Topbuild's Q1 Earnings Beat Estimates, Garnering Strong Buy Rating

Benchmark's Reuben Garner raised their price target on Topbuild (NYSE: BLD) by 4.4% from $450 to $470 on 2024/05/08. The analyst maintained their Strong Buy rating on the stock.

Topbuild, a distributor and installer of insulation and building material products in the U.S., recently reported its first-quarter 2024 earnings on May 7th. The company's "solid" results, along with the raised profit and revenue guidance for fiscal year 2024, contributed to Garner's decision to raise the price target. Garner stated, "The 'solid' results and management raised profit and revenue guidance for FY 204 account for their price target move."

In the first quarter of 2024, Topbuild delivered impressive financial performance. The company reported earnings per share (EPS) of $4.81, surpassing the Zacks Consensus Estimate of $4.56 and Q1 2023's earnings of $4.36 by 10.3%. The revenue for the quarter stood at $1.28 billion, slightly missing the Zacks Consensus Estimate of $1.31 billion but still outperforming the previous year's Q1 revenue of $1.27 billion by 1.1%. Additionally, Topbuild achieved a year-over-year increase in adjusted EBITDA of 6.5%, reaching $253.8 million. The adjusted EBITDA margin also improved by 100 basis points to 19.8%.

Looking ahead to fiscal year 2024, Topbuild's management provided revised guidance. They now anticipate revenue in the range of $5.4 billion to $5.6 billion, up from the previous guidance of $5.36 billion to $5.56 billion. This represents growth compared to the $5.19 billion revenue generated in fiscal year 2023. The adjusted EBITDA guidance was also raised to a range of $1.06 billion to $1.155 billion, compared to the previous guidance of $1.04 billion to $1.13 billion.

President and CEO Robert Buck expressed pride in the company's Q1 results, highlighting the strength of their business and commitment to continuous improvement. Buck stated, "We continue to focus on growing the business – both organically and through M&A – and delivering operational improvements, as evidenced by the 100 bps expansion in our Q1 adjusted EBITDA margin year-over-year."

Analyst ratings for Topbuild indicate a positive outlook. Currently, 83.3% of top-rated analysts rate the stock as a Strong Buy or Buy, while 16.7% consider it a Hold. Notably, none of the analysts recommend or strongly recommend selling the stock.

The consensus forecast among analysts is that Topbuild's upcoming year will deliver earnings per share (EPS) of $17.51. If the analysts' predictions hold true, the company's next yearly EPS will experience a decrease of 12.2% compared to the previous year.

In terms of stock performance, Topbuild's price has remained unchanged since the release of its latest quarterly report on May 7th. However, the stock has shown significant growth on a year-over-year basis, with an increase of 85.1%. During this period, Topbuild has outperformed the S&P 500, which has seen a growth of 25.4%.

Reuben Garner, the analyst responsible for the recent price target increase, is ranked by WallStreetZen in the top 3% out of 4,577 Wall Street analysts. Garner specializes in the Consumer Cyclical and Technology sectors, among others, and has an average return of 26.1% with a 69.7% win rate.

Topbuild Corp., headquartered in Daytona Beach, FL, operates as a distributor and installer of insulation and building material products. The company's offerings include building and mechanical insulation, insulation accessories, rain gutters, fireplaces, closet shelving, and roofing materials. Topbuild serves the residential, commercial, and industrial construction markets. The company was incorporated in 2015.

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