TopBuild’s first quarter saw sales decline as new residential construction remained soft, reflecting a challenging demand environment and continued caution among homebuyers. Management cited a slower-than-expected spring selling season, elevated interest rates, and economic uncertainty as key factors weighing on housing demand. CEO Robert Buck explained, “New residential construction demand remains soft with choppiness continuing across various geographies.” On the other hand, commercial and industrial activity provided a partial offset, particularly with momentum in data center construction and certain manufacturing subsectors. The market responded negatively to the results, given the persistent headwinds in the core residential segment and margin pressures compared to last year.
Is now the time to buy BLD? Find out in our full research report (it’s free).
TopBuild (BLD) Q1 CY2025 Highlights:
- Revenue: $1.23 billion vs analyst estimates of $1.23 billion (3.6% year-on-year decline, in line)
- Adjusted EPS: $4.63 vs analyst estimates of $4.40 (5.3% beat)
- Adjusted EBITDA: $234.8 million vs analyst estimates of $227.7 million (19% margin, 3.1% beat)
- The company reconfirmed its revenue guidance for the full year of $5.2 billion at the midpoint
- EBITDA guidance for the full year is $1 billion at the midpoint, below analyst estimates of $1.01 billion
- Operating Margin: 14.4%, down from 16.8% in the same quarter last year
- Organic Revenue fell 5.7% year on year (-0.3% in the same quarter last year)
- Market Capitalization: $9.2 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions TopBuild’s Q1 Earnings Call
- Aatish Shah (Evercore ISI) asked if recent C&I project restarts reflected improved financing, to which CEO Robert Buck replied that market players have largely adapted to current conditions and field teams are executing on vertical market strategies to gain share.
- Stephen Kim (Evercore ISI) questioned whether TopBuild’s scale can offset slowing manufacturer price increases. Buck said no new industry pricing is expected in 2025 but noted TopBuild’s advantage in leveraging its size for competitive pricing.
- Michael Rehaut (JPMorgan) probed the impact and magnitude of facility consolidations. CFO Rob Kuhns detailed expected annual savings of about $30 million, with these benefits already included in current guidance.
- Adam Baumgarten (Zelman & Associates) asked if pricing contributions would moderate through the year. Kuhns confirmed that pricing impacts, especially from last year’s increases, will diminish as 2025 progresses, particularly in the Installation segment.
- Susan Maklari (Goldman Sachs) inquired about further labor adjustments and M&A prospects. Kuhns said major headcount reductions are likely complete, with future changes limited to market-by-market tweaks, and Buck described the M&A pipeline as healthy across all business lines.
Catalysts in Upcoming Quarters
In upcoming quarters, StockStory analysts will watch (1) the pace of recovery or further decline in residential construction volumes, (2) the realization of anticipated cost savings from facility consolidation and workforce adjustments, and (3) continued C&I project momentum, particularly in data centers and healthcare. The impact of new M&A activity, as well as any shifts in pricing or input costs, will also be critical for assessing TopBuild’s ability to sustain margins.
TopBuild currently trades at $323.74, up from $291.87 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
