Installed Building Products (IBP): Valuation Check After Zacks Upgrade and Record Q3 Earnings Performance
Installed Building Products (IBP) just checked several key boxes for investors, with a Zacks Rank upgrade to Strong Buy arriving alongside record Q3 revenue, higher net income, and momentum from its heavy commercial business and acquisitions.
See our latest analysis for Installed Building Products.
The Zacks Rank upgrade and record Q3 results come after a powerful year to date, with a roughly 55 percent year to date share price return and a three year total shareholder return above 220 percent, signaling that momentum is still firmly intact despite a modest pullback this quarter.
If IBP’s run has you thinking about what else could be compounding quietly in the background, now is a good moment to discover fast growing stocks with high insider ownership.
With shares near record highs and trading above some analyst targets, investors now face a critical question: Is IBP still flying under the radar on future earnings power, or has the market already priced in its next leg of growth?
Most Popular Narrative Narrative: 8% Overvalued
The most widely followed narrative now points to a fair value of roughly $248 per share, notably below IBP’s last close near $268.
Despite the company's historic outperformance in core residential markets, underlying U.S. single-family housing starts have declined 7% year to date and management anticipates "a larger than previously expected decline" due to high interest rates and affordability challenges, which are likely to suppress top-line growth and eventually flow through to net earnings.
Want to see why modest revenue slippage, tighter margins, and a surprisingly rich future earnings multiple still add up to this fair value call? The full narrative lays out the exact growth path, profitability assumptions, and share count moves that have to line up almost perfectly for today’s price to make sense.
Result: Fair Value of $248.23 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, resilient multifamily and commercial demand, along with ongoing operational improvements, could support stronger revenue growth and margins than this cautious valuation implies.
Find out about the key risks to this Installed Building Products narrative.
Build Your Own Installed Building Products Narrative
If you are not fully aligned with this view or simply prefer to dig into the numbers yourself, you can build a custom narrative in just a few minutes, Do it your way.
A great starting point for your Installed Building Products research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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