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Investing.com - Loop Capital raised its price target on GMS Inc . (NYSE:GMS) to $95.00 from $80.00 on Friday, while maintaining a Hold rating following multiple takeover offers for the wallboard distributor. The stock, currently trading at $104.43, has shown significant volatility according to InvestingPro data, with a beta of 1.62.
The revision comes after GMS received unsolicited acquisition proposals from both QXO and Home Depot (NYSE:HD). QXO submitted an all-cash offer of $95.20 per share, valuing GMS at approximately $5 billion, which represents a 27% premium over GMS’s 60-day volume weighted average price. InvestingPro analysis shows the company maintains strong financial health with a current ratio of 1.91, indicating solid liquidity to meet short-term obligations.
Home Depot made a competing private offer as it seeks to strengthen its professional sales offerings, following its acquisition of SRS Distribution last year. The competing bids sent GMS stock sharply higher after the company reported what Loop Capital described as a "modest 4Q25 beat against reduced expectations."
Loop Capital notes that QXO’s offer values GMS at approximately 10 times FY26 estimated EBITDA and 9 times FY27 estimated EBITDA, placing it at the high end of GMS’s five-year valuation range. The key question remains whether Home Depot is willing to engage in a bidding war for the company.
GMS is expected to respond to QXO’s unsolicited offer by June 24, which is the deadline QXO established for the company to provide feedback on its proposal. With analysts maintaining a moderate consensus rating and net income growth expected this year, InvestingPro subscribers can access 8 additional key insights and a comprehensive Pro Research Report that provides deeper analysis of GMS’s valuation and growth prospects.
In other recent news, GMS Inc. reported its fiscal fourth-quarter 2025 results, revealing a notable earnings per share (EPS) of $1.29, which exceeded the forecasted $1.11, marking a 16.22% surprise. However, the company’s revenue fell short of expectations, coming in at $1.33 billion, a 6.99% miss compared to the anticipated $1.43 billion. Despite the revenue shortfall, the company’s guidance for the first quarter of fiscal 2026 exceeded analysts’ expectations, with projected adjusted EBITDA between $132 million and $137 million. Analysts from firms such as DA Davidson, Raymond (NSE:RYMD) James, and Stephens have adjusted their price targets for GMS, with DA Davidson raising its target to $83, Raymond James to $90, and Stephens to $95, reflecting varied levels of optimism about the company’s prospects.
DA Davidson maintained a Neutral rating on the stock, expressing concerns about wallboard price risks. Meanwhile, Raymond James maintained an Outperform rating, citing GMS’s strong industry position and fundamentals, while Stephens kept an Overweight rating, encouraged by the company’s performance in a challenging environment. GMS has been implementing cost-reduction initiatives, achieving $55 million in annualized cost savings, which has helped offset some of the impacts of lower sales volumes. The company has also been expanding its product lines and digital investments, positioning itself for future opportunities. Investors remain optimistic about GMS’s cost management and earnings performance despite the revenue miss, as indicated by the stock’s positive market reaction following the earnings announcement.
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