IBP - Installed Building Products: Capital-Light Growth Throwing Off Free Cash Flow Attractive

2024-05-29 08:00:00 ET

Summary

• Installed Building Products is well-positioned to capitalize on fundamental tailwinds and expand its competitive advantage.
• IBP has shown consistent revenue and earnings growth, with double-digit compounding rates over the past nine years.
• The company's high operating margins and capital turnover give it a competitive advantage in the homebuilding industry.

Investment Summary

In my best estimation, Installed Building Products ( IBP ) is well positioned to 1) capitalize on fundamental tailwinds and 2) expand its competitive advantage to trade at or above $307 per share over the coming 18-24 months. Here, I will discuss all of the moving parts to this investment thesis, linking this back to first principles investing of “how much cash can this company throw off in the next 5 years”....

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