Construction - Special Trade Contractors
TopBuild Corp., together with its subsidiaries, engages in the installation and distribution of insulation and other building material products to the construction industry. The company operates in two segments, Installation and Specialty Distribution. It provides insulation products and accessories, glass and windows, rain gutters, afterpaint products, fireproofing products, garage doors, fireplaces, closet shelving, roofing materials, and other products; and insulation installation services. The company also offers various services and tools to assist builders in applying the principles of building science to new home construction, which include pre-construction plan reviews, diagnostic testing, and various inspection services; and home energy rating services. In addition, it distributes building and mechanical insulation, insulation accessories, and other building product materials for the residential, commercial, and industrial end markets. The company serves single-family homebuilders, single-family custom builders, multi-family builders, commercial general contractors, remodelers, and individual homeowners, as well as insulation contractors, gutter contractors, weatherization contractors, other contractors, dealers, metal building erectors, and modular home builders. It operates approximately 230 installation branches and 180 distribution centers in the United States and Canada. The company was formerly known as Masco SpinCo Corp. and changed its name to TopBuild Corp. in March 2015. TopBuild Corp. was incorporated in 2015 and is headquartered in Daytona Beach, Florida.
Discounted Cash Flow Valuation of Topbuild Corp
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
The average Net Margin over the past 5 years is +8.45%.
The trend of Net Margin over the past 5 years is +0.76%.
The average ROA over the past 5 years is +11.43%.
The trend of ROA over the past 5 years is +1.63%.
The average ROE over the past 5 years is +18.66%.
The trend of ROE over the past 5 years is +2.52%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
The Debt/FCF trailing twelve month is 2.20.
The trend of Debt/FCF over the past 5 years is -0.13.
Graham’s Stability measure stands at 1.00.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
The Revenue CAGR over the past 5 years is +21.31%.
The trend of Revenue growth rate over the past 5 years is +3.37%.
The Earnings CAGR over the past 5 years is +28.59%.
The trend of Earnings growth rate over the past 5 years is -55.84%.
The Equity CAGR over the past 5 years is +14.13%.
The trend of Equity growth rate over the past 5 years is +3.23%.
The FCF CAGR over the past 5 years is +36.69%.
The trend of FCF growth rate over the past 5 years is -26.1%.