GMS Delivers Blowout Q4 Earnings; Shares Rise 4.8%

Gypsum Management & Supply (GMS) has delivered a blowout quarterly performance driven by continued momentum in residential end markets, favorable pricing trends, and acquisition revenues. Shares of the company climbed 4.8% to close at $45.10 on Thursday.

GMS engages in the distribution of wallboard and suspended ceilings systems and complementary interior construction products. (See GMS stock chart on TipRanks)

For the fourth quarter, adjusted earnings stood at $1.07 per share, up 91% year-over-year, and surpassed the Streets’ estimate of $0.81 per share.

Net sales climbed 20.9% to $932.20 million and outpaced analysts’ estimates of $855.62 million.

For the full fiscal year 2021, adjusted earnings grew 19.2% to $3.54 per share, and net sales grew 1.8% to $3.3 billion.

On an annual basis, sales of wallboard, ceiling, steel framing, and complementary product grew 16.6%, 9.1%, 24.2%, and 31.4%, respectively.

President and CEO of GSM John C. Turner, Jr. said, “We successfully capitalized on opportunities created by tailwinds from a strong residential market and robust demand in complementary products while also continuing to address challenges presented by a continued soft commercial market, supply constraints and meaningful inflation.”

During the quarter, the company undertook a senior note offering of $350 million to repay a portion of its term loan facility, completed the acquisition of D.L. Building Materials in Canada and opened four greenfield locations in the U.S.

Following the earnings, Raymond James analyst Sam Darkatsh maintained a Hold rating on the stock.

Darkatsh had raised his estimates on June 21 in anticipation of the company’s solid performance in the fourth quarter.

The stock has a Moderate Buy consensus rating based on 2 Buys and 2 Holds. The average GMS analyst price target of $53.33 implies 18.25% upside potential from current levels. Shares gained 86.3% over the past year.

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