TopBuild (BLD) Valuation: Assessing Fair Value After Recent Share Price Gains

TopBuild (BLD) shares have seen some movement recently, with the stock up 6% over the past week and 13% over the past 3 months. Investors are keeping an eye on how these trends might reflect underlying business shifts.

See our latest analysis for TopBuild.

TopBuild’s share price has been building upward momentum since the start of the year, with a year-to-date share price return of over 36% and healthy gains continuing into the most recent quarter. While recent movement suggests growing optimism around the stock, its one-year total shareholder return of 9% points to some volatility beneath the surface.

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The question for investors now is whether TopBuild’s accelerating stock price means the shares are undervalued and ripe for a breakout, or if the market has already factored in the company’s future growth prospects.

Most Popular Narrative: 6.5% Undervalued

TopBuild's widely followed narrative values the stock above its recent closing price, suggesting the market is not fully pricing in certain business shifts driving future potential.

The company's disciplined M&A strategy in a highly fragmented industry, alongside investments in operational efficiencies and supply chain optimization, is expected to unlock synergies, expand scale, and drive incremental EBITDA margin improvements, contributing to stronger future earnings growth.

Read the complete narrative.

What is powering this premium? The fairness of this valuation depends on a handful of optimistic future assumptions about growth, profit margins, and how the market views earnings. If you want to uncover the exact financial targets that shape this bullish view, explore the full narrative to see what could be moving TopBuild’s true value.

Result: Fair Value of $452.58 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks such as prolonged weakness in U.S. residential construction or challenges integrating recent acquisitions could quickly undermine this optimistic outlook.

Find out about the key risks to this TopBuild narrative.

Another View: The Price-to-Earnings Ratio Says Expensive

Taking a different approach, TopBuild’s current price-to-earnings ratio of 19.9x stands well above both the industry average of 10.2x and the peer group at 12.3x. In comparison to the fair ratio of 15.8x, the shares appear pricey, suggesting investors may be factoring in a premium for future growth. However, what happens if the market’s optimism fades or shifts?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own TopBuild Narrative

If you have a different perspective or want to dig deeper into the numbers yourself, you can build your own view of TopBuild in just a few minutes. Do it your way.

A great starting point for your TopBuild research is our analysis highlighting 1 key reward 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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