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what it is
TopBuild installs insulation and roofing, then sells those materials through 440 U.S. branches.
how it gets paid
Last year Topbuild made $5.4B in revenue.
why it's growing
Revenue grew 1.5% last year. Revenue held up better than earnings. The quarter was driven by acquisitions.
what just happened
TopBuild posted Q4 EPS of $4.50, just below the $4.55 estimate, while sales still rose 13.2%.
At a glance
B+ balance sheet — decent shape, but not bulletproof
80/100 earnings predictability — you can trust these numbers
22.2x trailing p/e — priced about right
12.5% return on capital — nothing to write home about
xvary composite: 66/100 — average
What they do
TopBuild installs insulation and roofing, then sells those materials through 440 U.S. branches.
TopBuild wins because it does two jobs at once. It installs product through TruTeam, which was about ~59% of revenue on the $3.2B / $5.4B split in the product cards, and it distributes product through a 440-branch network. Vertical integration → it sells and installs the same stuff → so what: you get scale on both labor and materials while smaller rivals usually have one or the other.
How they make money
$5.4B
annual revenue · their business grew +1.5% last year
total revenue
$5.4B
+1.5%
The products that matter
installs insulation and roofing
Installation Services
$3.2B shown here · +13.2% vs. prior year (Q4) in the headline
this is the part doing the heavy lifting. Company-wide annual revenue grew only ~+1.5% in the table above—do not confuse that with the quarterly install-line pop. a 21.0% adjusted EBITDA margin means the install crews are still turning demand into real profit, not just revenue.
21.0% margin
distributes insulation and materials
Specialty Distribution
$2.2B shown here · flat growth
the $1B SPI acquisition added about $1.2B in annual revenue. it also squeezed margins and left this segment flat in the snapshot shown here. more scale, less room for error.
SPI integration
Key numbers
22.2x
trailing p/e
You are paying 22.2 times trailing earnings for a company with 2026 EPS estimated at $19.50 versus $19.77 in 2025. That is rich for a pause year.
15.0%
operating margin
Operating margin → profit after running the business, before interest and taxes → so what: 15.0% is strong for a contractor-distributor mix.
$2.8B
long-term debt
Debt is $2.8B, or 18% of capital. That is manageable, but a slow housing market gives you less room for a bad acquisition or a weak year.
12.5%
return on capital
Return on capital → profit earned on the money tied up in the business → so what: 12.5% says TopBuild still turns investment into real earnings.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 40 / 100
- long-term debt $2.8B (18% of capital)
- net profit margin 10.0% — keeps 10 cents of every dollar in revenue
- return on equity 26% — $0.26 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in BLD 3 years ago → it's now worth $21,280.
The index would have given you $14,540.
source: institutional data · total return
What just happened
missed estimates
TopBuild posted Q4 EPS of $4.50, just below the $4.55 estimate, while sales still rose 13.2%.
Revenue held up better than earnings. The quarter was driven by acquisitions, while margin pressure and weaker end-market demand kept profit from fully following sales.
$1.49B
rev (Q4)
$4.50
eps (Q4)
29.7%
gross margin (Q4)
the number that mattered
The key number was 2026 EPS guidance of $19.50, down from $19.77 in 2025, because it says the rebound story got pushed out another year.
-
after a decade of rapid growth, earnings declined in the second half of 2025.softness in the residential and light commercial markets persists, driven by weak consumer confidence and housing affordability issues.
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however, we believe there is room for optimism as the year progresses.
-
home mortgage rates recently fell below 6% for the first time in three years, and this should improve buyer psychology as well as boost affordability.as demand picks up, management's efforts to optimize the company's cost structure should help margins.
-
we estimate a slight decline in earnings this year, to $19.50 per share, before a solid rebound in 2027, to $22.50 a share. Acquisitions remain a key strategy at topbuild.in 2025, the company completed seven acquisitions that will add about $800 million in sales this year. it spent $1.9 billion in cash on these deals, which included suppliers of roofing products, door products, and insulation fabrics. management has been active already in 2026 as well, completing two purchases in february and announcing a third. the goal of these deals is to expand product line breadth, broaden geographical reach, and bolster margins. we expect the company to remain active in pursuing accretive additions for the foreseeable future. The company's diversification is a key strength. over the years, management has broadened the business base to the point that installation and specialty distribution are comparable in size, as is the exposure to residential and commercial markets. this balance provides stability during times of weakness in any one area. These shares are ranked to outpace the market averages in the coming six to 12 months. they have maintained their above average outlook rank (2) since our last report three months ago. we note, however, the stock can be volatile as demonstrated by its 1.25 beta and below par price stability score of 40. over the longer term, we think this issue will be about an average holding as the valuation has increased of late, and the lack of a dividend hurts total return potential.
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stuart j.
source: company earnings report, 2026
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What could go wrong
the #1 risk is U.S. housing starts staying weak while TopBuild still gets about ~59% of revenue from installation on the $3.2B / $5.4B split—distribution is the rest.
high
residential construction downturn
About ~59% of revenue here is the installation line that tracks residential construction most directly. When housing starts weaken, insulation volumes usually follow with them.
A 10% drop in housing starts could cut annual revenue by about $300M.
med
SPI integration pressure
The $1B SPI acquisition added about $1.2B in annual revenue, but it also weighed on Specialty Distribution margins. More scale only helps if margin recovery shows up next.
Management already flagged a $55M price-cost headwind tied to integration and market conditions.
med
pricing pressure in distribution
Specialty Distribution was flat on $2.2B of revenue shown here, and management cited mix and competitive pricing pressure. That is the wrong place to see softness when the market is already slow.
If pricing stays tight, gross margin has less room to defend the current ~28% level.
med
expectations are still high
The stock trades 11% above the average analyst target of $390 even after guidance came in below consensus. That leaves less room for a merely okay year.
When valuation gets ahead of estimates, even small forecast cuts can hit harder than the underlying business change.
About ~59% of revenue ties to the installation-led mix on this page, the SPI deal carries a $55M price-cost drag, and the stock sits 11% above the average target. Put together, that means execution has to stay strong just to hold the current narrative.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings date
Q1 2026 earnings report
Expected May 5–8, 2026. Consensus EPS is $3.68. You want to hear whether demand held up without another acquisition doing the explaining.
guidance
2026 revenue versus the $6.08B midpoint
Management guided to $5.93B–$6.23B. The midpoint sits below the $6.16B consensus, so every update now carries more weight.
segment trend
whether distribution stays flat
Installation grew 13.2%. Distribution was flat. If that gap stays wide, the mix story weakens and the headline growth number starts looking thinner.
integration risk
SPI margin recovery
The SPI deal added about $1.2B in annual revenue after a $1B purchase price. What matters now is whether the margin drag fades or sticks.
Analyst rankings
short-term outlook
top 20%
momentum score 2. in human-speak, analysts still expect BLD to beat most stocks over the next year.
risk profile
average
stability score 3. you are not buying a bunker stock, but you are not buying chaos either.
chart momentum
top 5%
technical score 1 — the highest rating. the tape still looks stronger than the guide did.
earnings predictability
80 / 100
management usually lands near expectations. in a cyclical business, that matters more than people admit.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 185 buyers vs. 208 sellers in 4q2025. total institutional holdings: 30.7M shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$210
$569
$439
current price
$390
target midpoint · 11% from current · 3-5yr high: $730 (+65% · 14% ann'l return)
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