TopBuild (BLD) AI Stock Analysis

• Market Cap: $8.40B
• Dividend Yield: N/A
• Average Volume (3M): 407.13K
• Price to Earnings (P/E): 13.6
• Beta (1Y): 1.61
• Revenue Growth: 2.60%
• EPS Growth: 5.15%
• Country: US
• Employees: 13,984
• Sector: Industrials
• Sector Strength: 61
• Industry: Engineering & Construction
• EPS (TTM): 20.32
• Shares Outstanding: 29,245,308
• 10 Day Avg. Volume: 405,122
• 30 Day Avg. Volume: 407,131
• PEG Ratio: 2.64
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.64
• Price to Cash Flow (P/CF): 8.20
• P/FCF Ratio: 8.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $382.20
• Price Target Upside: 28.63% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

TopBuild demonstrates strong financial performance and a fair valuation, which are bolstered by strategic growth initiatives and a robust M&A pipeline. However, technical analysis points to a bearish trend, and earnings guidance reflects potential challenges in residential markets and economic uncertainties. These factors collectively result in a moderately favorable overall stock score.

Positive Factors

Commercial and industrial activity

Commercial and industrial activity is improving, with previously delayed projects starting to launch and a very active bidding market.

M&A and capital management

BLD is expected to step up M&A and use the excess cash flow for buybacks, supported by a pristine balance sheet and strong free cash flow generation.

Market share and competitive advantage

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 and construction

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.

Multifamily starts

Multifamily starts, which contribute to about 10% of sales, are expected to continue as a headwind due to weaker starts and a decreasing backlog.

Sales headwinds

BLD is expecting sales headwinds each quarter, most pronounced in the first quarter, driven by tough weather conditions and one less shipping day.

TopBuild Business Overview & Revenue Model

Company Description

TopBuild Corp., together with its subsidiaries, engages in the installation and distribution of insulation and other building products to the construction industry. The company operates in two segments, Installation and Specialty Distribution. It provides insulation products and accessories, glass and windows, rain gutters, afterpaint products, fireproofing products, garage doors, fireplaces, closet shelving, roofing materials, and other products; and insulation installation services. The company also offers various services and tools to assist builders in applying the principles of building science to new home construction, which include pre-construction plan reviews, diagnostic testing, and various inspection services; and home energy rating services. In addition, it distributes building and mechanical insulation, insulation accessories, and other building product materials for the residential, commercial, and industrial end markets. The company serves single-family homebuilders, single-family custom builders, multi-family builders, commercial general contractors, remodelers, and individual homeowners, as well as insulation contractors, gutter contractors, weatherization contractors, other contractors, dealers, metal building erectors, and modular home builders. It operates approximately 235 installation branches and 175 distribution centers in the United States and Canada. The company was formerly known as Masco SpinCo Corp. and changed its name to TopBuild Corp. in March 2015. TopBuild Corp. was incorporated in 2015 and is headquartered in Daytona Beach, Florida.

How the Company Makes Money

TopBuild 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.

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.

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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 297.13
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 297.13 is below the 20-day moving average (MA) of 301.72, below the 50-day MA of 311.67, and below the 200-day MA of 362.35, indicating a bearish trend. The MACD of -1.88 indicates Negative momentum. The RSI at 46.75 is Neutral, neither overbought nor oversold. The STOCH value of 45.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BLD.

TopBuild Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BECN	72 Outperform	$7.54B	21.32	18.96%	―	7.05%	―
WCC	70 Outperform	$6.69B	10.51	14.34%	1.23%	-2.53%	-4.03%
MLI	68 Neutral	$7.91B	13.15	23.67%	1.24%	10.19%	0.35%
MIDD	68 Neutral	$6.93B	15.83	12.44%	―	-4.00%	6.53%
BLD	68 Neutral	$8.40B	13.58	26.09%	―	2.60%	5.15%
CR	67 Neutral	$8.50B	29.24	18.96%	0.64%	9.65%	―
Sector *	62 Neutral	$7.67B	13.25	3.04%	3.47%	3.63%	-13.99%

TopBuild Corporate Events

TopBuild Announces Record Sales and Share Buyback Plan

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.