GMS (GMS) Reports Q2: Everything You Need To Know Ahead Of Earnings

Building materials distributor GMS (NYSE:GMS) will be announcing earnings results tomorrow before market hours. Here’s what to expect.

GMS met analysts’ revenue expectations last quarter, reporting revenues of $1.41 billion, up 8.4% year on year. It was a weak quarter for the company, with a miss of analysts’ earnings estimates.

Is GMS a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting GMS’s revenue to grow 5.4% year on year to $1.49 billion, improving from the 3.7% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.14 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. GMS has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 1.9% on average.

Looking at GMS’s peers in the industrial distributors segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Boise Cascade posted flat year-on-year revenue, beating analysts’ expectations by 1.5%, and Beacon Roofing Supply reported revenues up 6.8%, in line with consensus estimates. Boise Cascade traded up 4.4% following the results while Beacon Roofing Supply was down 13.4%.

Read our full analysis of Boise Cascade’s results here and Beacon Roofing Supply’s results here.

Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 thanks to cooling inflation. 2024 has been a different story as mixed signals have led to market volatility, and while some of the industrial distributors stocks have fared somewhat better, they have not been spared, with share prices down 3% on average over the last month. GMS is down 2.9% during the same time and is heading into earnings with an average analyst price target of $93.2 (compared to the current share price of $92.05).

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefitting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.