It's been a pretty great week for Installed Building Products, Inc. (NYSE:IBP) shareholders, with its shares surging 13% to US$234 in the week since its latest yearly results. The result was positive overall - although revenues of US$2.8b were in line with what the analysts predicted, Installed Building Products surprised by delivering a statutory profit of US$8.61 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Installed Building Products after the latest results.
Taking into account the latest results, the most recent consensus for Installed Building Products from twelve analysts is for revenues of US$3.00b in 2024. If met, it would imply a modest 7.9% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 17% to US$10.11. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.89b and earnings per share (EPS) of US$9.06 in 2024. So it seems there's been a definite increase in optimism about Installed Building Products' future following the latest results, with a decent improvement in the earnings per share forecasts in particular.
It will come as no surprise to learn that the analysts have increased their price target for Installed Building Products 24% to US$232on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Installed Building Products at US$260 per share, while the most bearish prices it at US$199. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Installed Building Products' past performance and to peers in the same industry. We would highlight that Installed Building Products' revenue growth is expected to slow, with the forecast 7.9% annualised growth rate until the end of 2024 being well below the historical 17% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.0% per year. So it's pretty clear that, while Installed Building Products' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Installed Building Products' earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Installed Building Products analysts - going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Installed Building Products that you should be aware of.
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