As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the home construction materials industry, including Builders FirstSource (NYSE:BLDR) and its peers.
Traditionally, home construction materials companies have built economic moats with expertise in specialized areas, brand recognition, and strong relationships with contractors. More recently, advances to address labor availability and job site productivity have spurred innovation that is driving incremental demand. However, these companies are at the whim of residential construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of home construction materials companies.
The 12 home construction materials stocks we track reported a satisfactory Q2. As a group, revenues missed analysts’ consensus estimates by 0.9% while next quarter’s revenue guidance was 0.7% above.
While some home construction materials stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.6% since the latest earnings results.
Builders FirstSource (NYSE:BLDR)
Headquartered in Irving, TX, Builders FirstSource (NYSE:BLDR) is a construction materials manufacturer that offers a variety of lumber and lumber-related building products.
Builders FirstSource reported revenues of $4.23 billion, down 5% year on year. This print fell short of analysts’ expectations by 0.7%. Overall, it was a slower quarter for the company with full-year revenue and EBITDA guidance missing analysts’ expectations.
Peter Jackson, CEO of Builders FirstSource, commented: “Our durable results in the second quarter reinforce the advantage of our differentiated product offerings and commitment to execution. In this challenging market environment, we are prioritizing what’s within our control—serving customers with excellence, leveraging technology, and managing the business with discipline. We remain focused on building for the future through investments in value-added solutions, digital capabilities, and operational efficiency. These efforts are strengthening our position in the industry and laying the foundation to emerge stronger and accelerate delivery of long-term shareholder value as market conditions improve.”
Builders FirstSource delivered the weakest full-year guidance update of the whole group. The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $124.94.
Read our full report on Builders FirstSource here, it’s free for active Edge members.
Best Q2: Masco (NYSE:MAS)
Headquartered just outside of Detroit, MI, Masco (NYSE:MAS) designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets.
Masco reported revenues of $2.05 billion, down 1.9% year on year, outperforming analysts’ expectations by 2.5%. The business had a stunning quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.
The market seems happy with the results as the stock is up 6.7% since reporting. It currently trades at $70.18.
Is now the time to buy Masco? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: Gibraltar (NASDAQ:ROCK)
Gibraltar (NASDAQ:ROCK) makes renewable energy, agriculture technology and infrastructure products. Its mission statement is to make everyday living more sustainable.
Gibraltar reported revenues of $309.5 million, up 13.1% year on year, falling short of analysts’ expectations by 17.9%. It was a disappointing quarter as it posted full-year revenue and EPS guidance missing analysts’ expectations.
Gibraltar delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 18.2% since the results and currently trades at $76.07.
Read our full analysis of Gibraltar’s results here.
Griffon (NYSE:GFF)
Initially in the defense industry, Griffon (NYSE:GFF) is a now diversified company specializing in home improvement, professional equipment, and building products.
Griffon reported revenues of $613.6 million, down 5.3% year on year. This print lagged analysts' expectations by 5.6%. It was a slower quarter as it also recorded a significant miss of analysts’ revenue estimates and full-year revenue guidance missing analysts’ expectations.
The stock is down 6.8% since reporting and currently trades at $76.77.
Read our full, actionable report on Griffon here, it’s free for active Edge members.
Quanex (NYSE:NX)
Starting in the seamless tube industry, Quanex (NYSE:NX) manufactures building products like window, door, kitchen, and bath cabinet components.
Quanex reported revenues of $495.3 million, up 76.7% year on year. This number beat analysts’ expectations by 0.5%. Zooming out, it was a disappointing quarter as it recorded full-year EBITDA guidance missing analysts’ expectations.
Quanex achieved the fastest revenue growth among its peers. The stock is down 26.5% since reporting and currently trades at $15.35.
Read our full, actionable report on Quanex here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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