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1. Company Snapshot

1.a. Company Description

TopBuild Corp., together with its subsidiaries, engages in the installation and distribution of insulation and other building products to the construction industry.The company operates in two segments, Installation and Specialty Distribution.It provides insulation products and accessories, glass and windows, rain gutters, afterpaint products, fireproofing products, garage doors, fireplaces, closet shelving, roofing materials, and other products; and insulation installation services.


The company also offers various services and tools to assist builders in applying the principles of building science to new home construction, which include pre-construction plan reviews, diagnostic testing, and various inspection services; and home energy rating services.In addition, it distributes building and mechanical insulation, insulation accessories, and other building product materials for the residential, commercial, and industrial end markets.The company serves single-family homebuilders, single-family custom builders, multi-family builders, commercial general contractors, remodelers, and individual homeowners, as well as insulation contractors, gutter contractors, weatherization contractors, other contractors, dealers, metal building erectors, and modular home builders.


It operates approximately 235 installation branches and 175 distribution centers in the United States and Canada.The company was formerly known as Masco SpinCo Corp.and changed its name to TopBuild Corp.


in March 2015.TopBuild Corp.was incorporated in 2015 and is headquartered in Daytona Beach, Florida.

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1.b. Last Insights on BLD

Breaking News: TopBuild Corp reported fourth quarter and year end 2025 results with sales totaling $1.49 billion up 13.2 percent driven by acquisitions. The company completed the SPI Acquisition and also expanded in Texas with the Johnson Roofing buy. This acquisition boosts its commercial roofing platform and regional scale. For 2026 the company provided an outlook. The Artisan Global Discovery Fund highlighted strong demand in certain sectors but did not specifically comment on TopBuild. Based on recent data a hold recommendation is given by some analysts.

1.c. Company Highlights

2. TopBuild's Q4 Earnings: A Mixed Bag

TopBuild's fourth quarter sales rose 13.2% to $1.49 billion, driven by 7 acquisitions completed last year, including SPI in the fourth quarter. The company finished 2025 with over $5.4 billion in revenue and adjusted EBITDA of $1.04 billion, or a margin of 19.2%. The actual EPS came out at 4.5, beating estimates at 4.39. The company's revenue growth was largely driven by acquisitions, with $1.9 billion deployed last year, adding approximately $1.2 billion in annual revenue.

Publication Date: Mar -02

📋 Highlights
  • Acquisition-Driven Growth:: Q4 sales rose 13.2% to $1.49B, driven by 7 acquisitions, including SPI, with $1.2B in annual revenue added via 2025 M&A spend of $1.9B.
  • 2025 Financial Performance:: Full-year revenue hit $5.4B with adjusted EBITDA of $1.04B (19.2% margin), alongside $697M free cash flow and $434M shareholder returns.
  • 2026 Revenue Outlook:: Guidance of $5.925B–$6.225B assumes mid-single-digit sales declines in residential and low-single-digit growth in commercial/industrial, with EBITDA of $1.005B–$1.155B.
  • Cost and Pricing Headwinds:: $55M price/cost headwinds embedded in 2026 guidance, with 70% variable cost structure enabling flexibility, while pricing pressure persists in residential and fiberglass/spray foam.
  • Healthy Liquidity and Debt:: Net debt leverage at 2.35x EBITDA with $1.1B liquidity, supporting M&A pipeline and integration focus on $55M synergy capture from SPI and other acquisitions.

Operating Environment

The operating environment is mixed, with weakness in residential and light commercial end markets, but solid commercial and industrial end markets. Consumer confidence is low, interest rates are elevated, and affordability is an issue, but underlying fundamentals are strong, supported by household formations and an underbuilt housing market. As the company noted, "underlying fundamentals are strong, supported by household formations and an underbuilt housing market."

Guidance and Outlook

In 2026, TopBuild expects sales of $5.925 billion to $6.225 billion and adjusted EBITDA of $1.005 billion to $1.155 billion. The midpoint of revenue guidance assumes volume and price to each be down low-single digits. Residential sales are expected to be down mid-single digits, while commercial and industrial sales are expected to grow low single digits. The company's guidance assumes no significant change in end market conditions, but it is well-positioned to capitalize on growth opportunities.

Valuation Metrics

With a P/E Ratio of 24.0 and an EV/EBITDA of 15.92, the market is pricing in a certain level of growth. The company's Net Debt / EBITDA ratio is 3.04, which is relatively high. However, the company's free cash flow yield is 5.54%, which is attractive. Analysts estimate next year's revenue growth at 4.4%, which is slightly lower than the company's guidance.

Segment Performance

The company's residential volumes are expected to decline mid-single digits, with a 15% decline on the install side, driven by a slower starts environment. However, the commercial business is expected to grow, driven by various verticals, including data centers, education, healthcare, manufacturing, and food and beverage. The mechanical side is one area with upside potential, along with commercial roofing.

3. NewsRoom

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Novo Nordisk, First Solar, And Corebridge Financial Are Among Top 10 Large Cap Losers Last Week (Feb. 23-Feb. 27): Are the Others in Your Portfolio?

Mar -01

Source: feeds.benzinga.com

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Aster Capital Management DIFC Ltd Makes New $598,000 Investment in TopBuild Corp. $BLD

Feb -27

Source: defenseworld.net

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TopBuild Corp. (BLD) Q4 2025 Earnings Call Transcript

Feb -26

Source: seekingalpha.com

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TopBuild (BLD) Reports Q4 Earnings: What Key Metrics Have to Say

Feb -26

Source: zacks.com

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TopBuild (BLD) Q4 Earnings and Revenues Beat Estimates

Feb -26

Source: zacks.com

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Artisan Global Discovery Fund Q4 2025 Winners, Laggards, Buys & Sells

Feb -26

Source: seekingalpha.com

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TopBuild Reports Fourth Quarter and Year-End 2025 Results, Provides 2026 Outlook

Feb -26

Source: globenewswire.com

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TopBuild Expands Texas Footprint With Johnson Roofing Acquisition

Feb -25

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.44%)

6. Segments

Installation

Expected Growth: 4.5%

TopBuild Corp.'s 4.5% growth driven by increasing demand for energy-efficient insulation, rising new construction and retrofitting activities, and strategic acquisitions expanding product offerings and geographic presence.

Specialty Distribution

Expected Growth: 4.8%

TopBuild Corp's Specialty Distribution segment growth of 4.8% is driven by increasing demand for insulation and specialty building products, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on digital transformation, operational efficiency, and customer relationships has contributed to its growth momentum.

Intercompany Eliminations and Other Adjustments

Expected Growth: 0.5%

TopBuild Corp's 0.5% growth in Intercompany Eliminations and Other Adjustments is driven by efficient management of internal transactions, reduced cross-charges, and effective consolidation of financial statements, resulting in minimal eliminations and adjustments. This growth also reflects the company's focus on streamlining operations and improving internal processes.

7. Detailed Products

Installation Services

TopBuild Corp. provides installation services for insulation, waterproofing, and fire-stopping solutions for residential and commercial buildings.

Insulation Products

TopBuild Corp. offers a range of insulation products, including fiberglass batts, spray foam, and rigid foam board, for thermal and acoustic insulation.

Waterproofing Solutions

TopBuild Corp. provides waterproofing solutions, including membranes, coatings, and sealants, to protect buildings from water damage and structural issues.

Fire-Stopping Solutions

TopBuild Corp. offers fire-stopping solutions, including sealants, sprays, and wraps, to prevent the spread of fire and smoke in buildings.

Specialty Building Materials

TopBuild Corp. provides specialty building materials, including roofing, siding, and drywall, for residential and commercial construction projects.

8. TopBuild Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

TopBuild Corp. faces moderate threat from substitutes, as customers have limited alternatives for its insulation and building materials.

Bargaining Power Of Customers

TopBuild Corp. has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

TopBuild Corp. relies on a few large suppliers for its raw materials, giving them some bargaining power, but the company's scale and diversification mitigate this risk.

Threat Of New Entrants

The building materials industry has high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new entrants to compete with TopBuild Corp.

Intensity Of Rivalry

The building materials industry is highly competitive, with several established players competing for market share, which increases the intensity of rivalry for TopBuild Corp.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 0.00%
Debt Cost 4.29%
Equity Weight 100.00%
Equity Cost 12.78%
WACC 12.78%
Leverage 0.00%

11. Quality Control: TopBuild Corp. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Granite Construction

A-Score: 5.4/10

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Growth: 7.9

Quality: 4.7

Yield: 1.0

Momentum: 7.0

Volatility: 8.7

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TopBuild

A-Score: 5.4/10

Value: 4.0

Growth: 8.9

Quality: 6.2

Yield: 0.0

Momentum: 7.0

Volatility: 6.0

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Yield: 0.0

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Quality: 6.0

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A-Score: 4.4/10

Value: 1.8

Growth: 9.1

Quality: 3.9

Yield: 0.0

Momentum: 7.0

Volatility: 4.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

438.95$

Current Price

438.95$

Potential

-0.00%

Expected Cash-Flows