The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how TopBuild (NYSE:BLD) and the rest of the home builders stocks fared in Q2.
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 11 home builders stocks we track reported an ok Q2; on average, revenues beat analyst consensus estimates by 3%. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. 2024 has been a different story as mixed signals have led to market volatility, and while some of the home builders stocks have fared somewhat better than others, they collectively declined, with share prices falling 1.8% on average since the previous earnings results.
Weakest Q2: TopBuild (NYSE:BLD) Established in 2015 following a spinoff from Masco Corporation (NYSE:MAS), TopBuild (NYSE:BLD) is a distributor and installer of insulation and other building products.
TopBuild reported revenues of $1.37 billion, up 3.7% year on year, falling short of analysts' expectations by 2.3%. Overall, it was a weak quarter for the company with a miss of analysts' earnings and organic revenue estimates.
we delivered our highest level of sales and profitability in our history,” said Robert Buck, President and Chief Executive Officer.
The stock is down 12.7% since reporting and currently trades at $371.40.
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Best Q2: KB Home (NYSE:KBH) The first homebuilder to be listed on the NYSE, KB Home (NYSE:KB) is a homebuilding company targeting the first-time home buyer and move-up buyer markets.
KB Home reported revenues of $1.71 billion, down 3.1% year on year, outperforming analysts' expectations by 3.4%. It was a stunning quarter for the company with an impressive beat of analysts' backlog sales estimates and a solid beat of analysts' earnings estimates.
The market seems happy with the results as the stock is up 17.5% since reporting. It currently trades at $79.99.
Skyline Champion (NYSE:SKY) Founded in 1951, Skyline Champion (NYSE:SKY) is a manufacturer of modular homes and buildings in North America.
Skyline Champion reported revenues of $627.8 million, up 35.1% year on year, exceeding analysts' expectations by 4.6%. It was a stunning quarter for the company with an impressive beat of analysts' earnings and volume estimates.
Interestingly, the stock is up 10.7% since the results and currently trades at $82.37.
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 $737.6 million, up 6.6% year on year, in line with analysts' expectations. Overall, it was a weak quarter for the company with a miss of analysts' organic revenue and earnings estimates.
The stock is down 20.7% since reporting and currently trades at $214.76.
NVR (NYSE:NVR) Known for its unique land acquisition strategy, NVR (NYSE:NVR) is a respected homebuilder and mortgage company in the United States.
NVR reported revenues of $2.61 billion, up 11.7% year on year, surpassing analysts' expectations by 2.6%. Zooming out, it was an impressive quarter for the company with an impressive beat of analysts' backlog sales estimates.
The stock is down 2.4% since reporting and currently trades at $8,425.
This content was originally published on Stock Story
