Value
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.2 |
| P/S | 8.9 |
| EV/EBITDA | 3.5 |
| Fwd P/E | 6.3 |
| PEG | 6.8 |
| Analyst target | 3.0 |
- ▸Forward P/E: 20.4x
- ▸PEG: 1.05
IBP · Why this verdict
Why Installed Building Products, In (IBP) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.0/10
ConfidenceHIGH
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow equal to 124% of net income demonstrates that reported earnings are well-supported by actual cash generation, providing real financial flexibility and reducing reliance on balance-sheet financing. Quality breakdown | Free cash flow as a percentage of net income remains above 100% in each of the next two annual filings, confirming that the conversion quality is structural rather than episodic. | →Stable |
| CounterStrong cash conversion alongside a 38% return on equity is appealing on paper, but the balance sheet carries a debt-to-equity ratio of 1.8 — if the operating environment softens further, that leverage reduces the cushion that the high conversion currently provides. | ||
Revenue contracted approximately 4% year-over-year, and a single product category accounts for 58% of the business, creating a concentrated top-line exposure that amplifies the effect of any demand softness in that core segment. Bear case | Year-over-year revenue growth turns positive in the next reported quarter, reversing the contraction trend and signaling that demand has stabilized. | →Stable |
| CounterThe earnings beat history over the prior three quarters, with beats of 23%, 16%, and 18%, suggests management may be under-promising and the revenue picture could be better than trailing numbers indicate. | ||
Three consecutive quarters of double-digit earnings beats established a strong track record of over-delivering on expectations, though the most recent quarter reversed that pattern with a substantial miss of -18.75%. Earnings | The next quarterly report returns to a positive earnings surprise above 5%, signaling that the most recent miss was an isolated anomaly rather than the start of a new execution trend. | →Stable |
| CounterA miss of -18.75% following three large beats is a meaningful signal that the demand backdrop may have deteriorated; reverting to large beats may be structurally difficult if revenue continues to contract. | ||
A confirmed death cross combined with falling on-balance volume and a below-average moving-average position reflects sustained selling pressure that has not yet reversed and currently blocks a constructive entry setup. Engine gate (failed) | The death cross resolves and price recaptures the 200-day moving average with positive volume confirmation within 60 days, removing the technical overhang on the setup. | →Stable |
| CounterMACD is improving and RSI has declined to 43, approaching levels where buying historically re-emerges; the stage may be set for a technical recovery if earnings stabilize next quarter. | ||
Free cash flow equal to 124% of net income demonstrates that reported earnings are well-supported by actual cash generation, providing real financial flexibility and reducing reliance on balance-sheet financing.
→StableQuality breakdown
- Expectation
- Free cash flow as a percentage of net income remains above 100% in each of the next two annual filings, confirming that the conversion quality is structural rather than episodic.
CounterStrong cash conversion alongside a 38% return on equity is appealing on paper, but the balance sheet carries a debt-to-equity ratio of 1.8 — if the operating environment softens further, that leverage reduces the cushion that the high conversion currently provides.
Revenue contracted approximately 4% year-over-year, and a single product category accounts for 58% of the business, creating a concentrated top-line exposure that amplifies the effect of any demand softness in that core segment.
→StableBear case
- Expectation
- Year-over-year revenue growth turns positive in the next reported quarter, reversing the contraction trend and signaling that demand has stabilized.
CounterThe earnings beat history over the prior three quarters, with beats of 23%, 16%, and 18%, suggests management may be under-promising and the revenue picture could be better than trailing numbers indicate.
Three consecutive quarters of double-digit earnings beats established a strong track record of over-delivering on expectations, though the most recent quarter reversed that pattern with a substantial miss of -18.75%.
→StableEarnings
- Expectation
- The next quarterly report returns to a positive earnings surprise above 5%, signaling that the most recent miss was an isolated anomaly rather than the start of a new execution trend.
CounterA miss of -18.75% following three large beats is a meaningful signal that the demand backdrop may have deteriorated; reverting to large beats may be structurally difficult if revenue continues to contract.
A confirmed death cross combined with falling on-balance volume and a below-average moving-average position reflects sustained selling pressure that has not yet reversed and currently blocks a constructive entry setup.
→StableEngine gate (failed)
- Expectation
- The death cross resolves and price recaptures the 200-day moving average with positive volume confirmation within 60 days, removing the technical overhang on the setup.
CounterMACD is improving and RSI has declined to 43, approaching levels where buying historically re-emerges; the stage may be set for a technical recovery if earnings stabilize next quarter.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Free cash flow conversion of 124% of net income and a prior streak of double-digit earnings beats frame a quality-leaning cyclical, but a confirmed death cross, declining revenue, and an unfavorable risk/reward setup make the current price level unattractive for new entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 7.4 |
| Gross margin | 2.8 |
| Op margin | 3.5 |
| Net margin | 4.3 |
| Current ratio | 9.7 |
| FCF quality | 9.1 |
| Moat | 4.2 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 38%
- ▸Excellent cash conversion: 124% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
3.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.6 |
| EPS growth | 5.9 |
- ▸Declining revenue: -4%
Momentum
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.7 |
| MACD | 10.0 |
| OBV | 1.9 |
| MA position | 4.0 |
| Volume | 0.7 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -2.6%/30d — confirmed downtrend
Sentiment
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 5.0 |
| Price target | 5.5 |
Insider
5.2/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.5 |
| holder change | 5.0 |
- ▸Insider buying (low materiality) — $1,042,804 (0.017% of mkt cap)
Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.8 |
| quality rank | 7.6 |
| growth rank | 7.4 |
- ▸Superior ROE vs peers
Technical
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.8 |
| support resistance | 2.0 |
| 52w position | 3.1 |
Risk (lower is worse)
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.7 |
| days to cover | 7.9 |
| volatility | 1.3 |
| put call | 9.3 |
| implied vol | 3.3 |
| beta | 4.3 |
| debt equity | 3.5 |
- ▸High IV: 60%
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 9.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 8.5 |
| dividend safety | 7.0 |
| news activity | 7.0 |
- ▸Estimates up 21.4% (30d)
- ▸Strong earnings: 3B/1M
- ▸Dividend: 145.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +1 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+1Passed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:32d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:4.1<4.5
- ASYMMETRY:-0.7=NEGATIVE
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
-0.69
Upside
-10.1%
Downside
14.6%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 63
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.71>1.3
Investment implication
The F-path SELL output reflects an overall score of 4.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Catalyst at 7.2) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.1<4.5, ASYMMETRY:-0.7=NEGATIVE, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is -0.69 — supplementary context, not the trigger for this path.
The strongest dimensions are Catalyst at 7.2, Quality at 6.5, and Value at 5.6; the weakest are Technical at 2.6, Growth at 3.8, and Peer rank at 4.0. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of -0.69 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Free Cash Flow Conversion
Trip ifFree cash flow falls below $0 for 2 consecutive quarters, indicating the 124%-of-net-income cash conversion that underpins this pillar has broken down.
- P2Revenue Decline And Product Concentration
Trip ifYear-over-year revenue growth exceeds 5% for 2 consecutive quarters, reversing the contraction.
- P3Prior Beat Streak Broken By Large Miss
Trip ifEPS surprise rises above 5% for 2 consecutive quarters following the next reported result, demonstrating the recent large miss was anomalous.
- P4Death Cross Blocks Near Term Entry
Trip ifPrice crosses above the 200-day moving average and sustains above it for 20 consecutive trading days.