GMS (GMS) AI Stock Analysis

• Market Cap: $2.88B
• Dividend Yield: N/A
• Average Volume (3M): 404.06K
• Price to Earnings (P/E): 20.5
• Beta (1Y): 0.91
• Revenue Growth: 3.71%
• EPS Growth: -49.38%
• Country: US
• Employees: 7,624
• Sector: Industrials
• Sector Strength: 78
• Industry: Construction
• EPS (TTM): 0.92
• Shares Outstanding: 38,389,076
• 10 Day Avg. Volume: 252,829
• 30 Day Avg. Volume: 404,056
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.72
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 2.78
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $78.43
• Price Target Upside: 8.70% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

GMS receives an overall score of 65, reflecting a balanced view of both strengths and challenges. The company's strong revenue growth and stable equity base are significant positives. However, challenges in profitability and a bearish technical trend weigh on the score. The valuation is fair but not particularly attractive, and cautious sentiment from the earnings call contributes to a more conservative outlook. The strategic focus on diversification and expansion through M&A offers a positive future prospect, though.

Positive Factors

Cost Savings

GMS only just began to see the benefits of its $30 million annualized cost savings program, and the savings could more than double in the next quarter to reach run-rate.

Stock Repurchase

GMS repurchased ~$52 million in stock this quarter and extended its authorization, expected to be a priority moving forward.

Wallboard Pricing

The resilience of wallboard pricing is encouraging, reflecting improved sentiment around pricing.

Negative Factors

End Market Challenges

There is a challenged end market backdrop across each vertical and limited visibility on improvement in the future.

Single-Family Market Risk

There is a risk on the single-family side if builders feel the need to pull back on inventory as both new home and existing home months' supply are rising further.

Wallboard Price/Cost Concerns

Concerns around wallboard price/cost and near-term gross margins contribute to a less favorable risk/reward at current levels.

GMS Business Overview & Revenue Model

Company Description

GMS Inc. distributes wallboard, ceilings, steel framing and complementary construction products in the United States and Canada. The company offers ceilings products, including suspended mineral fibers, soft fibers, and metal ceiling systems primarily used in offices, hotels, hospitals, retail facilities, schools, and various other commercial and institutional buildings. It also provides steel framing products, such as steel tracks, studs, and various other steel products used to frame the interior walls of a commercial or institutional building; and insulation, lumber and other wood products, ready-mix joint compound, and various other interior construction products, as well as ancillary products comprising tools, fasteners, and safety products. In addition, the company distributes acoustical ceilings, steel framing, insulation, and related building products, as well as commercial and residential building materials. It serves professional contractors and homebuilders. As of April 30, 2022, the company operated 300 branches across 44 states and the District of Columbia, as well as 6 provinces in Canada. It also operates a network of approximately 300 distribution centers. GMS Inc. was founded in 1971 and is headquartered in Tucker, Georgia.

How the Company Makes Money

GMS Inc. generates revenue primarily through the sale and distribution of building materials, including gypsum wallboard, acoustical ceiling systems, and other interior construction products. The company's key revenue streams include direct sales to contractors and builders and retail sales to DIY customers. GMS leverages its extensive distribution network and long-standing relationships with manufacturers to offer a broad product selection at competitive prices. Additionally, the company's earnings are bolstered by strategic acquisitions that expand its geographic reach and product offerings, as well as partnerships with key suppliers that enhance its market position.

GMS Financial Statement Overview

Summary

GMS demonstrates strong revenue growth and a stable equity base, which are positive indicators of financial health. However, challenges in profitability margins and potential risks associated with increasing liabilities and cash flow volatility need addressing. The company's ability to manage these aspects will be crucial for sustaining growth and improving financial stability going forward.

Income Statement

GMS has shown a consistent revenue growth trend over the years, with a notable increase in total revenue from $3.3 billion in 2021 to $5.6 billion in TTM (Trailing-Twelve-Months) 2025. The gross profit margin has remained relatively stable, indicating effective cost management. However, there is a decreasing trend in net income, which affects the net profit margin. The EBIT and EBITDA margins have also seen a decline, suggesting potential operational challenges. Continued revenue growth is a positive indicator, but profitability margins need attention.

Balance Sheet

The balance sheet shows a strong equity base, with stockholders' equity growing from $822 million in 2021 to $1,393 million in TTM 2025, reflecting a solid financial foundation. The debt-to-equity ratio has improved, indicating reduced leverage, but total liabilities have grown, which poses a risk. The equity ratio remains healthy, showcasing a stable financial position. However, the return on equity has decreased, suggesting that the earnings generated from shareholders' equity have not kept pace with equity growth.

Cash Flow

GMS exhibits a robust operating cash flow, maintaining a positive trend over the years. The free cash flow is also strong, with a solid free cash flow to net income ratio, indicating efficient cash generation relative to net income. However, fluctuations in free cash flow growth rates suggest potential volatility in future cash flows. The operating cash flow to net income ratio is favorable, highlighting effective cash management, but the investing cash flow indicates significant expenditures, which could impact future liquidity.

Breakdown
Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
5.50B	5.33B	4.63B	3.30B	3.24B
	Gross Profit
1.78B	1.73B	1.49B	1.06B	1.06B
	EBIT
442.84M	505.21M	418.92M	190.95M	164.42M
	EBITDA
585.89M	640.25M	542.15M	299.86M	281.91M
	Net Income Common Stockholders
276.08M	332.99M	273.44M	105.56M	23.38M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
166.15M	164.75M	101.92M	167.01M	210.91M
	Total Assets
3.76B	3.27B	3.10B	2.48B	2.29B
	Total Debt
1.53B	1.29B	1.33B	1.10B	1.22B
	Net Debt
1.37B	1.12B	1.23B	935.18M	1.01B
	Total Liabilities
2.30B	1.99B	2.04B	1.66B	1.65B
	Stockholders Equity
1.46B	1.27B	1.06B	822.46M	633.98M
Cash Flow		Free Cash Flow
376.00M	389.06M	138.53M	123.43M	277.89M
	Operating Cash Flow
433.25M	441.74M	179.61M	153.30M	303.08M
	Investing Cash Flow
-430.77M	-111.47M	-387.21M	-63.59M	-47.10M
	Financing Cash Flow
-437.00K	-265.61M	143.28M	-136.62M	-91.33M

GMS Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 72.15
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GMS, the sentiment is Neutral. The current price of 72.15 is above the 20-day moving average (MA) of 72.05, below the 50-day MA of 73.64, and below the 200-day MA of 85.93, indicating a neutral trend. The MACD of 0.08 indicates Negative momentum. The RSI at 53.53 is Neutral, neither overbought nor oversold. The STOCH value of 80.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GMS.

GMS Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ROCK	75 Outperform	$1.71B	12.94	13.70%	―	-5.13%	16.93%
BECN	72 Outperform	$7.72B	25.25	16.54%	―	4.93%	―
BLDR	67 Neutral	$12.61B	14.36	19.62%	―	-5.49%	-33.51%
GMS	65 Neutral	$2.88B	20.54	10.37%	―	3.71%	-49.38%
BXC	64 Neutral	$547.28M	14.85	5.96%	―	-4.22%	-16.01%
Sector *	64 Neutral	$4.27B	11.80	5.31%	249.79%	4.07%	-9.02%
JBI	62 Neutral	$1.02B	15.17	13.56%	―	-9.61%	-47.79%

GMS Corporate Events

GMS to Present Strategic Focus to Investors

GMS announced a presentation to investors on March 11, 2025, highlighting its strategic focus on diversifying and expanding its product offerings. The company has been actively pursuing mergers and acquisitions to strengthen its market position, with recent expansions into key metropolitan areas. GMS’s efforts to align operations with market realities and its disciplined capital allocation strategy are expected to enhance its financial performance and stakeholder value.