Title

Earning Preview: TopBuild this quarter’s revenue is expected to increase by 13.41%, and institutional views are neutral

Abstract

TopBuild will report fourth-quarter 2025 results on February 26, 2026 Pre-Market; this preview consolidates consensus forecasts for revenue, margins, earnings, and key segment dynamics, alongside institutional commentary gathered since January 1, 2026, to frame expectations for headline momentum, profitability trajectory, and potential stock-price catalysts.

Market Forecast

Consensus modeling for the quarter to be reported points to revenue of 1.49 billion, implying 13.41% year-over-year growth, with EBIT of 208.20 million, indicating a 3.91% year-over-year decline, and adjusted EPS of 4.54, suggesting a 10.05% year-over-year decline. Forecasts for gross margin and net margin have not been formally provided; the market is bracing for revenue expansion with some compression in profitability metrics versus last year’s comparable period. The company’s core revenue engines are installation and distribution; current-quarter projections imply growth supported by steady end-market demand and recent bolt-on acquisitions that should enhance reach and capability over time. The most prominent and scale segment is installation, which generated 858.26 million last quarter; it remains the principal earnings engine, and consolidated revenue is projected to grow 13.41% year over year this quarter, underscoring expectations for continued top-line momentum tied to that platform.

Last Quarter Review

TopBuild’s prior quarter delivered revenue of 1.39 billion, up 1.45% year over year, with a gross profit margin of 30.07%, GAAP net profit attributable to the parent company of 142.00 million, a net profit margin of 10.21%, and adjusted EPS of 5.36, down 5.63% year over year. Sequentially, net profit fell by 6.18%, reflecting seasonal moderation and a tougher operating mix against the preceding quarter’s performance base. By business, installation revenue was 858.26 million and distribution revenue was 608.89 million, with intercompany eliminations and other adjustments of 74.00 million; segment-level year-over-year growth rates were not disclosed, but the revenue mix reaffirmed installation as the largest contributor to consolidated sales.

Current Quarter Outlook (with major analytical insights)

Installation Engine: Pricing Discipline, Seasonal Mix, and Order Conversion

Installation is expected to anchor the quarter’s revenue outcome, supported by execution on orders already in the pipeline and continued pricing stewardship. The consolidated forecast implies a 13.41% year-over-year revenue increase, and installation should be a central driver given its scale in the mix and the contracting cadence observed through the year. Seasonal patterns in late-quarter activity and winter weather can temper field productivity and shift job timing, which often affects both the top line and the flow-through to margin in the period being reported. The forecasted decline in adjusted EPS suggests that while volume and revenue are tracking positively, absorption of fixed overhead, labor deployment, and job timing may weigh on margins compared with the prior-year quarter. This can show up in lower incremental margins than in warmer, higher-activity periods, particularly where crews are navigating weather delays, smaller batch sizes, or non-ideal product mix. The key to upside risk on profit will be whether project timing skewed more favorably than models assume and if field operations achieved better cost control and productivity than typical seasonality would suggest.

Distribution and Specialty: Through-cycle Resilience and Product-Mix Implications

Distribution is positioned to complement the installation engine with breadth across products and channels. Last quarter’s distribution revenue of 608.89 million underscores a sizable baseline entering the print, and the consolidation outlook indicates healthy year-over-year revenue growth at the company level. The most relevant swing factors for the quarter are product mix and price realization across categories. Where product mix skews toward higher-value assemblies and specialty solutions, gross margin outcomes can be more favorable; conversely, mix shifts toward lower-value or promotional lines can compress gross margin even as revenue scales. Inventory positioning, vendor support programs, and disciplined price-cost management will be watched closely in the print. Given the forecasted EPS decline against the backdrop of double-digit sales growth, the market is implicitly modeling some compression in spread relative to last year’s quarter, whether from product mix, logistics costs, or wage inflation. The question is whether tighter execution in procurement and merchandising helped offset these pressures enough to outperform expectations on margin dollars, even if margin rate is lower year over year.

Commercial, Spray Foam, and Coatings: M&A-Enabled Optionality and Cross-Sell

On February 3, 2026, the company announced the acquisitions of Applied Coatings and Upstate Spray Foam. These transactions expand capability in specialty applications that can carry structurally attractive unit economics and support enhanced cross-sell with existing customers. While these two bolt-ons will not meaningfully influence the quarter being reported, they are relevant to how investors handicap the durability of revenue growth for the year ahead and the quality of backlog and bids. Specialty lines such as spray foam and coatings tend to provide a broader toolkit across job types, which can reduce dependence on a narrow subset of products and enable more consistent contribution even in periods of shifting end-market mix. Integration discipline will be in focus: realizing procurement advantages, aligning field standards, and harmonizing sales processes determine how quickly acquired revenue converts into profits at targeted margin levels. Investors will look for commentary on the timing of integration milestones and the expected cadence of contribution to revenue and EBIT over the next several quarters.

Profitability Trajectory: What the EPS and EBIT Estimates Imply

Consensus implies adjusted EPS of 4.54, down 10.05% year over year, and EBIT of 208.20 million, down 3.91% year over year, despite top-line growth of 13.41%. This combination typically signals that modeled price-cost spreads are narrower or that operating leverage is less favorable relative to the prior-year quarter. Several elements can drive this: a shift in mix toward lower-margin jobs, transitory inefficiencies around staffing and scheduling in colder months, or retention of skilled labor above near-term activity levels to preserve execution capacity. On the gross margin line, without a published forecast, investors are likely bracing for a rate below last quarter’s 30.07% if seasonal mix proves adverse, though this could be offset partially by disciplined pricing and procurement. On the net margin line, the last reported period stood at 10.21%; with EPS and EBIT both forecast to decline year over year, a modest compression in net margin versus the year-ago quarter is implicitly embedded in the market’s estimates. The print will be scrutinized for any commentary on early-quarter cost trends, particularly field labor efficiency and freight, which can swing incremental margins more than materials in the short window.

Revenue Momentum vs. Margin Compression: The Stock’s Near-Term Trade-Off

Given that revenue is projected to increase at a double-digit rate while EPS and EBIT are forecast lower year over year, investors will likely benchmark the outcome along two lines: proof of sustained revenue momentum and clarity on the path to margin stabilization into the next few quarters. A clean revenue beat, even alongside mixed margin, may be judged constructively if management frames credible levers for margin recovery, such as mix normalization as seasons shift, further procurement wins, and benefits from recent acquisitions. Conversely, if revenue comes in near consensus but margins compress more than expected, the market could reset near-term earnings power estimates, particularly if commentary signals continued pressure on spread. Execution on job timing and backlog conversion will be key to navigating this trade-off, as will any update to capital allocation, such as continued bolt-on M&A that broadens specialty offerings with favorable unit economics.

Sequential Dynamics and Seasonality: Reading the Quarter-on-Quarter Signals

Last quarter’s net profit declined 6.18% sequentially, a reminder that quarter-to-quarter comparisons in this business can be shaped by calendar and weather as much as by underlying demand. For the quarter to be reported, investors will parse sequential patterns in revenue and margin to assess whether typical seasonality held or if the company was able to execute above seasonal norms. Key indicators include the cadence of installation days, the mix of higher-complexity jobs, and any commentary on supply chain continuity that might have reduced volatility in the field. If sequential performance shows stabilization or improvement in margin dollars even with softer rates, it may bolster confidence that the company is positioned to expand earnings as seasonal constraints ease.

Cash Generation and 2026 Setup: What Matters After the Print

The market will look for confirmation that the company converted revenue into cash consistently through the quarter, keeping days sales outstanding, inventory turns, and payables discipline aligned with historical patterns. Strong cash conversion can mitigate the impact of near-term margin pressure by enabling continued investment and M&A without undue balance-sheet strain. Investors will also watch for qualitative guidance on 2026 demand cadence, particularly how management anticipates mix evolving and how the recent acquisitions will be integrated and scaled. Clear milestones for integration, procurement synergy capture, and cross-sell ramp will help the market translate top-line growth into a firmer EBITDA and EPS outlook for the year ahead.

Analyst Opinions

Among recent institutional commentaries collected during the period, neutral views dominate. One notable update was an initiation at Hold with a 410.00 price target, signaling a balanced stance into the report. The Hold designation indicates a perception that upside and downside risks are roughly balanced near term, with revenue momentum acknowledged but offset by questions around margin trajectory and the timing and magnitude of synergy realization from recent acquisitions. Neutral accounted for 100% of the opinions captured in our review window; there was no clear clustering of explicitly bullish or bearish previews in the available coverage set. The cautious-neutral framing typically reflects three considerations heading into this print. First, consensus calls for a 13.41% year-over-year increase in revenue concurrent with declines in EBIT and EPS, which often leaves limited room for error on price-cost and mix, especially in a seasonally trickier quarter. Second, visibility on how quickly recent bolt-on acquisitions will translate to accretive operating profit is still developing; integration cadence and near-term cost to integrate can dampen margin even as strategic fit is constructive. Third, while last quarter’s net margin stood at 10.21% with gross margin at 30.07%, investors appear to be modeling a modest contraction year over year, and neutral ratings often sit on the need for confirmation that margin stabilization is at hand. From a stock-reaction perspective, neutral-leaning institutions will likely look for either a revenue beat that challenges the extent of modeled margin compression or margin performance that proves more resilient than feared. Clarity on mix, labor efficiency, and procurement tailwinds—plus early commentary on contribution timing from recently acquired specialty businesses—could be enough to convert a neutral stance into a more constructive view. Conversely, if the print reflects the forecasted revenue growth but points to a larger-than-expected drag on EBIT and EPS, the balanced posture would suggest patience until evidence of margin repair emerges. Overall, the prevailing neutral view highlights that the skew in expectations is for solid top-line delivery with greater debate on earnings power, keeping the spotlight on execution details rather than on macro commentary alone.