TopBuild Corp. (NYSE:BLD) Just Reported And Analysts Have Been Lifting Their Price Targets

It's been a pretty great week for TopBuild Corp. (NYSE:BLD) shareholders, with its shares surging 12% to US$413 in the week since its latest quarterly results. The result was positive overall - although revenues of US$1.3b were in line with what the analysts predicted, TopBuild surprised by delivering a statutory profit of US$5.32 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on TopBuild after the latest results.

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Following last week's earnings report, TopBuild's twelve analysts are forecasting 2025 revenues to be US$5.23b, approximately in line with the last 12 months. Statutory earnings per share are expected to reduce 8.4% to US$19.46 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.20b and earnings per share (EPS) of US$19.44 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

See our latest analysis for TopBuild

The consensus price target rose 10% to US$435despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of TopBuild's earnings by assigning a price premium. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on TopBuild, with the most bullish analyst valuing it at US$466 and the most bearish at US$320 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that TopBuild's revenue growth is expected to slow, with the forecast 0.7% annualised growth rate until the end of 2025 being well below the historical 15% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.4% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than TopBuild.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that TopBuild's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple TopBuild analysts - going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with TopBuild , and understanding these should be part of your investment process.

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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.