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Investing.com - Raymond (NSE:RYMD) James raised its price target on GMS Inc . (NYSE:GMS) to $90.00 from $80.00 on Friday, while maintaining an Outperform rating on the building materials distributor’s stock. The company, currently trading at $81.01 with a market capitalization of $3.08 billion, has caught analysts’ attention with 5 analysts recently revising their earnings estimates upward, according to InvestingPro data.
The firm cited GMS’s position as a co-industry-leading distributor with scale benefits and attractive industry fundamentals, despite acknowledging the current soft macro environment and negative investor sentiment surrounding the housing sector. The company maintains strong financial health with a current ratio of 1.91, indicating solid liquidity to meet short-term obligations.
Raymond James highlighted recent transaction precedents that support GMS’s valuation, specifically noting that GMS’s primary competitor FBM recently acquired REW Materials for approximately 10 times EBITDA and 0.7 times price-to-sales.
The investment firm expressed a positive view on GMS shares for investors willing to wait through near-term housing headwinds, suggesting the company’s fundamentals remain strong despite current market challenges.
GMS Inc., which distributes wallboard, ceilings, steel framing and complementary construction products, has been navigating a challenging housing market while maintaining its competitive position in the building materials distribution industry. With annual revenue of $5.51 billion and a "GOOD" financial health score from InvestingPro, the company demonstrates resilience amid market challenges. Discover more insights and 8 additional ProTips about GMS in the comprehensive Pro Research Report.
In other recent news, GMS Inc. reported its fourth-quarter fiscal year 2025 results, revealing a notable earnings per share (EPS) beat but a revenue miss. The company posted an EPS of $1.29, surpassing the forecasted $1.11, marking a 16.22% surprise. However, revenue came in at $1.33 billion, falling short of the anticipated $1.43 billion. Despite the revenue shortfall, GMS implemented $55 million in annualized cost savings and is expanding in complementary products and digital investments. Analyst firm Stephens raised its price target for GMS to $95 from $90, maintaining an Overweight rating due to the company’s better-than-expected quarterly performance. The firm’s guidance for the first quarter of fiscal 2026 exceeded sales estimates and beat adjusted EBITDA expectations. GMS’s adjusted EBITDA margin declined to 8.2%, though it surpassed expectations, and the company reported a gross margin of 31.2% for the quarter. These developments highlight GMS’s efforts to manage costs effectively amid a challenging macro environment.
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