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TopBuild (BLD) to Report Q4 Earnings: What's in the Cards?

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TopBuild Corp. (BLD - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 23, before market open.

In the last reported quarter, the company’s adjusted earnings beat the Zacks Consensus Estimate by 20% but net sales missed the consensus mark by 0.9%. However, on a year-over-year basis, adjusted earnings and net sales improved 37.3% and 2.2%, respectively. The company has been benefitting from robust U.S. housing market and repair & remodeling activities.

Trend in Estimate Revision

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has moved up to $1.90 per share from $1.81 over the past 30 days. The said figure indicates a 28.4% increase from the year-ago earnings of $1.48 per share. Also, the consensus mark for revenues is pegged at $702.9 million, suggesting a 6.1% year-over-year increase.

TopBuild Corp. Price and EPS Surprise


TopBuild Corp. Price and EPS Surprise

TopBuild Corp. price-eps-surprise | TopBuild Corp. Quote

Factors to Note

TopBuild is expected to have registered improved sales and a strong order backlog during the fourth quarter. As the company’s performance is associated with the housing market, solid momentum in the markets served is expected to have driven the company’s quarterly results. Solid demand for new housing and more residential remodeling activities across the United States are also likely to have helped.

Also, the company expects an improved seasonality during the November-December period in comparison to normal fourth quarters (which is usually seasonally slower for the industry). Also, acquisitions and higher selling prices bode well. The company’s margin is expected to have improved on operational efficiencies, savings from cost-reduction initiatives, material deflation and lower insurance costs.

Segment-wise, solid momentum in the residential market is expected to have benefited TopBuild's Distribution (Service Partners) business during the quarter. Stronger volume, productivity and lower raw material costs are expected to have been partially offset by a slightly unfavorable selling price for the to-be-reported quarter. The consensus estimate for Distribution segment’s net sales is pegged at $231 million, indicating a rise of 3.5% from the quarter-ago figure.

Notably, Installation segment sales (contributing more than 70% to total revenues) are also likely to have increased during the fourth quarter on strong housing market fundamentals.

The consensus mark for net sales from the Installation segment (TruTeam) is pegged at $510 million, suggesting a rise of 7.2% year over year.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for TopBuild this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: TopBuild has an Earnings ESP of +6.66%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks With Favorable Combination

Here are some other stocks from the Zacks Construction space that investors may also consider, as our model shows that these too have the right combination of elements to deliver an earnings beat this time around.

Primoris Services Corporation (PRIM - Free Report) has an Earnings ESP of +4.55% and a Zacks Rank #2, at present.

Trex Company, Inc. (TREX - Free Report) has an Earnings ESP of +1.57% and a Zacks Rank #3.

Masonite International Corporation (DOOR - Free Report) has an Earnings ESP of +1.39% and a Zacks Rank #2.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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