Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at TopBuild (NYSE: BLD) and its peers.
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 12 home builders stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 4.1%.
Luckily, home builders stocks have performed well with share prices up 15.3% on average since the latest earnings results.
TopBuild (NYSE: BLD)
Established in 2015 following a spinoff from Masco Corporation, TopBuild (NYSE: BLD) is a distributor and installer of insulation and other building products.
TopBuild reported revenues of $1.30 billion, down 5% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with full-year EBITDA guidance beating analysts’ expectations.
Robert Buck, President and CEO of TopBuild, commented, “We have accomplished a great deal in 2025 to date, most recently closing the acquisition of Progressive Roofing and establishing a new platform for growth in the large and highly complementary roofing services sector. Additionally, our teams’ efforts early in the year to align our cost structure with the current demand landscape and drive operational improvements are reflected in our healthy second quarter adjusted EBITDA margin of 20.1%. Second quarter sales of $1.3 billion declined 5.0%, driven by an 8.3% decrease in Installation, which was partly offset by 1.1% growth in Specialty Distribution.
TopBuild delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 12.2% since reporting and currently trades at $434.22.
Is now the time to buy TopBuild? Access our full analysis of the earnings results here, it’s free.
Best Q2: Champion Homes (NYSE: SKY)
Founded in 1951, Champion Homes (NYSE: SKY) is a manufacturer of modular homes and buildings in North America.
Champion Homes reported revenues of $701.3 million, up 11.7% year on year, outperforming analysts’ expectations by 9.2%. The business had an incredible quarter with an impressive beat of analysts’ sales volume estimates and a beat of analysts’ EPS estimates.
Champion Homes pulled off the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 15% since reporting. It currently trades at $76.09.
Is now the time to buy Champion Homes? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Lennar (NYSE: LEN)
One of the largest homebuilders in America, Lennar (NYSE: LEN) is known for constructing affordable, move-up, and retirement homes across a range of markets and communities.
Lennar reported revenues of $8.38 billion, down 4.4% year on year, exceeding analysts’ expectations by 1.1%. Still, it was a softer quarter as it posted a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.
Interestingly, the stock is up 24.5% since the results and currently trades at $136.26.
Read our full analysis of Lennar’s results here.
Meritage Homes (NYSE: MTH)
Originally founded in 1985 in Arizona as Monterey Homes, Meritage Homes (NYSE: MTH) is a homebuilder specializing in designing and constructing energy-efficient and single-family homes in the US.
Meritage Homes reported revenues of $1.63 billion, down 4% year on year. This print surpassed analysts’ expectations by 3%. Aside from that, it was a mixed quarter as it also logged a decent beat of analysts’ adjusted operating income estimates but a significant miss of analysts’ backlog estimates.
The stock is up 8.6% since reporting and currently trades at $81.19.
Read our full, actionable report on Meritage Homes here, it’s free.
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 $760.3 million, up 3.1% year on year. This number topped analysts’ expectations by 6.7%. It was an incredible quarter as it also recorded a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.
The stock is up 29% since reporting and currently trades at $273.08.
Read our full, actionable report on Installed Building Products here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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