The Zacks Building Products - Miscellaneous industry continues to face pressure from tariffs, elevated input and labor costs, and lingering inflation. Supply-chain disruptions, high energy expenses, and cautious developer sentiment have slowed commercial activity, while housing affordability remains a challenge. Mortgage rates are still above 6% despite recent Fed rate cuts, keeping demand muted as homeowners cling to low-rate mortgages and new construction absorbs higher costs. These factors are weighing on margins and limiting near-term relief for builders and consumers.

Still, long-term prospects remain constructive. Federal investment in infrastructure—spanning roads, bridges, broadband, and climate-resilient projects—combined with global supply-chain reinvestment and energy transition efforts, offers a strong backdrop for growth. Companies are also driving efficiency through cost-saving initiatives, digital solutions, and acquisitions. Against this backdrop, Installed Building Products, Inc. (IBP Quick QuoteIBP - Free Report) , Argan, Inc. (AGX Quick QuoteAGX - Free Report) , Frontdoor, Inc. (FTDR Quick QuoteFTDR - Free Report) and Gibraltar Industries, Inc. (ROCK Quick QuoteROCK - Free Report) are well-positioned to capitalize on these positive trends.

Industry Description

The Zacks Building Products - Miscellaneous industry primarily comprises manufacturers, designers and distributors of home improvement and building products like ceiling systems, doors, windows, flooring and metal products. Some industry players provide solutions to rehabilitate the aging infrastructure, primarily pipelines in the wastewater, water, energy, mining and refining industries. The companies also manufacture expansion joints and structural bearings, ventilation products, ground-mounted solar racking and commercial greenhouses, as well as mail storage (solutions including mailboxes along with package delivery products). Companies in this industrial cohort also rent out equipment to a diverse customer base, including construction and industrial companies, manufacturers, utilities, municipalities, homeowners and government entities.

3 Trends Shaping the Future of the Building Products Industry

Tariff Impact: The U.S. administration’s tariff policies are reshaping the U.S. building products industry by increasing costs, disrupting supply chains and influencing consumer behavior. While these policies aim to bolster domestic manufacturing, the immediate effects include heightened inflation and challenges for builders and consumers alike. Persistent uncertainty around tariffs, inflation, labor availability and interest rates is expected to slow commercial construction activity, particularly in more discretionary renovation projects. While ground-level bidding activity has remained relatively stable, first-time bidding for new projects has softened, reflecting hesitation among developers amid economic volatility. Input cost inflation, especially in energy and raw materials, remains a headwind. 

Rising Costs & Soft Residential Market: Inflationary headwinds with respect to transportation costs, material costs and energy costs have been a pressing concern. Also, rising labor costs are compressing margins. These are dampening the companies’ operating performance. Although the industry participants have been working to recover higher costs through various price increases, they expect this ongoing volatility in material and transportation costs to be a concern. Apart from higher raw material costs, the companies bear expenses related to product launches. If companies are unable to offset these costs through price increases or supply-chain initiatives, their profits may be affected.

The industry's outlook is closely tied to the U.S. housing and renovation markets. The residential real estate market has been facing several challenges, including elevated rates, which make it difficult for buyers to secure affordable mortgages. Despite the Fed’s recent rate cut, the U.S. housing market remains strained by affordability and supply challenges. Mortgage rates have not fallen in step with the policy move, staying above 6%, which limits relief for buyers. Meanwhile, supply remains constrained as many homeowners are unwilling to give up their low-rate mortgages, while elevated construction costs hinder new builds. This shortage sustains competition and keeps prices high. Coupled with stricter lending standards, persistent inflation, and broader economic uncertainty, the recent rate cut provides little relief, leaving the deeper structural challenges to housing demand and affordability unresolved.

Infrastructural Push & Operational Excellence, Product Innovation & Acquisitions: The industry players are expected to benefit from strong global trends in infrastructure modernization, energy transition, national security and a potential super-cycle in global supply-chain investments. The U.S. administration’s endeavor to rebuild the nation’s deteriorating roads and bridges and fund new climate-resilient and broadband initiatives is expected to aid the companies.

Meanwhile, the industry participants have been undertaking strong cost-saving initiatives like business consolidation, system implementations, plant/branch closures, improvement in the global supply chain and headcount reductions to boost profitability. Industry participants have also been strategically investing in new products, sales and support services, digitally enabled solutions and advanced manufacturing capabilities to boost revenues. The companies are also following a systematic acquisition strategy to supplement organic growth and expand access to additional markets and products.

Zacks Industry Rank Indicates Dull Prospects

The Zacks Building Products – Miscellaneous industry is a 33-stock group within the broader Zacks Construction sector. The industry currently carries a Zacks Industry Rank #159, which places it in the bottom 35% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bleak near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of a lower earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential. Since November 2025, the industry’s earnings estimates for 2026 have decreased to $4.50 per share from $4.67.

Despite the industry’s blurred near-term view, we will present a few stocks that one may consider adding to their portfolio. Before that, it’s worth taking a look at the industry’s shareholder returns and current valuation.

Industry Lags S&P 500 & Sector

The Zacks Building Products – Miscellaneous industry has underperformed the Zacks S&P 500 Composite and the broader Zacks Construction sector over the past year.

Over this period, the industry has gained 4.7%, below the broader sector’s 7.8% increase. Meanwhile, the Zacks S&P 500 Composite has gained 22.1% over the same period.

One-Year Price Performance

Industry's Current Valuation

On the basis of the forward 12-month price to earnings, which is a commonly used multiple for valuing building products’ stocks, the industry is trading at 19.92X versus the S&P 500’s 23.51X and the sector’s 20.67X.

Over the past five years, the industry has traded as high as 19.92X, as low as 10.61X and at a median of 16.04X, as the chart below shows.

Industry’s P/E Ratio (Forward 12-Month) Versus S&P 500

Industry’s P/E Ratio (Forward 12-Month) Versus Sector

4 Building Product Stocks to Buy Now

We have selected four stocks from the Zacks universe of building products that have solid growth prospects.

Argan: Based in Arlington, VA, Argan provides EPC and related services for power and renewable energy projects, along with industrial construction and telecom infrastructure services. The company has been benefiting from strong long-term demand for reliable power generation and grid infrastructure. The company is well-positioned to benefit from the replacement of aging natural gas facilities, rising electricity consumption driven by data centers, AI workloads and broader electrification trends, and continued investment in grid reliability. Its ability to execute large, complex combined-cycle gas projects gives Argan a competitive advantage in a market with limited qualified contractors. A diversified project mix across natural gas, renewables, industrial construction and telecom infrastructure further supports stability. With a disciplined project selection approach, strong customer relationships and a solid balance sheet, Argan appears well placed for sustained growth and profitability over the coming years.

Argan, a Zacks Rank #1 (Strong Buy) stock, has gained 79% over the past year. AGX has seen an upward estimate revision for fiscal 2026 and 2027 earnings to $8.26 per share from $7.75 and $10.18 per share from $9.40 over the past 60 days, respectively, depicting analysts’ optimism for the company’s prospects. The estimated figure indicates 34.3% and 23.2% year-over-year growth for fiscal 2026 and 2027, respectively. The company’s earnings surpassed the Zacks Consensus Estimate in the trailing two quarters, the average being 22.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Price and Consensus: AGX

Installed Building Products or IBP: Based in Columbus, OH, IBP is a leading U.S. installer of residential insulation and a broad range of complementary building products for residential and commercial builders nationwide. The company is well-positioned for steady long-term growth, supported by its national scale, diversified end-market exposure and disciplined capital strategy. The company benefits from a fragmented residential insulation market that continues to offer consolidation opportunities, while its growing presence in heavy commercial projects and complementary building products adds resilience across cycles. Management remains focused on operational efficiency, margin discipline and local decision-making through its branch network, which has helped IBP consistently outperform underlying market trends. Long-term fundamentals such as structural undersupply in U.S. housing, stricter energy-efficiency building codes and increasing demand for multifamily construction further support demand for IBP’s services. Strong balance-sheet flexibility and a shareholder-friendly capital allocation approach also enhance its ability to navigate near-term housing volatility while investing for durable growth.

IBP, a Zacks Rank #1 stock, has gained 60.3% over the past year. IBP has seen an upward estimate revision for 2026 earnings to $11.04 from $10.93 per share over the past 60 days. The estimated figure indicates 0.1% year-over-year growth for 2026, on 1.1% revenue growth. The company’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed on the other two, the average being 8.4%.

Price and Consensus: IBP

Frontdoor: Based in Memphis, TN, Frontdoor offers home and new home structural warranties across the United States. Frontdoor is positioned for steady long-term growth, supported by a scalable home services platform and a diversified revenue mix. The company continues to benefit from strong direct-to-consumer member acquisition, high retention driven by improved service experience, and disciplined pricing and cost controls. Its expanding non-warranty offerings, particularly in large replacement categories such as HVAC and appliances, create meaningful incremental growth opportunities with minimal customer acquisition costs. Operational efficiencies, technology adoption and AI-enabled tools are enhancing contractor management and customer engagement, strengthening margins and loyalty. In addition, a gradual normalization in the housing market and improving real estate channel dynamics could support incremental demand over time. Overall, Frontdoor’s strategy and execution underpin solid visibility into sustainable cash generation and growth.

Frontdoor, a Zacks Rank #2 (Buy) stock, has gained 6.6% over the past year. FTDR’s earnings estimates have increased for 2026 earnings to $4.05 per share from $3.99 over the past 60 days. The estimated figure indicates 1.7% year-over-year growth for 2026. The company’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 59.4%. It currently holds a VGM Score of B.

Price and Consensus: FTDR

Gibraltar: Headquartered in Buffalo, NY, Gibraltar manufactures and distributes products to the industrial and building markets. Gibraltar has a constructive long-term outlook, supported by portfolio reshaping and disciplined capital allocation. The company is sharpening its focus on residential building products and structures, while progressing toward the divestiture of its renewables business, which should simplify operations and improve return consistency. Growth prospects are underpinned by expanding participation in residential roofing accessories, continued integration of metal roofing acquisitions, and a growing Agtech platform with a broader customer base and rising backlog visibility. Investments in systems integration, localized manufacturing and supply-chain efficiency are expected to enhance scalability and margins over time. A strong balance sheet, solid cash generation and an active M&A pipeline provide flexibility to pursue targeted growth opportunities while supporting shareholder returns.

Gibraltar, a Zacks Rank #2 stock, has lost 9.6% over the past year. Nonetheless, ROCK’s earnings estimates have increased for 2026 earnings to $4.66 per share from $4.59 over the past 60 days. The estimated figure indicates 11% year-over-year growth for 2026. The company’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed on the other two, the average surprise being 2.2%. It currently holds a VGM Score of A.

Price and Consensus: ROCK