95M | Operating Cash Flow |
| 776.03M | 849.41M | 495.80M | 403.02M | 357.88M | Investing Cash Flow |
| -203.52M | -198.17M | -93.91M | -1.32B | -121.88M | Financing Cash Flow |
| -1.02B | -43.84M | -300.07M | 729.01M | -90.80M |
TopBuild Technical Analysis
Negative
304.87
Price Trends
324.05
Negative
348.15
Negative
375.36
Negative
Market Momentum
-9.45
Positive
40.86
Neutral
23.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BLD, the sentiment is Negative. The current price of 304.87 is below the 20-day moving average (MA) of 316.45, below the 50-day MA of 324.05, and below the 200-day MA of 375.36, indicating a bearish trend. The MACD of -9.45 indicates Positive momentum. The RSI at 40.86 is Neutral, neither overbought nor oversold. The STOCH value of 23.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BLD.
TopBuild Risk Analysis
TopBuild disclosed 39 risk factors in its most recent earnings report. TopBuild reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
TopBuild Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $12.32B | 19.55 | 12.74% | 1.73% | 13.41% | -44.36% | |
68 Neutral | $10.68B | 18.15 | 42.39% | 1.55% | 3.33% | 11.51% | |
68 Neutral | $8.63B | 14.53 | 28.18% | ― | 2.60% | 5.15% | |
66 Neutral | $7.16B | 15.37 | 31.68% | 0.46% | 0.64% | -1.15% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
60 Neutral | $15.37B | 19.32 | -118.61% | 1.63% | -1.74% | -6.91% |
* Industrials Sector Average
Performance Comparison
BLD
TopBuild
304.87
-106.86
-25.95%
EXP
Eagle Materials
220.89
-34.33
-13.45%
MAS
Masco
73.58
-1.65
-2.19%
OC
Owens Corning
148.95
-0.36
-0.24%
ALLE
Allegion
126.48
-0.08
-0.06%
TopBuild Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: 0.94% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
While TopBuild Corp. has demonstrated strong growth, a robust M&A pipeline, and healthy shareholder returns, it faces challenges such as multifamily declines, economic uncertainty, and margin pressures. The sentiment is balanced due to both significant achievements and notable challenges.Highlights
Nine Consecutive Years of Growth
2024 marks the ninth consecutive year of growth and profit expansion for TopBuild Corp., celebrating its ten-year anniversary as a public company.
Commercial Industrial Growth
The commercial industrial business saw growth both in the fourth quarter and for the full year, with delayed projects starting to move forward.
Strong Shareholder Returns
In 2024, TopBuild Corp. returned nearly $1 billion to shareholders through its share repurchase program, with a new $1 billion share buyback authorized.
Healthy M&A Pipeline
The M&A pipeline is described as very healthy, with eight acquisitions completed in 2024 and continued focus on acquisition opportunities.
Record Year for TopBuild Corp.
Since its spin nine years ago, TopBuild Corp. has grown sales at a CAGR of 14% and expanded adjusted EBITDA margins from 6.6% to 20.2%.
Lowlights
Multifamily Decline
Multifamily construction declined in double digits, impacting the overall residential business performance.
Interest Rate and Economic Uncertainty
Persistent inflation is keeping interest rates high, with ongoing economic and regulatory uncertainty creating challenges for the construction industry.
Gross Margin Pressure
Fourth quarter gross margins were 50 basis points lower than last year, driven by strategic price and volume decisions and labor pressures.
Price Compression in Certain Markets
Price pressures were noted in certain residential markets, particularly in spray foam and slower housing markets.
Uncertain Residential Market
External forecasts for housing starts in 2025 have been trimmed, with expectations of residential demand improvement remaining unclear.
Company Guidance
During the call, TopBuild Corp. provided guidance for 2025, projecting sales between $5.05 billion and $5.35 billion and adjusted EBITDA ranging from $925 million to $1.075 billion. The company expects residential volume to be down low single digits, with multifamily sales decreasing approximately 30% and single-family sales remaining flat. Commercial and industrial sales are anticipated to rise by low single digits. Price mix is expected to decline slightly due to ongoing pressures. Adjusted EBITDA margin is forecasted to be between 18.3% and 20.1%, reflecting a 100 basis point decline from the previous year. The guidance assumes interest expenses between $49 million and $55 million, a tax rate of 25% to 27%, and capital expenditures at 1.5% to 2% of sales. Importantly, the guidance does not include potential future mergers and acquisitions, although the company anticipates an active year in acquisitions given a healthy pipeline.TopBuild Corporate Events
Stock BuybackBusiness Operations and StrategyFinancial Disclosures
TopBuild Announces Record Sales and Share Buyback Plan
Positive
Feb 25, 2025
TopBuild Corp. reported its financial results for the fourth quarter and full year ending December 31, 2024, on February 25, 2025. The company achieved record sales of $5.3 billion for 2024, with an adjusted EBITDA of $1.07 billion, and completed eight acquisitions totaling $153.1 million in annual sales. For 2025, TopBuild projects sales between $5.05 to $5.35 billion and adjusted EBITDA ranging from $925 million to $1.075 billion, with a continued focus on acquisitions. The company also announced a new $1 billion share repurchase authorization, reflecting confidence in its strategic outlook and capital allocation.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.