TopBuild (BLD) Stock Analysis & Winston Score

TopBuild Corp. installs and distributes insulation and other building products for homes and commercial buildings across the United States. Its main customers are homebuilders, contractors, and construction companies. The company operates through two segments — installation services and specialty distribution — making it one of the largest insulation installers in the country.

TopBuild earns money by charging for labor and materials when it installs insulation, and by selling building products wholesale through its distribution network. It operates almost entirely in the U.S. and generates over $5 billion in annual revenue. Its scale gives it a cost and logistics advantage over smaller regional competitors, but the business is closely tied to housing construction activity. The biggest risk is a prolonged slowdown in new home construction, which directly reduces demand for its services. On the other hand, energy efficiency regulations and the push for better-insulated buildings could support steady long-term demand.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+17.2% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

-11.8% YoY

YoY Growth Rate

Earnings declining

Insider Activity

1.1%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$269M cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

TopBuild is a rare growth stock that's already generating positive cash flow while growing at 17%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

27.7%

Modest — 27.7% gross margin

Operating Margin

12.2%

Healthy — 12.2% operating margin

ROCE

3.3%

Weak — 3.3% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+6.4%

Slow sales growth (6.4% YoY)

EPS YoY

-9.9%

Earnings shrinking (-9.9% YoY)

Slight earnings drop. Typical near a cyclical low.

EPS Consistency

2/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion

152%

Turns 152% of profit into real cash

FCF Margin

12.5%

Converts sales into free cash efficiently (12.5%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

1.22

Elevated debt (1.22)

Interest Cover

6.39x

Adequate interest coverage (6.4x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

P/E Ratio (TTM)

19.8x

no trend

Fair value — P/E 19.8

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward

-0.2

SLOWING

Earnings expected to fall — forward P/E higher than today

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Dividends

Not applicable for this business.

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