I understand the reasons not to buy building products distributor GMS (GMS). GMS is cheap by any measure: 6x pro forma EBITDA, ~5x free cash flow. But that alone isn't enough: it's dangerous to buy a ~4x leveraged cyclical because it's "cheap" in any market, and especially this one. And valuation aside, there are plenty of risks here.
New home construction figures are weak, particularly in single-family. Input costs are rising, potentially pressuring margins. GMS itself has highlighted intensifying pricing competition over the past few quarters, amplifying that pressure. The distributor model