Since June 2024, Installed Building Products has been in a holding pattern, floating around $213.44. The stock also fell short of the S&P 500’s 13.5% gain during that period.

Does this present a buying opportunity for IBP? Or is its underperformance reflective of its story and business quality? Find out in our full research report, it’s free.

Why Are We Positive On Installed Building Products?

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.

1. Skyrocketing Revenue Shows Strong Momentum

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, Installed Building Products’s sales grew at an exceptional 14.7% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers.

2. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Installed Building Products’s EPS grew at an astounding 28.6% compounded annual growth rate over the last five years, higher than its 14.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

3. Stellar ROIC Showcases Lucrative Growth Opportunities

Growth gives us insight into a company’s long-term potential, but how capital-efficient was that growth? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

Installed Building Products’s five-year average ROIC was 21%, placing it among the best industrials companies. This illustrates its management team’s ability to invest in highly profitable ventures and produce tangible results for shareholders.

Final Judgment

These are just a few reasons why Installed Building Products ranks highly on our list. With its shares lagging the market recently, the stock trades at 18.2× forward price-to-earnings (or $213.44 per share). Is now a good time to initiate a position? See for yourself in our full research report, it’s free.

Stocks We Like Even More Than Installed Building Products

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