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Installed Building Products (IBP)
NYSE:IBP
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Installed Building Products
(NYSE:IBP)
72Outperform
Positive Factors
Mergers and Acquisitions
IBP is confident in its strong M&A pipeline and plans to deploy capital for acquisitions, targeting markets like Southwest, Arizona, Indianapolis, Southeast, and Florida.
Operational Efficiency
Operationally IBP is in a better spot than recent years due to reduced supply chain, labor bottlenecks, and material availability stress.
Negative Factors
Macro Environment
Macro limits upside with the current operating backdrop largely unchanged, as elevated interest rates have essentially ground the housing markets sideways.
Weather Impact
Severe weather is expected to impact 1Q25 results, with construction sites nationally losing multiple days of production.
Installed Building Products (IBP) vs. S&P 500 (SPY)
Market Cap
$4.74B
Dividend Yield0.82%
Average Volume (3M)448.50K
Price to Earnings (P/E)18.7
Beta (1Y)1.89
Revenue Growth5.86%
EPS Growth5.81%
CountryUS
Employees10,800
SectorConsumer Cyclical
Sector Strength50
IndustryConstruction
Share Statistics
EPS (TTM)9.11
Shares Outstanding27,758,509
10 Day Avg. Volume385,815
30 Day Avg. Volume448,502
Financial Highlights & Ratios
PEG Ratio3.23
Price to Book (P/B)N/A
Price to Sales (P/S)1.63
Price to Cash Flow (P/CF)16.00
P/FCF Ratio13.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$195.44Price Target Upside13.99% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Installed Building Products Business Overview & Revenue Model
Company DescriptionInstalled Building Products, Inc., together with its subsidiaries, engages in the installation of insulation, waterproofing, fire-stopping, fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving and mirrors, and other products in the continental United States. The company offers a range of insulation materials, such as fiberglass and cellulose, and spray foam insulation materials. It is also involved in the installation of insulation and sealant materials in various areas of a structure, which includes basement and crawl space, building envelope, attic, and acoustical applications. In addition, the company installs a range of caulk and sealant products that control air infiltration in residential and commercial buildings; and waterproofing options, including sheet and hot applied waterproofing membranes, as well as deck coating, bentonite, and air and vapor systems. It serves homebuilders, multi-family and commercial construction firms, individual homeowners, and repair and remodeling contractors through a network of approximately 210 branch locations. The company was formerly known as CCIB Holdco, Inc. Installed Building Products, Inc. was founded in 1977 and is based in Columbus, Ohio.
How the Company Makes MoneyInstalled Building Products makes money primarily through the installation services it provides to residential and commercial builders. The company's revenue model is centered around contracts with builders and construction companies, where it installs a variety of building materials that are essential for new construction and remodeling projects. Key revenue streams include the installation of insulation products, which is a significant contributor due to the regulatory demand for energy-efficient buildings. Additionally, IBP generates income from the installation of other products like garage doors and rain gutters, which are critical components of building construction. The company benefits from strong relationships with builders and manufacturers, ensuring a steady supply of materials and consistent demand for its installation services. Strategic acquisitions and geographic expansion also contribute to its earnings by broadening its market reach and service capabilities.
Installed Building Products Financial Statement Overview
Summary
Installed Building Products demonstrates strong financial health with substantial revenue growth and profitability. The balance sheet reveals a stable asset base with manageable leverage, though debt levels require careful management. Cash flows have shown some volatility, indicating potential areas for improvement in cash management strategies.Income Statement
Installed Building Products has shown strong revenue growth, with a consistent upward trajectory over the years. The gross profit margin has remained healthy, indicating effective cost management. The EBIT and EBITDA margins are robust, reflecting operational efficiency. The net profit margin has increased, showcasing enhanced profitability.85
Very Positive
Balance Sheet
The company maintains a moderate debt-to-equity ratio, indicating reasonable leverage. The return on equity is strong, showcasing effective use of shareholder funds. The equity ratio is stable, reflecting a solid asset base. However, the company has a considerable amount of total debt, which should be monitored.78
Positive
Cash Flow
The free cash flow growth has been inconsistent, with fluctuations in capital expenditures affecting cash reserves. The operating cash flow to net income ratio is currently unavailable, hindering a complete assessment. Nevertheless, the company has managed its financing activities prudently.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.94B | 2.78B | 2.67B | 1.97B | 1.65B | Gross Profit |
| 994.50M | 930.70M | 827.78M | 589.52M | 509.97M | EBIT |
| 382.50M | 369.10M | 345.41M | 187.88M | 161.87M | EBITDA |
| 382.50M | 495.80M | 458.76M | 288.02M | 249.46M | Net Income Common Stockholders |
| 256.60M | 243.70M | 223.40M | 118.80M | 97.24M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 327.60M | 386.50M | 229.63M | 333.49M | 231.52M | Total Assets |
| 2.06B | 1.98B | 1.78B | 1.65B | 1.19B | Total Debt |
| 978.30M | 954.80M | 945.99M | 937.38M | 622.99M | Net Debt |
| 650.70M | 568.30M | 716.37M | 603.89M | 391.47M | Total Liabilities |
| 1.35B | 1.31B | 1.29B | 1.24B | 868.49M | Stockholders Equity |
| 705.30M | 670.30M | 493.50M | 416.84M | 319.18M |
| Cash Flow | Free Cash Flow | |||
| 251.40M | 278.60M | 232.26M | 101.33M | 147.20M | Operating Cash Flow |
| 340.00M | 340.20M | 277.90M | 138.31M | 180.79M | Investing Cash Flow |
| 5.60M | -103.40M | -158.67M | -278.44M | -77.79M | Financing Cash Flow |
| -239.80M | -79.90M | -223.09M | 242.09M | -49.36M |
Installed Building Products Technical Analysis
Negative
171.46
Price Trends
178.73
Negative
188.31
Negative
205.74
Negative
Market Momentum
-0.50
Negative
46.93
Neutral
34.01
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IBP, the sentiment is Negative. The current price of 171.46 is below the 20-day moving average (MA) of 172.30, below the 50-day MA of 178.73, and below the 200-day MA of 205.74, indicating a bearish trend. The MACD of -0.50 indicates Negative momentum. The RSI at 46.93 is Neutral, neither overbought nor oversold. The STOCH value of 34.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IBP.
Installed Building Products Risk Analysis
Installed Building Products disclosed 48 risk factors in its most recent earnings report. Installed Building Products 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
Installed Building Products Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $6.07B | 23.18 | 39.28% | 0.82% | 11.62% | 20.76% | |
72 Outperform | $4.74B | 18.75 | 37.31% | 0.82% | 5.86% | 5.81% | |
72 Outperform | $7.65B | 21.71 | 18.96% | ― | 7.05% | ― | |
71 Outperform | $12.20B | 19.36 | 12.63% | 1.75% | 13.41% | -44.36% | |
68 Neutral | $8.94B | 15.04 | 26.09% | ― | 2.60% | 5.15% | |
60 Neutral | $14.56B | 18.30 | -118.61% | 1.72% | -1.74% | -6.91% | |
59 Neutral | $12.26B | 11.12 | -0.55% | 3.78% | 1.42% | -20.63% |
* Consumer Cyclical Sector Average
Performance Comparison
IBP
Installed Building Products
171.46
-81.38
-32.19%
AWI
Armstrong World
140.88
18.72
15.32%
BECN
Beacon Roofing Supply
123.70
23.47
23.42%
MAS
Masco
69.54
-6.94
-9.07%
OC
Owens Corning
142.82
-23.39
-14.07%
BLD
TopBuild
304.95
-133.40
-30.43%
Installed Building Products Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 0.92% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, strategic acquisitions, and shareholder returns, indicating a positive outlook. However, challenges such as decreased gross margins, a soft market environment, and weather-related disruptions present potential headwinds.Highlights
Record Year of Revenue and Profitability
Installed Building Products, Inc. achieved record financial performance in 2024, driven by a nearly 6% consolidated sales growth and approximately 4% same-branch growth.
Capital Allocation and Shareholder Returns
The company invested $87 million in acquisitions and allocated $230 million toward dividends and share repurchases. The Board approved a 6% increase in regular and variable dividends.
Acquisitions and Growth Outlook
During 2024, IBP acquired nine businesses with a combined annual revenue of over $100 million. The outlook for 2025 includes acquiring at least $100 million in annual revenue.
Strong Liquidity and Financial Position
The company generated $340 million in cash flow from operations and refinanced a $500 million Term Loan B facility, which will save over $1 million in annual cash interest expense.
Expansion of Share Repurchase Program
The Board authorized a new stock buyback program, expanding repurchase capacity to $500 million, up from $300 million.
Lowlights
Decreased Gross Margin
The adjusted gross margin for the fourth quarter decreased to 33.6% from 34.1% due to higher sales growth in the lower gross margin Other segment.
Soft Market Environment
The current market environment is described as benign with low inflation, affecting the ability to implement price increases.
Impact of Supply Chain and Weather
Weather-related disruptions, including $20 million in lost revenue due to fires and storms, impacted the first quarter, with potential for further impacts in early 2025.
Pressure on EBITDA Margins
Potential for EBITDA margin pressure due to SG&A costs and a soft market environment, with a focus on expense management.
Company Guidance
During the fiscal 2024 fourth quarter earnings call, Installed Building Products, Inc. provided several key metrics and guidance details for 2025. The company reported a 4% increase in consolidated net revenue for the quarter, reaching a record $750 million, driven by a mix of organic growth and acquisitions. The same-brand sales growth was up 1%, with a 1.2% increase in price mix offsetting a slight decrease in job volumes. The adjusted gross margin stood at 33.6%, while adjusted EBITDA hit a record $132 million, reflecting a margin of 17.6%. For 2025, the board approved a 6% increase in both the regular quarterly cash dividend to $0.37 per share and the annual variable dividend to $1.70 per share. The company expects to continue its M&A strategy with a strong pipeline, aiming for at least $100 million in acquired annual revenue. Additionally, they anticipate a 25% to 27% effective tax rate for the full year 2025 and a first-quarter amortization expense of approximately $10 million.Installed Building Products Corporate Events
Dividends
Installed Building Products Announces Quarterly and Annual Dividends
Positive
Feb 27, 2025
On February 27, 2025, Installed Building Products announced that its Board of Directors approved a quarterly cash dividend of $0.37 per share and an annual variable cash dividend of $1.70, both payable on March 31, 2025, to stockholders of record as of March 14, 2025. Additionally, the company plans to engage with prospective investors during the first quarter of 2025, with related materials available on its website, potentially impacting investor relations and market perception.
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.