Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at TopBuild (NYSE: BLD) and the best and worst performers in the home builders industry.
Traditionally, homebuilders have built competitive advantages with economies of scale that lead to advantaged purchasing and brand recognition among consumers. Aesthetic trends have always been important in the space, but more recently, energy efficiency and conservation are driving innovation. However, these companies are still at the whim of the macro, specifically interest rates that heavily impact new and existing home sales. In fact, homebuilders are one of the most cyclical subsectors within industrials.
The 10 home builders stocks we track reported a slower Q1. As a group, revenues were in line with analysts’ consensus estimates.
While some home builders stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.5% since the latest earnings results.
TopBuild (NYSE: BLD)
Established in 2015 following a spinoff from Masco Corporation, TopBuild (NYSE: BLD) is a distributor and installer of insulation and other building products.
TopBuild reported revenues of $1.23 billion, down 3.6% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ adjusted operating income estimates.
“Our first quarter results were in line with our expectations,” said Robert Buck, President and CEO of TopBuild.
Interestingly, the stock is up 2.8% since reporting and currently trades at $300.
Is now the time to buy TopBuild? Access our full analysis of the earnings results here, it’s free.
Best Q1: Taylor Morrison Home (NYSE: TMHC)
Named “America’s Most Trusted Home Builder” in 2019, Taylor Morrison Home (NYSE: TMHC) builds single family homes and communities across the United States.
Taylor Morrison Home reported revenues of $1.90 billion, up 11.5% year on year, outperforming analysts’ expectations by 5.7%. The business had a strong quarter with a solid beat of analysts’ EBITDA estimates.
Taylor Morrison Home scored the biggest analyst estimates beat and fastest revenue growth among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $58.93.
Is now the time to buy Taylor Morrison Home? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: LGI Homes (NASDAQ: LGIH)
Based in Texas, LGI Homes (NASDAQ: LGIH) is a homebuilding company specializing in constructing affordable, entry-level single-family homes in desirable communities across the United States.
LGI Homes reported revenues of $351.4 million, down 10.1% year on year, falling short of analysts’ expectations by 5%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
The stock is flat since the results and currently trades at $59.69.
Read our full analysis of LGI Homes’s results here.
Tri Pointe Homes (NYSE: TPH)
Established in 2009 in California, Tri Pointe Homes (NYSE: TPH) is a United States homebuilder recognized for its innovative and sustainable approach to creating premium, life-enhancing homes.
Tri Pointe Homes reported revenues of $740.9 million, down 21.1% year on year. This print topped analysts’ expectations by 4%. Overall, it was a strong quarter as it also put up an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Tri Pointe Homes had the slowest revenue growth among its peers. The stock is up 1.2% since reporting and currently trades at $31.20.
Read our full, actionable report on Tri Pointe Homes here, it’s free.
Installed Building Products (NYSE: IBP)
Founded in 1977, Installed Building Products (NYSE: IBP) is a company specializing in the installation of insulation, waterproofing, and other complementary building products for residential and commercial construction.
Installed Building Products reported revenues of $684.8 million, down 1.2% year on year. This result beat analysts’ expectations by 1.5%. More broadly, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ organic revenue estimates but a significant miss of analysts’ EPS estimates.
The stock is flat since reporting and currently trades at $163.18.
Read our full, actionable report on Installed Building Products here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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