As the Q4 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the home builders industry, including Installed Building Products (NYSE:IBP) and its peers.
Traditionally, homebuilders have built competitive advantages with economies of scale that lead to advantaged purchasing and brand recognition among consumers. Aesthetic trends have always been important in the space, but more recently, energy efficiency and conservation are driving innovation. However, these companies are still at the whim of the macro, specifically interest rates that heavily impact new and existing home sales. In fact, homebuilders are one of the most cyclical subsectors within industrials.
The 12 home builders stocks we track reported a slower Q4. As a group, revenues beat analysts’ consensus estimates by 1.2%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 15.7% since the latest earnings results.
Installed Building Products (NYSE:IBP)
Founded in 1977, Installed Building Products (NYSE:IBP) is a company specializing in the installation of insulation, waterproofing, and other complementary building products for residential and commercial construction.
Installed Building Products reported revenues of $750.2 million, up 4.1% year on year. This print fell short of analysts’ expectations by 1.6%. Overall, it was a slower quarter for the company with a significant miss of analysts’ organic revenue estimates.
“Our fourth-quarter results capped off another record year for IBP, reinforcing our longstanding commitment to providing residential and commercial customers with high-quality, efficient building product installation services. Record profitability in 2024 drove another year of strong operating cash flow. During 2024, we continued to grow the company by adding over $100 million in annual revenue through acquisitions while distributing a combined $230 million to shareholders through dividends and share repurchases,” stated Jeff Edwards, Chairman and Chief Executive Officer.
Unsurprisingly, the stock is down 2% since reporting and currently trades at $168.23.
Is now the time to buy Installed Building Products? Access our full analysis of the earnings results here, it’s free.
Best Q4: Champion Homes (NYSE:SKY)
Founded in 1951, Champion Homes (NYSE:SKY) is a manufacturer of modular homes and buildings in North America.
Champion Homes reported revenues of $644.9 million, up 15.3% year on year, outperforming analysts’ expectations by 9.2%. The business had an incredible quarter with a solid beat of analysts’ sales volume estimates and an impressive beat of analysts’ EPS estimates.
The stock is down 11.7% since reporting. It currently trades at $81.95.
Is now the time to buy Champion Homes? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: Toll Brothers (NYSE:TOL)
Started by two brothers who started by building and selling just one home in Pennsylvania, today Toll Brothers (NYSE:TOL) is a luxury homebuilder across the United States.
Toll Brothers reported revenues of $1.86 billion, down 4.6% year on year, falling short of analysts’ expectations by 2.9%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
As expected, the stock is down 24.2% since the results and currently trades at $92.50.
Read our full analysis of Toll Brothers’s results here.
Lennar (NYSE:LEN)
One of the largest homebuilders in America, Lennar (NYSE:LEN) is known for constructing affordable, move-up, and retirement homes across a range of markets and communities.
Lennar reported revenues of $7.63 billion, up 4.4% year on year. This result surpassed analysts’ expectations by 2%. Zooming out, it was a mixed quarter as it also recorded a solid beat of analysts’ EPS estimates but a miss of analysts’ backlog estimates.
The stock is down 13.8% since reporting and currently trades at $103.52.
Read our full, actionable report on Lennar here, it’s free.
Taylor Morrison Home (NYSE:TMHC)
Named “America’s Most Trusted Home Builder” in 2019, Taylor Morrison Home (NYSE:TMHC) builds single family homes and communities across the United States.
Taylor Morrison Home reported revenues of $2.36 billion, up 16.7% year on year. This print beat analysts’ expectations by 9.5%. It was a strong quarter as it also produced a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EPS estimates.
Taylor Morrison Home achieved the biggest analyst estimates beat among its peers. The stock is down 12.1% since reporting and currently trades at $54.81.
Read our full, actionable report on Taylor Morrison Home here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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