TopBuild Q4 EPS misses as acquisitions dent margins

Overview

• Insulation installer reported Q4 sales of $1.49 bln, meeting analyst expectations

• Adjusted EPS for Q4 missed analyst expectations

• Company completed SPI acquisition, boosting Q4 sales growth

Outlook

• TopBuild expects 2026 sales between $5.925 bln and $6.225 bln

• Company anticipates 2026 adjusted EBITDA of $1.005 bln to $1.155 bln

• TopBuild sees mid-single digit decline in residential sales for 2026

Result Drivers

• ACQUISITIONS DRIVE GROWTH - TopBuild's Q4 sales growth of 13.2% was largely driven by acquisitions, including SPI and Progressive Roofing, which offset weakness in residential and light commercial construction

• MARGINS IMPACTED - Specialty Distribution margins declined due to the SPI acquisition, but the company plans to drive operating improvements and synergies over the next two years

• COMMERCIAL ROOFING GROWTH - TopBuild sees significant growth potential in commercial roofing, with the SPI acquisition strengthening its leadership in mechanical insulation

Company press release: ID:nGNX81cFQF

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 12 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the construction & engineering peer group is "buy"

• Wall Street's median 12-month price target for TopBuild Corp is $510.00, about 5.1% below its February 25 closing price of $485.32

• The stock recently traded at 23 times the next 12-month earnings vs. a P/E of 20 three months ago

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