One of the biggest stories of last week was how Installed Building Products, Inc. (NYSE:IBP) shares plunged 25% in the week since its latest quarterly results, closing yesterday at US$217. It was not a great result overall. While revenues of US$661m were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 19% to hit US$1.29 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Taking into account the latest results, Installed Building Products' 14 analysts currently expect revenues in 2026 to be US$2.99b, approximately in line with the last 12 months. Statutory earnings per share are predicted to rise 2.3% to US$9.68. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.99b and earnings per share (EPS) of US$9.60 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The consensus price target fell 10% to US$259, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the quarterly results. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Installed Building Products analyst has a price target of US$331 per share, while the most pessimistic values it at US$250. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Installed Building Products' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 1.9% growth on an annualised basis. This is compared to a historical growth rate of 9.9% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.9% per year. Factoring in the forecast slowdown in growth, it seems obvious that Installed Building Products is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Installed Building Products going out to 2028, and you can see them free on our platform here..

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.