GMS (GMS) Stock Forecast & Price Target

GMS Inc. demonstrates a positive financial outlook driven by resilient revenue growth in its core wallboard and steel studs segments, which benefit from stickier pricing and a favorable blend of end-market demands. The company’s complementary products have also shown a 5% growth, suggesting a strong market presence across various construction segments despite the challenges faced in single-family housing. Furthermore, financial models indicate an expectation of modest sequential improvements in gross margins, supported by the anticipated stabilization of end-market demands and recovery in volumes.

GMS Inc. is experiencing a concerning decline in its gross margin, which fell 20 basis points sequentially to 31.2%, reaching the lowest level since fiscal year 2015, and deviating from the anticipated range. The company's fiscal year 2025 estimated EBITDA is projected to decrease by 9% to $496 million following a disappointing third quarter and weak guidance for the fourth quarter, with sales showing flat year-over-year performance and a notable organic decline of 7%. Furthermore, the forecasted EBITDA margin is expected to drop significantly by 210 basis points year-over-year, reflecting an inability to generate sufficient operational gains, thereby limiting short-term catalysts for improvement.