Installed Building Products, Inc. (IBP) Stock Analysis

Installed Building Products (IBP) benefits from several durable competitive advantages in the fragmented U.S. building products installation market. Its national scale—over 250 branches across 48 states¹—enables direct purchasing from manufacturers, bypassing intermediaries and securing favorable pricing and supply reliability. This is particularly valuable in periods of material scarcity; for example, IBP’s reliance on domestically sourced fiberglass insulation insulated it from recent tariff and supply disruptions that affected smaller, import-dependent rivals².

IBP’s acquisition-driven growth model is another edge. The company has completed over 200 acquisitions since 1999, integrating local operators while retaining their management and trade names. This approach preserves customer relationships and local market knowledge, which are critical in a service business. In 2024, IBP acquired nine businesses, adding over $100 million in annual revenue³, and continues to target at least $100 million in acquired revenue per year—outpacing regional competitors like TopBuild and smaller independents.

Customer concentration risk is low; the largest customer accounts for just 4% of revenue⁴, and the top ten for 15%. IBP’s scale also supports superior employee benefits and training, contributing to a 2.8% installer turnover rate—well below the 3.9% industry average⁵. This underpins consistent service quality, a key differentiator in a labor-intensive sector.

In sum, IBP’s scale, disciplined capital allocation, and integration capabilities create high barriers to entry and support above-average profitability versus peers.⁶⁷⁸