GMS

GMS · NYSE

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GMS analyst rating

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The case for and against

Updated Aug 28, 2025

Bull case

GMS Inc. is demonstrating resilience in its revenue streams, particularly within its core wallboard and steel studs segments, which benefit from stable pricing amidst non-reconstruction strength in end markets. Complementary product lines also exhibit growth of 5%, indicating solid demand across the company's diverse geographic segments. Moreover, projections suggest gradual improvements in commercial demand and stability in single-family trends, alongside expectations of modest sequential gross margin improvements as past disruptions abate and pricing strategies stabilize.

Bear case

GMS Inc. is facing a negative outlook due to a decline in gross margin, which fell by 20 basis points to 31.2%, matching its lowest level since fiscal 2015 and failing to meet the expected range. The company's projected FY'25 EBITDA is expected to decrease by 9% to $496 million following disappointing performance in the third quarter and a weak guidance for the fourth quarter, while year-over-year sales remained flat and also fell short of expectations. Furthermore, the forecast for EBITDA percentage has been revised down to 9.0%, reflecting a significant 210 basis point year-over-year drop, with limited near-term catalysts for improvement in performance anticipated.

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