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On Monday, Benchmark analyst Reuben Garner adjusted the price target for Installed Building Products (NYSE:IBP), reducing it to $210 from the previous $250, while continuing to endorse the stock with a Buy rating. Currently trading at $172.74, the stock sits near its 52-week low of $162.20, with InvestingPro analysis suggesting the stock is fairly valued. The adjustment follows the company’s fourth-quarter earnings report, which, despite falling short on revenue expectations, showcased solid performance with EBITDA of $489 million and EPS surpassing Wall Street predictions.
Installed Building Products, with a market capitalization of $4.7 billion, disclosed its 4Q24 results last Thursday, revealing revenue growth across all end markets. The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) along with earnings per share (EPS) outdid analyst estimates. InvestingPro data shows the company maintains a healthy gross profit margin of 33.8% and a strong financial health score, despite recording a slight contraction in margins.
The company’s leadership anticipates outperforming the market in the first half of 2025, despite expecting a generally challenging environment. This outlook is based on projections of flat to declining single-family housing starts and an estimated six months for the multi-family sector’s heightened backlog to normalize.
In light of these market conditions, Benchmark has revised its estimates for Installed Building Products downward for the current and following year. The new price target of $210 reflects both the lowered estimates and the increased risks that are broadly affecting the industry.
Garner’s commentary highlighted the company’s solid fourth-quarter results and its ability to exceed market performance expectations, despite the uncertain environment that the housing market is currently facing. The updated price target aims to align with the revised earnings estimates and the broader risks that are present in the market.
In other recent news, Installed Building Products reported its fourth-quarter 2024 earnings, with earnings per share (EPS) of $2.88, slightly surpassing the forecast of $2.86. However, the company’s revenue fell short of expectations, coming in at $750.2 million against the anticipated $762.89 million. Despite this revenue miss, the company achieved a record adjusted EBITDA of $132 million, highlighting its operational strength. Installed Building Products completed nine acquisitions in 2024, which are expected to enhance revenue potential moving forward. In the analyst community, DA Davidson recently adjusted its price target for the company to $225 from $260, while maintaining a Buy rating. The firm noted persistent organic sales growth and stable profit margins as positive indicators. The analysts at DA Davidson expressed confidence in the company’s ability to navigate current challenges in the residential construction market. These developments reflect a complex but optimistic outlook for Installed Building Products as it continues to navigate a challenging market environment.
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