GMS (GMS) AI Stock Analysis

• Market Cap: $4.20B
• Dividend Yield: N/A
• Average Volume (3M): 1.03M
• Price to Earnings (P/E): 42.4
• Beta (1Y): 0.88
• Revenue Growth: -1.10%
• EPS Growth: -57.18%
• Country: US
• Employees: 7,624
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction
• EPS (TTM): 1.76
• Shares Outstanding: 41,639,362
• 10 Day Avg. Volume: 1,030,585
• 30 Day Avg. Volume: 1,026,744
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.39
• Enterprise Value/Revenue: 1.07
• Enterprise Value/Gross Profit: 3.43
• Enterprise Value/Ebitda: 14.18
• 1Y Price Target: $104.17
• Price Target Upside: -5.27% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

• Rating: 65 Neutral
• Price Target: $118.00 ▲(7.31% Upside)

GMS's overall stock score reflects a mix of challenges and opportunities. The most significant factor is the company's financial performance, which is under pressure due to declining profitability and high leverage. Technical analysis suggests caution due to overbought conditions. Valuation concerns arise from a high P/E ratio and lack of dividend yield. The earnings call provided a balanced view with both strengths and challenges. The merger agreement with Home Depot is a positive strategic development, offering potential long-term benefits.

Positive Factors

Negative Factors

GMS Business Overview & Revenue Model

Company Description

GMS (GMS) is a leading distributor of interior building products for the construction and remodeling industries in the United States. The company operates primarily in the drywall, ceiling, and steel framing sectors, providing a diverse range of products that include gypsum board, ceiling tiles, and metal framing systems. GMS serves a wide customer base, including contractors, builders, and retailers, positioning itself as a critical player in the supply chain for both residential and commercial construction projects.

How the Company Makes Money

GMS generates revenue primarily through the wholesale distribution of its building products. The company operates a network of distribution centers and branches across the U.S., allowing it to serve a broad geographic area efficiently. Key revenue streams include direct sales of drywall, ceilings, and metal framing products to contractors and builders, as well as ancillary services such as logistics and supply chain management. Additionally, GMS benefits from strategic partnerships with leading manufacturers, which not only enhances its product offerings but also fosters customer loyalty and enables bulk purchasing discounts. The company's ability to leverage economies of scale in its operations and maintain a strong market presence in the construction sector significantly contributes to its earnings.

GMS Financial Statement Overview

Summary

GMS shows stable revenue but declining profitability, with rising costs impacting margins. The balance sheet remains solid with moderate leverage and strong equity. Cash flow performance is mixed, with strong operational cash generation offset by declining free cash flow, indicating potential challenges ahead.

Income Statement

The TTM revenue growth is marginal at 0.21%, reflecting stability in sales but indicating limited expansion. Gross profit margin is healthy at 31.23%, but the net profit margin has decreased to 2.09% from 5.02% last year, suggesting a decline in profitability. EBIT and EBITDA margins also show a downward trend, indicating increased costs or operational inefficiencies.

Balance Sheet

The debt-to-equity ratio stands at 1.12, showing moderate leverage. Return on equity is weaker at 8.13% compared to last year's 18.90%, affected by declining net income. The equity ratio remains robust at 37.07%, suggesting a stable financial structure despite the leverage.

Cash Flow

Free cash flow decreased by 10.62% year-over-year, signaling potential challenges in cash generation. The operating cash flow to net income ratio is strong at 3.32, indicating efficient cash conversion. However, the free cash flow to net income ratio at 2.91 reflects a drop, suggesting reduced financial flexibility.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	5.48B	5.51B	5.50B	5.33B	4.63B	3.30B
Gross Profit	1.71B	1.72B	1.78B	1.73B	1.49B	1.06B
EBITDA	412.64M	427.52M	582.99M	640.25M	542.15M	299.86M
Net Income	101.78M	115.47M	276.08M	332.99M	273.44M	105.56M
Balance Sheet
Total Assets	3.85B	3.83B	3.76B	3.27B	3.10B	2.48B
Cash, Cash Equivalents and Short-Term Investments	39.93M	55.60M	166.15M	164.75M	101.92M	167.01M
Total Debt	1.66B	1.60B	1.53B	1.29B	1.33B	1.10B
Total Liabilities	2.39B	2.41B	2.30B	1.99B	2.04B	1.66B
Stockholders Equity	1.45B	1.42B	1.46B	1.27B	1.06B	822.46M
Cash Flow
Free Cash Flow	328.61M	336.08M	376.00M	389.06M	138.53M	123.43M
Operating Cash Flow	375.57M	383.57M	433.25M	441.74M	179.61M	153.30M
Investing Cash Flow	-121.89M	-239.49M	-430.77M	-111.47M	-387.21M	-63.59M
Financing Cash Flow	-266.60M	-255.22M	-437.00K	-265.61M	143.28M	-136.62M

GMS Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 109.96
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GMS, the sentiment is Positive. The current price of 109.96 is above the 20-day moving average (MA) of 109.68, above the 50-day MA of 108.74, and above the 200-day MA of 88.18, indicating a bullish trend. The MACD of 0.80 indicates Positive momentum. The RSI at 73.37 is Negative, neither overbought nor oversold. The STOCH value of 92.85 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GMS.

GMS Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JBI	76 Outperform	1.42B	33.11	13.57%	―	-14.06%	-65.38%
ROCK	74 Outperform	1.82B	14.79	12.23%	―	-7.49%	10.79%
GMS	65 Neutral	$4.20B	42.37	6.97%	―	-1.10%	-57.18%
BXC	63 Neutral	597.61M	22.40	4.57%	―	-2.32%	-21.44%
BLDR	59 Neutral	13.47B	18.49	18.10%	―	-6.39%	-42.36%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

GMS Corporate Events

GMS Completes Merger and Delists from NYSE

On September 4, 2025, GMS Company completed a merger that led to the termination of its First Lien Credit Agreement and Asset Based Lending Facility, repaying all outstanding obligations. The company also redeemed its $350 million Senior Notes and amended its certificate of incorporation and bylaws. As part of the merger, GMS requested the delisting of its shares from the NYSE, signaling a significant shift in its market presence and regulatory obligations.

GMS Announces Conditional Redemption Amid Home Depot Merger

On July 25, 2025, GYP Holdings III Corp., a subsidiary of GMS Inc., announced a conditional full redemption of its $350 million Senior Notes due 2029. This redemption is contingent upon the completion of a merger agreement with The Home Depot, which plans to acquire GMS Inc. through a tender offer and subsequent merger.

GMS Announces Merger Agreement with Home Depot

On June 29, 2025, GMS Inc. entered into a merger agreement with The Home Depot and its subsidiary, SRS Distribution, to be acquired for $110 per share, valuing the deal at approximately $5.5 billion. This acquisition is expected to enhance GMS’s offerings and market reach, benefiting shareholders, customers, and employees by expanding product and service options. The merger is anticipated to close by January 31, 2026, pending regulatory approvals and other customary conditions.

GMS Receives Acquisition Proposal from QXO, Inc.

On June 19, 2025, GMS Inc., a leading distributor of specialty building products in North America, announced it received an unsolicited acquisition proposal from QXO, Inc. to purchase all outstanding shares at $95.20 per share in cash. The GMS Board of Directors, with guidance from independent legal and financial advisors, will review the proposal to determine the best course of action for the company and its shareholders. No immediate action is required from shareholders, and the company will not comment further until the review is complete.

GMS Reports Q4 FY2025 Financial Results

GMS reported its Q4 and full-year FY2025 financial results, highlighting a slight growth in net sales driven by strategic acquisitions and strong cash flow generation despite challenging market conditions. The company implemented significant cost reductions and maintained resilient pricing in key product categories such as Wallboard and Ceilings, although Steel Framing prices were pressured. The company also repurchased shares and maintained substantial liquidity, positioning itself for continued strategic execution.