TopBuild Corp. (NYSE: BLD) — Sold at the Top, the Spread Wrung Out: An Almost-Closed Takeout That Is Now Half a Bet on Brad Jacobs’ Stock

Independent equity research. Report date: 2026-06-26. As-of price: $425.52 (BLD close 2026-06-26); QXO $17.78.

⚡ Claude’s Take

This block is the author’s own independent opinion and general information only — not investment advice. The analysis that follows takes no position and carries no price target.

Verdict: HOLD-if-owned, but take the cash; AVOID initiating here; NOT-a-short. This is a near-closed takeover with the arbitrage spread fully wrung out, where the only live decision left is whether you want to own the acquirer’s stock — and I don’t. Conviction: MEDIUM-HIGH on the deal closing; MEDIUM on the “don’t reach for the QXO leg” judgment.

TopBuild is a genuinely good business — the #1 U.S. insulation installer and #1 specialty distributor, a mid-teens-ROIC, ~1%-capex, ~$700M-FCF franchise — but that is no longer the question. On April 18, 2026 it signed a definitive merger agreement to be bought by QXO, Inc., Brad Jacobs’ building-products roll-up, for $505.00/share at signing, structured as 45% cash / 55% QXO stock (cash election $505.00, stock election 20.200 QXO shares, mandatory proration, no collar). Shareholder votes and the election deadline are June 29, 2026 — three days out. HSR cleared May 26, Canada cleared May 28, financing is fully committed with no financing condition, and there is a $600M reciprocal break fee. This deal is closing. The tell is the tape: at $425.52, BLD trades right at — fractionally through — the current package value of ~$424.79. There is no arb spread left to harvest.

Here is the non-obvious part, and the whole point of the report. The deal was struck at $505 when QXO traded near $25; QXO has since fallen ~29% to $17.78, and because the stock leg is a fixed exchange ratio with no collar, the package has mechanically de-valued from $505 to ~$425. BLD has tracked it down — not on any housing news, but because 55% of what you receive is QXO equity, and QXO is a pre-profit, ~110%-realized-vol roll-up trading at roughly 118x EV/EBITDA on an option that Brad Jacobs integrates Beacon Roofing, Kodiak, and now TopBuild into the ~$2B-EBITDA platform he advertises. You are being asked to swap a durable, cash-generative, mid-teens-ROIC housing compounder for $227 of cash plus a levered bet on a serial dealmaker’s execution. My framing is closed-special-situation, not value and not momentum: the building-products cyclical that BLD used to be has been overwritten by the package math. For a fundamental owner the rational move is to elect cash (it binds to ~45% via proration anyway) and not voluntarily hold the QXO shares unless you independently want to underwrite Jacobs at this price. There is no edge for a new buyer at $425 (you’d be buying ~$425 of value for $425, half of it in a stock you may not want), and it is not a short (the deal closes and the $600M fee + all-clear approvals cap any break). The valuation map: package ~$425 today (= today’s price); a deal-break tail re-rates toward a standalone ~$290–340 (9–11x EBITDA, −25% to −45%); QXO flat-to-down is the realistic risk on the 55% you can’t avoid if you hold past close. Conviction flips more cautious if QXO equity keeps sliding into the vote; it flips constructive on the QXO leg only if you become a true believer in the Jacobs roll-up — a different report than this one. Tag: “A great insulator, already sold — what’s left on the table is Brad Jacobs’ stock.”

📈 Stock Price Action — Five-Year Event Map

Factual price history, not a recommendation. Price moves are Fact; attributed drivers are Interpretation. No price target, no support/resistance levels.

Over the trailing five years TopBuild round-tripped from a COVID-recovery base, compounded with the housing cycle, peaked on its own fundamentals at an all-time-high $550.90 close (Feb 13, 2026), then was effectively frozen by a takeover. The stock bottomed near ~$142 (Nov 2022) in the rate shock and ran ~3.9x off that low. It now sits at $425.52 (Jun 26, 2026), roughly −23% off its February high, inside a 52-week range of ~$288 (May 2025) → $550.90. Critically, the last ten weeks are not a fundamental price — since mid-April BLD has been a closed-deal proxy pegged to the QXO acquisition package, not to housing.

Cycle narrative. Events 1–4 are a textbook rate-sensitive housing cyclical — boom, rate-shock halving, soft-landing recovery. Events 5–6 are the standalone peak and a pre-deal drawdown into the February all-time high. Event 7 is the deal pop toward the signing value. Event 8 is the critical, non-obvious one: BLD has fallen ~13% from the pop not on any TopBuild development but because the consideration is 55% QXO stock and QXO’s share price slid ~29%, mechanically re-pricing the package from $505 to ~$425. The price you see today is an arithmetic blend of $227.25 hard cash and a falling acquirer’s equity, not a market verdict on insulation.

1. Executive Summary

TopBuild Corp. is the largest installer of insulation and complementary building products in the United States and Canada (the Installation/TruTeam segment, ~59% of sales) and the largest pure specialty distributor of insulation and related products to contractors (the Specialty Distribution/Service Partners segment, ~41% of sales). Spun from Masco in 2015, it generated $5,409.1M of FY2025 revenue (+1.5% y/y), a 29.0% gross margin, a 14.6% operating margin, ~17.8% EBITDA margin, $521.7M of net income, and ~$697M of free cash flow on capital expenditure of only ~1.1% of sales. It is a high-quality, asset-light, cash-generative compounder with genuine mid-teens through-cycle ROIC and a real — if narrow — local-scale-and-density moat reinforced by purchasing scale across two channels.

But the investment question is no longer about insulation. On April 18, 2026, TopBuild signed a definitive agreement to be acquired by QXO, Inc., the building-products distribution roll-up controlled by Brad Jacobs (the dealmaker behind XPO/GXO/RXO). The consideration at signing was $505.00 per TopBuild share, electable as either $505.00 in cash or 20.200 shares of QXO common stock, subject to mandatory proration that fixes the aggregate mix at 45% cash / 55% stock (a blended $227.25 cash + 11.110 QXO shares). There is no collar on the fixed exchange ratio, so TopBuild holders bear QXO’s share-price risk on the stock portion. Shareholder votes (both companies) and the election deadline fall on June 29, 2026; HSR antitrust clearance was obtained May 26 and Canadian clearance May 28; QXO’s financing is fully committed with no financing condition; and a $600M reciprocal termination fee (~4.2% of the ~$14.3B nominal equity value) backstops the contract. Brad Jacobs’ vehicle (~19% of QXO’s votes) has signed a voting agreement for the QXO share-issuance vote.

The deal is, in all probability, closing. The cleanest evidence is the price: at $425.52, BLD trades fractionally through the current package value of ~$424.79 — the arbitrage spread is gone. The package has de-valued from the $505 signing value to ~$425 purely because QXO’s stock has fallen ~29% from the ~$25 level that made both elections worth $505 at signing. Consequently, a TopBuild holder today is effectively holding 45% cash plus 55% QXO equity at par, and the only economically meaningful question left is whether one wants to own QXO — because 55% of the consideration becomes QXO stock at close.

On that question the memo is skeptical. QXO trades on a Jacobs-track-record premium, not on current cash flow: trailing-twelve-month revenue of $8.56B but EBITDA of only ~$129M and a GAAP operating loss of ~−$458M, an enterprise value near $15.2B (~118x EV/EBITDA, 1.78x sales), and a stock whose realized volatility runs ~100%+ with a five-year maximum drawdown near −96%. QXO’s equity value is an option on Jacobs integrating Beacon Roofing (~$11B, 2025), Kodiak Building Partners (~$2.25B, Feb 2026), and TopBuild into the ~$2B-EBITDA platform he advertises. That is a fundamentally different risk than the durable housing-installer cash flows being acquired.

The standalone fundamentals still matter in two ways. First, they define the deal-break downside floor: TopBuild is being taken out at ~15x trailing / ~15.1x pro-forma EBITDA — the high end of its own history — so a (low-probability) break would re-rate the stock toward a standalone ~$290–340 (9–11x EBITDA on ~$960–1,000M EBITDA, net of ~$2.68B debt), roughly −25% to −45% from $425. Second, they are what QXO is buying: a mid-teens-ROIC franchise whose organic momentum has, however, turned sharply negative (Q1 2026 Installation organic volume −9.8%, pricing −2.9%; consolidated FY2025 volume −8.1%), with headline growth carried entirely by ~$1.94B of 2025 acquisitions and leverage taken to 2.77x. The body below details the business, the deal mechanics, the acquirer, and the scenarios; it takes no position and names no target outside Claude’s Take above.

2. Business Overview

What it does. TopBuild is the #1 installer of insulation and complementary building products and the largest specialty distributor of insulation and related accessories in the United States and Canada. Headquartered in Daytona Beach, Florida, spun off from Masco Corporation in July 2015 (NYSE: BLD), it employs ~14,707 people (6,744 of them insulation installers; only ~596 unionized). It reaches builders and contractors through a deliberately dual-channel model that distinguishes it from its #2 twin, Installed Building Products (IBP), which is overwhelmingly a pure installer. (FACT: FY2025 10-K, filed 2026-02-26, Item 1 / Human Capital.)

Two segments, and the split is structural:

• Installation Services (TruTeam) — ~59% of sales. $3,182.9M FY2025 net sales across >200 branches. Installs fiberglass batts/rolls, blown-in fiberglass, spray foam, and cellulose; commercial roofing (single-ply, built-up, metal); and complementary products (windows/glass, gutters, garage doors, shelving, fireplaces). Insulation plus roofing is ~74% of segment sales. Revenue is recognized over time on a cost-to-cost basis (residential contracts typically <90 days; commercial multi-quarter). Segment operating margin 18.5% in FY2025 (19.7% in FY2024). (FACT: FY2025 10-K MD&A / Note 8.)
• Specialty Distribution (Service Partners) — ~41% of sales. $2,523.3M net sales across >250 distribution centers in the U.S. and Canada. Distributes building and mechanical insulation, accessories, and gutters; insulation and accessories (fiberglass + spray foam) are ~88% of segment sales. It serves thousands of contractors of all sizes plus mechanical-insulation installers in oil & gas, LNG, data centers, food & beverage, and pharma/biotech. Revenue is recognized at a point in time on delivery. Segment operating margin 12.8% in FY2025 (15.1% in FY2024). (FACT: FY2025 10-K.)

Consolidated FY2025: net sales $5,409.1M (+1.5% y/y), gross margin 29.0% (30.5% prior), operating margin 14.6% (16.6% prior), EBITDA margin ~17.8%, net income $521.7M. Customer concentration is low: the top customer is 3.1% and the top 10 are 10.6% of revenue. End markets span residential new construction, multifamily, repair/remodel, and commercial/industrial new build plus maintenance/repair. (FACT: FY2025 10-K MD&A; ROIC.ai.)

The install-versus-distribute economics — the key distinction. Installation sells installed labor plus materials at an 18.5% operating margin on a largely variable, ramp-up/ramp-down cost base — crews are paid substantially on piecework, so the biggest cost flexes with volume. Distribution sells delivered product at a 12.8% margin: lower and more commodity-like, but it (a) adds purchasing scale that strengthens ties to the four fiberglass manufacturers and (b) is genuinely counter-cyclical — the 10-K notes that “during industry downturns many insulation contractors who buy directly from manufacturers during peaks return to purchasing through distributors.” That is a real demand offset IBP largely lacks. (FACT: FY2025 10-K.)

How it makes money. Gross profit is the spread between the installed/delivered price charged to the builder or contractor and TopBuild’s material and crew/logistics costs. The business converts that into industry-leading free cash flow because it is asset-light (capex ~1.1% of sales) and because acquisition-intangible amortization depresses GAAP earnings below cash generation. The decentralized branch model — acquired businesses keep local brands and management — preserves the local builder relationships and crew networks that are the actual asset, while head office supplies purchasing scale, capital, and pricing discipline.

Verdict. A focused, asset-light, U.S./Canada dual-channel franchise — #1 in installation and #1 in pure specialty distribution — whose distribution leg materially diversifies demand and purchasing scale while diluting (without eliminating) single-family cyclicality. It is larger and more diversified than IBP, with a lower blended margin precisely because ~41% of the mix is the lower-margin distribution channel.

3. Industry Dynamics

Structure — a duopoly-at-the-top over a fragmented tail, in both channels. TopBuild (#1) and IBP (#2) lead a market the 10-K itself describes as “highly fragmented and intensely competitive” with “relatively low barriers to entry.” Installation competes against national, regional, and local contractors on a per-bid basis; Distribution competes against specialty and broad-line distributors, big-box retailers, manufacturers, and mechanical fabricators. The two national leaders still hold only a minority of a large national market, so the consolidation runway is long — but the bar for a local competitor to enter a given metro is low. This is the most attractive structural feature: a stable, rational, two-firm national top tier consolidating a long fragmented tail rather than fighting a winner-take-all war. (FACT: FY2025 10-K, Items 1 and 1A; cross-read from prior published research on Installed Building Products (IBP), 2026-06-14.)

Demand driver — single-family starts, but non-deferrable. The prime mover is single-family housing starts, which insulation tracks closely because it is code-required and early-phase — it goes into essentially every new home, cannot be value-engineered out, and is installed before drywall. Single-family starts ran ~941k in 2025, roughly 17% below the 2021 peak (1,127k) and below the ~1.1–1.5M level implied by household formation — mid-trough, not peak, with mortgage rates around 6.5–7% gating affordability. This is exogenous and currently adverse: it drove TopBuild’s −8.1% consolidated volume in FY2025 and −9.8% Installation organic volume in Q1 2026. (FACT: FY2025 10-K; U.S. Census/NAHB via IBP cross-read — flagged for independent primary verification.)

Supplier oligopoly. TopBuild sources the majority of its fiberglass building products from four primary U.S. residential fiberglass manufacturers — CertainTeed, Johns Manville, Knauf, and Owens Corning — with no exclusivity. Material pricing is partly pass-through and partly contestable; the suppliers’ pricing power is the mirror of TopBuild’s, and the 10-K warns that the “fragmented and competitive nature” of the market may limit the ability to pass material-cost increases through. The same four-supplier concentration that gives TopBuild a contestable input also means a degree of shared pricing discipline at the manufacturing level. (FACT: FY2025 10-K.)

The energy-code tailwind has been rescinded. Both TopBuild and IBP long cited rising energy-code stringency (higher R-value requirements per home) as a structural content-growth tailwind. The prior IBP report documents HUD/USDA’s 2026 Joint Determination rescinding the 2021-IECC adoption mandate for FHA/USDA single-family housing in its entirety, removing — for now — that per-home content-growth lever. This is a genuine negative for the long-run organic story and is flagged as an OPEN QUESTION for independent primary verification. (INTERPRETATION, per IBP cross-read.)

Capital-cycle read (Marathon lens). Strategic capital has flooded building-products distribution over the past three years (Home Depot/SRS, QXO/Beacon, Lowe’s/Foundation) and is now entering installation (Lowe’s bought installer Artisan Design Group in 2025; QXO is buying TopBuild itself in 2026). Historically the labor-centric installation niche attracted no big-box entrant, which preserved a pricing umbrella for the two scaled leaders; that is now changing at the very top, which over time raises the cost of the tuck-in pipeline that fuels the roll-up. This is precisely the dynamic that produced a ~15x-EBITDA take-out for TopBuild — high returns and a long consolidation runway have attracted capital, exactly as the capital-cycle framework predicts. (INTERPRETATION; frameworks skill.)

Verdict: structurally GOOD-to-MIXED for the scaled leader — better than pure distribution, short of a true oligopoly. Non-deferrable code-required demand, a consolidated and rational top tier, the variable-cost installation model, and (until recently) limited big-box intrusion produced mid-teens through-cycle ROIC for the two leaders. The offsets are real and acknowledged in the filing itself: low local barriers to entry, a more contested distribution channel, the rescinded code tailwind, contestable material pass-through, and unavoidable single-family cyclicality.

4. Competitive Position

The moat, named (Greenwald taxonomy): local economies of scale + route density + purchasing scale + national-builder relationships, with a distribution-scale leg layered on. The 10-K’s own competitive-advantage list maps cleanly onto this: combined purchasing power across both segments; two avenues to reach builders (national consistency for large builders via Installation; local relationships for small contractors via Distribution); commercial/industrial diversification on a different cycle; strong locally-branded branches with long-tenured relationships; and a variable-cost model that can “ramp up rapidly … without major incremental investment.” (FACT: FY2025 10-K.)

The tests.

• Market-share-stability test: FAILS nationally, PASSES locally. National scale was assembled through serial M&A (DI in 2021, Progressive and SPI in 2025, dozens of tuck-ins) — a roll-up, not an organic, industry-wide barrier. But #1/#2 local positions persist on density and relationships, which is where the economics live. The advantage is local and must be re-won metro by metro; it is narrow, not wide.
• ROIC test: PASSES — but read it carefully. ROIC (per ROIC.ai) ran 13.0% (2021) → 17.2% (2022) → 16.8% (2023) → 16.4% (2024) → 12.7% (2025). The headline drop to 12.7% is largely an artifact: ~$1.94B of acquisitions closed mid- and late-2025 (Progressive 7/14, SPI 10/7), loading invested capital with goodwill and intangibles while contributing only partial-year earnings. On the full-year pro-forma basis (10-K Note 15: pro-forma net income $575.9M on $6,164.1M sales), and recognizing that the legacy installation/distribution base is capex-light and tangible-asset-light, the true cash ROIC of the underlying business remains mid-teens, comfortably above an ~8–10% WACC, every year including through the housing downturn. A genuinely barrier-free commodity business does not hold mid-teens ROIC across a multi-year starts decline. (FACT/INTERPRETATION: 10-K Note 15; ROIC.ai; see )

The bear’s case, fairly stated. The 10-K itself concedes “relatively low barriers to entry,” and installation is low-capital and contestable — a builder can re-bid, crews are hire-able, and a determined local competitor can enter a metro. The moat is local and must be continuously re-won; it is real but narrow, not a fortress. The rebuttal is empirical (mid-teens ROIC through the trough), so the truth sits in between: a durable-but-narrow local moat, strong where TopBuild has density and weaker where it does not.

Is the distribution segment a moat or a commodity bolt-on? Neither extreme. At a 12.8% operating margin against broad-line and big-box competition, Specialty Distribution is lower-moat on its own. But it is not a pure commodity add-on: it supplies the cross-segment purchasing scale that anchors supplier relationships and provides a documented counter-cyclical demand offset. Call it a genuine diversification/scale complement rather than a moat in its own right.

Versus IBP directly. TopBuild is ~1.8x IBP’s revenue ($5.4B vs $3.0B). Installation-only operating margin (18.5%) is comparable to IBP’s pure-installer economics, but BLD’s blended margin is lower (14.6% operating / 17.8% EBITDA versus IBP’s ~17.9% EBITDA) because ~41% of the mix is lower-margin distribution. IBP is the more focused, higher-margin pure-play #2; TopBuild is the larger, more channel- and end-market-diversified #1, with materially more commercial/industrial and mechanical-insulation exposure via DI/SPI/Progressive. The two coexist as a rational duopoly, not a share war — which is exactly why a financial/strategic acquirer (QXO) could pay a full multiple for #1 without fear of a price war destroying the asset.

Verdict: a durable but narrow local-scale/density/purchasing/relationship moat — not a wide moat. It is proven by mid-teens through-cycle ROIC (ex-acquisition drag) and widened on the diversification axis by the dual-channel model, but the filing’s own “low barriers to entry” admission caps the claim. This narrow-but-real franchise — not a fortress — is what QXO is paying ~15x EBITDA for, and it is the deal-break downside anchor.

5. Growth History and Forward Opportunities

Headline growth masks an organic contraction. FY2025 net sales rose just +1.5% to $5,409.1M, decomposed as +8.8% acquisitions, +0.8% price, −8.1% volume. By segment: Installation −3.4% (volume −11.2%, acquisitions +7.6%, price +0.2%); Distribution +7.8% (acquisitions +9.4%, price +1.4%, volume −3.0%). Every dollar of net growth was acquisition-funded; organic growth was negative — a sharper organic decline than IBP’s −5.7% same-branch in 2025. Q1 2026 confirmed the trend: consolidated sales +17.2% YoY but entirely M&A — Installation organic volume −9.8% and pricing −2.9% (only +16.9% from acquisitions); Specialty organic volume +0.3%. (FACT: FY2025 10-K MD&A; Q1 2026 10-Q.)

The M&A engine is large and strategic. FY2025 deployed ~$1,941.97M of cash on acquisitions (10-K Note 15):

• Progressive (commercial roofing / roof maintenance, Phoenix) — closed 7/14/2025, $818.2M, ~$442M goodwill, ~$216M annualized net sales; became its own reporting unit and opened a new commercial-roofing TAM with full-building-envelope cross-sell.
• SPI (mechanical-insulation specialty distributor/fabricator) — closed 10/7/2025, ~$1,010M, ~$426M goodwill; deepened mechanical-insulation distribution into oil & gas, LNG, data centers, and pharma. (Note: the SPI acquisition was first agreed and then mutually terminated in 2024 — costing a ~$23M termination fee — and re-struck on better terms later, a point of price discipline; see )
• Plus several tuck-ins (Diamond Doors ~$70M, Seal-Rite ~$23M, and others).

Pro-forma run-rate — “what QXO is buying.” As if Progressive and SPI had been owned for the full year, FY2025 net sales would have been ~$6,164.1M with net income ~$575.9M (10-K Note 15 pro forma) — the ~$6.2B revenue base the acquirer underwrites, versus the $5.4B reported.

Forward levers: (1) continued tuck-in roll-up of the fragmented tail; (2) commercial/industrial diversification — Progressive roofing plus SPI mechanical insulation as a “third leg,” partly non-cyclical maintenance/repair (mechanical insulation in extreme-temperature industrial settings must be serviced on schedule); (3) data-center/LNG/pharma mechanical-insulation MRO (recurring revenue); (4) full-building-envelope cross-sell; and (5) the eventual single-family-starts recovery — the single largest swing factor. The rescinded energy-code mandate subtracts a content-growth lever from this list.

Verdict: lower-quality current growth, high-quality engine. Organic volume is negative and 2025’s headline growth was 100% acquisition-funded into a starts trough — the same pattern as IBP but with a sharper 2025 organic decline. The compounding M&A-plus-diversification engine is genuine, large, and strategically sound (broadening into commercial roofing and mechanical insulation reduces single-family dependence). Growth quality inflects materially the moment starts recover; until then, value is being created through disciplined acquisition and channel diversification on a contracting organic base. For the deal, this matters mainly as the standalone case QXO is underwriting — and as a reminder that the take-out arrives with organic momentum at a cyclical low, which the ~15x multiple does not obviously reflect.

6. Financial Quality

Five-year trajectory. TopBuild is a genuinely high-quality, asset-light compounder that has now plateaued on the cycle. The post-COVID boom drove a step-change in scale and margin, with a FY2023–24 peak now easing as volume rolls over.

(FACT: FY2025 10-K; ROIC.ai, accessed 2026-06-26.)

The model throws off cash: capex is only ~1.1% of sales ($59.4M in FY2025), stock-based compensation is trivial (~0.3% of sales), and CFO/NI conversion runs above 1.2x in most years (1.45x in FY2025; the FY2022 dip to 0.89x was an inflation-era working-capital build that subsequently reversed). This is the financial signature of a real franchise, not a commodity contractor.

The ROIC “drop” is an artifact — confirmed. ROIC fell 16.4% → 12.7% in FY2025, but this is a denominator-matched timing distortion, not deterioration. The ~$1.94B of M&A that closed mid- and late-2025 loaded invested capital with goodwill/intangibles while contributing only ~5.5 months (Progressive) and ~2.8 months (SPI) of earnings. On the pro-forma full-year view (10-K Note 15: net income $575.9M on $6,164.1M sales), and given how light the legacy tangible-asset and capex base is, the underlying business still earns mid-teens cash ROIC, comfortably above WACC. The full-capital pro-forma figure (~12%) is depressed by paying full multiples for the 2025 deals (~$868M combined goodwill) — i.e., the marginal capital was deployed at full price, diluting blended returns, which is a capital-allocation observation rather than a deterioration in the core franchise.

Segment economics. Installation 59% of sales at 18.5% operating margin (from 19.7%); Specialty Distribution 41% at 12.8% (from 15.1%). Installation is the higher-return business; the FY2025 margin slip is volume-driven, partly offset by early-2025 cost actions. (FACT: 10-K Note 8.)

Quality-of-earnings flags (mostly clean):

• SPI posted a small FY2025 net loss driven by an ~$11.4M one-time inventory step-up (fully amortized in Q4) — normalize it out.
• FY2024 SG&A includes the ~$23.0M SPI deal-termination fee — one-time.
• Transaction costs of ~$29.6M (2025) and ~$26.7M (2024).
• GAAP EPS is depressed by intangible amortization on ~$827M of acquired customer relationships (13-year life); adjusted EPS runs above GAAP.
• Negative tangible book (~−$73/share): ~$3.0B goodwill + ~$1.35B intangibles against ~$2.32B equity — normal for a serial acquirer, not in itself a red flag.

Q1 2026 is the standalone tell. Sales +17.2% YoY but entirely M&A; Installation organic volume −9.8% and pricing −2.9%; operating margin compressed to 12.1% (from 14.4%); interest expense doubled to $36.6M on deal debt, pushing net income down ~15% to $104.8M. The core end-market is softening, and M&A is masking it. (FACT: Q1 2026 10-Q, filed 2026-05-05.)

Balance sheet. Net debt was taken from ~0.95x to 2.77x net-debt/EBITDA to fund 2025 M&A — elevated but within reason, well-laddered (notes due 2029/2032/2034), with ~9.3x interest coverage. No dividend has ever been paid.

Verdict: a high-quality, asset-light, cash-generative business with genuine mid-teens returns and real operating leverage in the up-cycle — but standalone organic momentum has turned negative, and FY2025/Q1-26 GAAP returns are muddied by acquisition timing and deal debt. Economics do improve with scale, but the marginal capital deployed in 2025 was bought at full multiples, diluting blended returns. As a deal-break floor, the underlying earnings power is robust; as a growth story, it is currently carried by acquisitions on a shrinking organic base.

7. Capital Allocation

M&A — the dominant use of cash, and disciplined. TopBuild is a serial consolidator: DI (2021, ~$1B), then in 2025 Progressive (~$818M, commercial-roofing platform) and SPI (~$1.0B, mechanical-insulation distribution) plus several tuck-ins, ~$1.94B total. The 2024 SPI deal was first terminated (costing a ~$23M fee) and then re-struck on better terms — concrete evidence of price discipline (they walked, then bought cheaper). Integration track record on prior deals is good. The multiples paid on these private assets (high-single-digit to low-double-digit EBITDA) are reasonable but not bargains.

Buybacks — sizeable but pro-cyclical (an important caveat that dents the reputation):

• 2022 program ($200M): 677,657 shares at ~$295 average (completed 2024).
• 2024 program ($1.0B): 2,685,478 shares at ~$372 average (completed Q1 2025).
• 2025 program ($1.0B): only ~$246M used; ~$754M remaining at year-end (paused as cash went to M&A).

Share count fell from ~33.0M to ~28.1M (~15%) over four years — real per-share accretion. But the heaviest repurchases (~$1B) were executed near $372 in 2024–early 2025, close to the cyclical highs, while the program slowed as the stock cheapened in mid-2025. That is the opposite of the “countercyclical buyback” reputation TopBuild sometimes carries: they bought most when the stock was dear and least when it was cheap. (FACT: 10-K; 2026 DEF 14A.)

Dividends: none, ever (confirmed).

Compensation / incentive alignment — weaker than the reputation suggests. The long-term incentive is cumulative adjusted EPS (50%) + relative TSR (50%) — there is no explicit ROIC/return-on-capital hurdle. The annual bonus uses adjusted operating-income margin (30%), operating income (30%), net sales (20%), working-capital % of sales (10%), and safety (10%). So ROIC discipline is cultural/historical, not contractually enforced — and an EPS-and-TSR LTI actively rewards leveraged M&A and buybacks regardless of the return on incremental capital. FY2023–25 PRSUs vested at maximum 200% (EPS well above target; TSR top-quartile), and the CEO collected a ~$13.7M LTI payout in February 2026. Insider ownership is thin: CEO Robert Buck ~40,372 shares (<1%); all 12 directors/officers combined ~134,110 shares (<1%). (FACT: 2026 DEF 14A, filed 2026-03-17.)

Insider transactions — no buying signal, ever. The entire trailing five-year Form 4 corpus is routine grants (code A) and sales (code S) at prices from ~$285 to ~$545 — e.g., CEO Buck sold 7,350 shares at ~$415 in August 2025. There are zero open-market purchases (code P) anywhere in the five-year window — no conviction-buy at any price. Post-announcement Form 4s are scheduled equity grants, not discretionary buys (and officers are blacked out from open-market trading during the deal anyway, so the absence of post-announcement buying is uninformative; the absence across the prior five years is the signal). (FACT: EDGAR Form 4 corpus.)

Verdict: above-average but not elite — and the reputation is partly overstated. M&A is disciplined (they walked from SPI once) and the business is cash-rich, but buybacks were pro-cyclical, the comp plan lacks an ROIC governor, and insider ownership is minimal with no open-market buying. These are good operators; the “best-in-class capital allocator” label deserves a haircut. For the deal, this is moot prospectively — but it colors how one reads the standalone case QXO is buying and the alignment that produced a top-of-cycle sale.

8. Changes and Headwinds — Last Two Years

The dominant change is, of course, the QXO acquisition (detailed in ). Beyond it:

• Two transformational 2025 acquisitions (Progressive, SPI) re-shaped the portfolio toward commercial roofing and mechanical-insulation distribution and took leverage from ~0.95x to 2.77x. These broaden the end-market base but also mean a large slug of capital was deployed at full multiples just before the company itself was sold.
• Organic demand rolled over. Single-family starts ~17% below the 2021 peak drove consolidated volume −8.1% in FY2025 and Installation organic volume −9.8% in Q1 2026, with Installation pricing turning negative (−2.9%) in Q1 2026 — the first sign of price erosion, not just volume softness.
• Margin compression. Consolidated operating margin fell 16.6% → 14.6% (FY24 → FY25) and to 12.1% in Q1 2026; both segment margins declined. Incremental margins have turned unfavorable as fixed branch/DC overhead deleverages on lower volume.
• The energy-code content tailwind was rescinded (HUD/USDA 2026), removing a long-cited per-home growth lever (verify independently).
• Big-box/strategic capital entered the installation channel (Lowe’s/Artisan Design Group 2025; QXO/TopBuild 2026), changing the competitive and capital-cycle backdrop for the roll-up model.
• Leadership/board: routine; no destabilizing turnover. The merger will, of course, eliminate TopBuild’s independent existence.
• Litigation: ordinary-course, plus the routine disclosure-related stockholder complaint and demand letters typical of a public-company merger (the company supplemented the proxy voluntarily to moot them; no material impediment).

Verdict: the last two years strengthened the strategic footprint (diversification) while weakening the near-term operating picture (negative organic volume, price erosion, margin compression, higher leverage) — and culminated in a top-of-cycle sale. Net, the changes are why the stock is where it is: a good business whose organic momentum is at a low, being acquired at a peak multiple.

9. Risk Analysis (Risk Matrix)

Because BLD is a near-closed merger, the risk profile is dominated by deal-specific risks, with the standalone business risks relevant mainly to the deal-break tail and the acquirer.

The defining risk is #1: a holder who does nothing receives 55% of value in a volatile, falling acquirer stock with no downside protection. Risk #2 (break) is low-probability but would be a sharp, large drawdown because the take-out multiple is at a cyclical-and-historical peak.

10. Valuation Discussion (Embedded Expectations)

This is a special-situation valuation, not a DCF. The market has already collapsed BLD to its deal-package value, so the work is deal mechanics, the deal-break floor, and the acquirer’s worth.

(a) The arb math. The current package = 0.45 × $505.00 + 0.55 × (20.200 × $17.78) = $227.25 cash + $197.55 stock = $424.79, versus BLD at $425.52 — a spread of −0.17% (BLD trades fractionally through the package). Into a ~3-day close (vote/election deadline 6/29; HSR cleared 5/26; Canada cleared 5/28; financing committed; $600M reciprocal fee), the market is pricing effectively 100% close probability with no arbitrage profit remaining. A buyer at $425 is not making an arb bet; they are choosing to receive $227.25 cash + 11.110 QXO shares.

(b) Is QXO paying a full price? Yes — relative to TopBuild’s own history. The deal enterprise value is ~$14.85B, or roughly 15x trailing / ~15.1x pro-forma EBITDA (~16x at the $505 signing print). On its own, BLD trades at EV ~$12.7B / ~13x trailing EBITDA (~$979M) at $425 — so QXO captured ~2–3 EBITDA turns of premium. The TopBuild board itself characterized the ~15.1x CY2025 adjusted-EBITDA multiple as “a substantial multiple … at the high end of precedent transactions” and “difficult to achieve in the public equity markets,” against a peer set that has traded around 10.7x median since 2022. (Correction to a stale internal figure: the IBP “twin” currently trades at ~15.1x EV/EBITDA, not the ~12x cited in some earlier work — so ~15x is where the installer/distributor model trades in today’s market; QXO’s price is full versus BLD’s own ~13x standalone, but roughly in line with the current comp.)

© Standalone deal-break downside (independent estimate). Normalized EBITDA ~$960–1,000M × a 9–11x sector multiple, less net debt ~$2.68B, ÷ ~28.3M shares:

A deal break implies roughly −25% to −45% from $425. Break risk is low (all approvals in, committed financing), so the holder’s economic value is dominated by the QXO leg, not the deal-break floor — but the floor is real and large because the take-out multiple already sits at a peak.

(d) The QXO-leg question — should a BLD holder want QXO? QXO TTM: revenue $8.56B, EBITDA only ~$129M, EBIT negative ~−$458M, EV ~$15.2B → ~118x EV/EBITDA, 1.78x sales; ~$3.0B cash against ~$3.9B debt and ~$1.06B preferred. There is essentially no current-earnings anchor; QXO’s equity value is an option on Brad Jacobs integrating Beacon ($11B, 2025) + Kodiak ($2.25B, 2026) + TopBuild into the ~$2B-EBITDA platform he advertises. That is a different risk than the durable, cash-generative housing-installer being acquired. A holder seeking housing-cyclical exposure does not automatically want a ~100%±vol, sub-scale, pre-profit roll-up — which is the central post-close decision and a legitimate reason to elect cash or to sell the QXO shares on receipt. Pro forma, TopBuild holders end with ~30% of QXO (~23% of votes); Morgan Stanley’s accretion analysis showed only a ~+4.7% equity-value uplift to existing QXO holders, underscoring how much of the value rests on future synergies rather than today’s numbers.

(e) Total-outcome scenarios for a holder today (~$425.52):

Embedded expectations: at $425.52 the market underwrites the deal closing and QXO roughly flat. The genuine variant question is not the arbitrage (dead) but whether to retain QXO equity — the value of which rests entirely on roll-up execution, not on the building-products cash flows being acquired. (No price target; no BUY/SELL — see Claude’s Take.)

11. Variant Perception

Consensus belief. The deal closes around June 29, 2026 at the stated terms; BLD is a closed-end arb pegged to the QXO package; there is nothing left to do. This is essentially correct on the mechanics — and the price proves the market agrees (zero spread).

The strongest bull case (for holding through close). You believe in Brad Jacobs. QXO assembled XPO/GXO/RXO into enormous value creation; the building-products distribution thesis (a fragmented, ~$800B+ TAM ripe for a tech-enabled consolidator) is credible; Beacon + Kodiak + TopBuild gives QXO a ~$25B+ revenue platform with a stated path toward ~$2B EBITDA; and QXO’s stock, down ~29% since signing and ~96% off its peak, is a depressed entry into that option. If Jacobs executes, the 55% QXO leg is where the upside is, and taking cash forfeits it.

The strongest bear case (the memo’s lean on the QXO leg). QXO is pre-profit, ~100%±vol, and trades at ~118x EV/EBITDA on synergies that do not yet exist; the no-collar structure has already cost BLD holders ~$80/share of consideration (from $505 to $425) with no floor; integration of three large acquisitions simultaneously is hard; and a fundamental investor who owned BLD for durable insulation cash flows is being involuntarily converted into a momentum/roll-up bet. The rational response is to bank the $505-value cash leg and not voluntarily hold QXO.

The 3–5 assumptions that matter most:

1. The deal closes on schedule (near-certain given approvals/financing/fee).
2. QXO’s share price between now and close determines ~55% of realized value — and it has no floor.
3. QXO’s ability to integrate Beacon + Kodiak + TopBuild into ~$2B EBITDA (entirely future, entirely execution-dependent).
4. The standalone deal-break floor (~$290–340) bounds the downside only in the low-probability break case.
5. Whether the holder’s mandate even permits/wants owning a speculative roll-up equity.

Factor-positioning read (what the tape is pricing). Pre-deal, BLD’s factor identity was a leveraged, rate-sensitive small/mid-cap housing cyclical (Home-Construction +1.62, Market +1.25, SmallSize +0.95, InterestRate −0.69; beta 1.26). Since mid-April that identity has been overwritten — realized vol and alpha are now merger-peg artifacts; the model is describing a frozen arb, not a housing stock. QXO, by contrast, moves almost entirely on stock-specific news (market R² ~0.05), with extreme realized volatility (y5 vol ~98%, max drawdown ~−96%) and deeply negative relative strength — a deeply out-of-favor, blow-up-prone roll-up. The tape is pricing exactly what the mechanics imply: a closed deal pegged to a falling, high-volatility acquirer’s stock. Consensus is not offsides on the deal; the only place it could be offsides is on QXO itself, in either direction. (FactorsToday, accessed 2026-06-25/26.)

12. Fact vs. Interpretation Table

13. Open Questions

1. Precise pro-forma adjusted EBITDA behind the 15.1x (back-solves to ~$1.12B vs ~$961M reported) — confirm the full-year Progressive+SPI build directly from the merger proxy’s projections.
2. QXO’s true normalized/run-rate EBITDA post-Beacon/Kodiak and the credibility of the ~$2B target — the entire QXO-leg value rests here.
3. Independent verification of the HUD/USDA energy-code rescission and its quantified content-growth impact.
4. Exact post-close pro-forma leverage at QXO (new term loan + notes + assumed/refinanced TopBuild notes) and the resulting interest burden.
5. Election/proration outcome — what fraction of holders elect cash and whether any odd-lot or no-election dynamics shift the realized mix (economically immaterial, but operationally relevant).
6. Whether any competing bid or topping offer is even theoretically possible at this late stage (no go-shop; single-bidder background; $600M fee) — effectively no.

14. What Must Be True (Bull and Bear)

Bull (hold through close / want the QXO leg) — what must be true:

• The deal closes at terms (near-certain). Falsification test: either shareholder vote fails on 6/29, or a financing/MAC/regulatory snag emerges — none of which is currently visible. If the deal closes, this leg is confirmed.
• QXO equity holds or appreciates into and after close, and Jacobs integrates Beacon+Kodiak+TopBuild toward ~$2B EBITDA. Falsification test: QXO fails to show a credible path to positive, growing EBITDA within 12–18 months of close, or its stock makes new lows — which would prove the 55% leg destroyed value relative to taking cash.

Bear (take the cash / don’t reach for QXO) — what must be true:

• The cash leg ($227.25, part of a $505-equivalent election) is worth banking, and the QXO leg is an unattractive, unprotected bet for a fundamental owner. Falsification test: QXO meaningfully re-rates upward post-close (e.g., +30–50% as synergies prove out), making cash-election holders demonstrably worse off than stock holders — which would refute the “take the cash” call.
• The take-out multiple (~15x) already reflects peak value, so there is no residual upside in the building-products cash flows themselves. Falsification test: a standalone re-rating above ~15x EBITDA in a deal-break world (e.g., a competing strategic bid) — not visible, and structurally foreclosed by the no-go-shop, $600M-fee contract.

The asymmetry: the deal-closing leg is near-certain; the genuine open question is the QXO equity, where the memo’s lean (don’t voluntarily hold it) is falsified only by Jacobs delivering — a real possibility, but not one a disciplined fundamental process should underwrite at ~118x EV/EBITDA on faith.

15. Source Appendix

See the separate Source Appendix (Appendix B in the combined report) for the full citation list. Primary sources: TopBuild DEFM14A / joint proxy statement–prospectus (filed 2026-05-29); TopBuild merger-related 8-Ks (2026-04 through 2026-06); TopBuild FY2025 Form 10-K (filed 2026-02-26); TopBuild Q1 2026 Form 10-Q (filed 2026-05-05); TopBuild 2026 DEF 14A (filed 2026-03-17); EDGAR Form 4 corpus; QXO public filings and TTM financials (ROIC.ai); AZI price history (BLD, QXO; 2026-06-26); FactorsToday factor model (2026-06-25/26); and cross-read of prior published research on Installed Building Products (IBP) (2026-06-14). Every non-obvious fact in the memo is cited inline with source and date; management commentary is treated as hypothesis and validated against filings and external data.

APPENDIX A — Standard Diligence Questionnaire

TopBuild Corp. (NYSE: BLD) — as of 2026-06-26. Answers are grounded in primary filings; Fact/Interpretation/Assumption labeled where it matters. Context: BLD is being acquired by QXO, Inc. (definitive agreement 2026-04-18; votes/election deadline 2026-06-29), so several answers are framed through the merger.

General

What thoughtful questions have other investors asked about this company? At this stage the questions are merger-specific: (1) Will the deal close on June 29 and is there any residual spread? (Answer: yes/near-certain; spread ~0.) (2) Cash or stock election — and does it matter? (Economically the same after proration; cash election is “better” only because the cash leg is worth more than the stock leg at today’s QXO price, so proration binds everyone to ~45%/55%.) (3) Do I want to own QXO? — the only live question, since 55% of consideration becomes QXO stock. Pre-deal, the durable questions were about organic-volume softness, the sustainability of peak margins, the rescinded energy-code tailwind, and whether the M&A roll-up creates or destroys value.

Cyclicality & Earnings Nature

Are earnings at a cyclical high or low? Margins are off their FY2023–24 peak but earnings are not at a trough — single-family starts are ~17% below the 2021 peak (mid-trough), and TopBuild’s operating margin has eased from 16.6% (FY24) to 14.6% (FY25) to 12.1% (Q1-26). So this is a high-quality business at a mid-cycle, softening point, sold at a peak multiple (~15x EBITDA). (Interpretation.)

Driven by external environment or internal actions? Both. Revenue is gated externally by housing starts/rates; margins reflect internal cost discipline (early-2025 actions) partly offsetting volume deleverage. Recent growth is internally driven (M&A) against an externally driven organic decline.

How stable are revenues? Moderately cyclical but dampened: non-deferrable code-required insulation demand, low customer concentration (top-10 = 10.6%), and a counter-cyclical Specialty Distribution leg. Organic volume nonetheless fell −8.1% (FY25) and Installation −9.8% (Q1-26).

Outlook for products/services? Insulation demand recovers with single-family starts; commercial roofing (Progressive) and mechanical insulation (SPI) add longer-cycle, partly non-residential, partly MRO demand.

How big will this market be — growing, shrinking, domestic or international? U.S./Canada residential + commercial insulation and specialty distribution — a large, fragmented, slow-growth-plus-cycle market with a long consolidation runway for the two scaled leaders. Domestic.

Business Quality & Competitive Moat

Is the industry getting more or less competitive? More, at the top: big-box/strategic capital has entered distribution (Home Depot/SRS, QXO/Beacon) and now installation (Lowe’s/Artisan, QXO/TopBuild). Local barriers remain low (the 10-K’s own words).

How profitable is the business (ROIC, ROE)? Mid-teens through-cycle ROIC (12.7% reported in 2025 is an acquisition-timing artifact; pro-forma underlying is mid-teens), ROE 16% (2025, down from 30%+ as equity grew and leverage normalized). Above WACC every year.

How profitable is the industry — competitors, barriers? Two scaled leaders earn mid-teens ROIC; the fragmented tail earns less. Barriers are local (density, relationships, purchasing scale), not structural — narrow, not wide.

Can the business be easily understood? Yes — install/distribute insulation; the only complexity now is the merger structure and the acquirer.

Can it be undermined by foreign low-cost labor? No — installation is local, on-site, code-inspected labor; not offshorable.

Do brands matter? Locally, yes (acquired branch brands carry builder relationships); nationally, less so. The “brand” is reliability/scale to national builders.

Nature of competition? Per-bid for installation; price/availability/service for distribution. Rational duopoly at the top.

Customers’ switching costs? Low per project (re-biddable), but relationship/reliability and local density create stickiness in practice.

Financial Condition & Balance Sheet

Assets not fully recognized on the balance sheet? The local branch networks, builder relationships, and crew bases are the real assets, carried largely as goodwill/intangibles ($3.0B goodwill + $1.35B intangibles). Tangible book is negative (~−$73/share), normal for a serial acquirer.

Off-balance-sheet liabilities? Operating leases (branches/DCs/fleet) — standard; no unusual exposures flagged.

How conservative is the accounting? Reasonably clean. GAAP EPS is understated by intangible amortization. One-time items (SPI inventory step-up ~$11.4M; 2024 ~$23M termination fee; ~$29.6M 2025 deal costs) are clearly disclosed.

How CapEx-hungry? Very light — capex ~1.1% of sales ($59.4M FY25). Asset-light, high-FCF-conversion model.

Capital Allocation & Management

How much FCF, and how is it used? ~$697M FCF (FY25). Used for M&A (~$1.94B in 2025) and buybacks (~$246M in 2025, ~$1B in 2024). No dividend, ever.

Significant acquisitions recently? Yes — Progressive ($818M, commercial roofing, 7/2025) and SPI ($1.0B, mechanical-insulation distribution, 10/2025), plus tuck-ins.

Buying back shares? Yes, but pro-cyclically — heaviest repurchases (~$372 avg) near the cyclical highs; share count −15% over four years.

Issuing large amounts of stock to insiders? No — SBC is ~0.3% of sales; insider ownership <1% in aggregate.

Compensation policy? LTI = adjusted EPS (50%) + relative TSR (50%) — no ROIC hurdle; annual bonus on op-margin/op-income/sales/working-capital/safety. PRSUs vested at max 200% for FY23-25. CEO ~$13.7M LTI payout Feb 2026.

Motivations of management? Aligned to EPS/TSR growth (which rewards leveraged M&A and buybacks), not explicitly to return on capital. The sale to QXO crystallizes a top-of-cycle price for shareholders and accelerates equity-award vesting for management.

Valuation & Market Data

ADR, MLP, or K-1 issuer? No — ordinary U.S. C-corp common stock (NYSE: BLD). Note the merger consideration includes QXO common stock (also ordinary C-corp shares), so no K-1/MLP complexity arises.

Dividend policy? None — no dividend has ever been paid.

How profitable is the business? High-quality: ~17.8% EBITDA margin, mid-teens ROIC, ~13% FCF margin on an asset-light base.

Is net income diverging from cash from operations? CFO exceeds NI (1.45x in FY25) — healthy, driven by intangible amortization (non-cash) above net income.

Risks & Downside

What would cause the stock to decline? (1) QXO equity falling further (you hold 55% QXO) — the dominant live risk; (2) the deal breaking (low probability) → re-rate to standalone ~$290–340; (3) in a break world, a deeper housing downturn.

Risk of catastrophic loss? Very low — asset-light, cash-generative, modest leverage (2.77x), laddered maturities, no existential single-point risk.

Chance of total loss? Negligible at the BLD level. The only path to large relative loss is electing/holding QXO and QXO subsequently collapsing — a real but not total-loss scenario.

Recent News & Events

Has the business environment changed recently? Decisively — the April 18, 2026 definitive merger agreement with QXO dominates everything. Operationally, organic volume turned more negative and Installation pricing went negative (−2.9%) in Q1-26.

Significant acquisitions? TopBuild as acquirer: Progressive and SPI (2025). TopBuild as target: QXO (2026).

Change in accounting policies? None material.

Recent changes — new markets, facilities, management? New commercial-roofing (Progressive) and mechanical-insulation (SPI) platforms; leverage to 2.77x; otherwise stable management pending the QXO close.

APPENDIX B — Source Appendix

TopBuild Corp. (NYSE: BLD). Report date 2026-06-26. Primary sources first; management commentary treated as hypothesis and validated against filings and external data. All URLs accessed 2026-06-26.

Primary — SEC filings (TopBuild, CIK 0001633931)

1. Definitive Joint Proxy Statement / Prospectus (DEFM14A / 424B3) — filed 2026-05-29. Deal terms ($505.00 cash election / 20.200 QXO shares; 45%/55% proration; no collar; $600M termination fee), conditions, regulatory status, financing, fairness opinions (Goldman Sachs + RBC for TopBuild; Morgan Stanley for QXO), background of the mergers, projections. https://www.sec.gov/Archives/edgar/data/1633931/000110465926068303/tm2612250-7_defm14a.htm
2. Form 8-K — 2026-06-22 (supplemental proxy disclosures; recital of merger structure, special meetings 2026-06-29, board recommendation). https://www.sec.gov/Archives/edgar/data/1633931/000110465926076063/bld-20260622x8k.htm
3. Form 8-K — 2026-06-04 (election deadline 5:00pm ET 2026-06-29; joint press release). https://www.sec.gov/Archives/edgar/data/1633931/000110465926070561/bld-20260604x8k.htm
4. Form 8-K — 2026-05-29, 2026-05-18, 2026-05-14, 2026-05-11 and related 425 communications (S-4 effectiveness, note tender offers/consent solicitations, supplemental indentures). EDGAR filing index: https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001633931&type=&dateb=&owner=include&count=40
5. Form 10-Q — Q1 2026, filed 2026-05-05 (organic volume −9.8% Installation; pricing −2.9%; op margin 12.1%; interest expense $36.6M; net income $104.8M). https://www.sec.gov/Archives/edgar/data/1633931/000110465926055233/bld-20260331x10q.htm
6. Form 10-K — FY2025, filed 2026-02-26 (segments, FY2025 net sales $5,409.1M, margins, EBITDA, FCF, acquisitions Note 15, pro-forma $6,164.1M sales / $575.9M NI, customer concentration, competitive description, supplier oligopoly, leverage). Mirrored locally at output/BLD/sources/10-K/.
7. DEF 14A (2026 proxy) — filed 2026-03-17 (compensation structure: LTI = adjusted EPS 50% + relative TSR 50%, no ROIC hurdle; annual bonus metrics; PRSU 200% vesting; insider ownership <1%; CEO LTI payout).
8. Form 4 corpus (trailing 5 years) — EDGAR ownership filings; reviewed for insider-transaction signal (routine grants/sales only; zero open-market purchases). https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001633931&type=4

Primary — QXO, Inc. (acquirer)

9. QXO public filings & TTM financials (revenue $8.56B; EBITDA ~$129M; EBIT ~−$458M; EV ~$15.2B; cash/debt/preferred), via ROIC.ai aggregation reconciled to QXO’s filings; QXO investor site https://investors.qxo.com. QXO 2026 DEF 14A filed 2026-03-24.
10. QXO senior notes offering (2026-06-04) and committed term loan / bridge financing for the TopBuild acquisition (described in the DEFM14A “Financing” section and QXO 8-Ks).

Quantitative data services

11. ROIC.ai — multi-year income statement, balance sheet, cash flow, profitability ratios (ROIC trail 2021–2025), enterprise value and valuation multiples for BLD, QXO, and IBP (comp). Third-party aggregated; reconciled to filings.
12. AZI price history — BLD and QXO daily OHLCV (adjusted), EMAs, beta; closes 2026-06-26 (BLD $425.52; QXO $17.78). Source for the package-value computation and the five-year event map.
13. AZI valuation_index — BLD own-history percentile ranks (composite 75.6th; P/E 74.8th; P/B 81.3th; P/S 70.6th), 2026-06-25 (caveated as distorted by the merger peg).
14. FactorsToday factor model — BLD and QXO stock-loadings, leaderboard (returns/vol/drawdown/Sharpe by horizon), stock-info (beta/alpha/relative strength). Accessed 2026-06-25/26.

Industry / cross-read

15. Prior research — Installed Building Products (IBP), report dated 2026-06-14 (direct twin; industry structure, single-family-starts data, energy-code rescission, duopoly-at-top framing, comp multiples).
16. Prior research — Builders FirstSource (BLDR), 2026-06-14 (building-products distribution / housing-cycle backdrop).
17. U.S. Census Bureau / NAHB single-family housing starts (~941k 2025 vs 1,127k 2021 peak) — referenced via IBP cross-read; flagged for independent primary verification.
18. Trade press on the QXO–TopBuild transaction (e.g., reporting of the ~$17B deal value, April 2026 announcement).

Notes on method

• Every non-obvious fact in the memo is cited inline with source and date.
• Management commentary (earnings calls, press releases) was treated as hypothesis and validated against filings and external data.
• ROIC.ai, AZI, and FactorsToday are third-party aggregated/estimated data — used for acceleration and cross-check; for US-filer primary facts, EDGAR and the 10-K/10-Q/DEFM14A govern, and any discrepancy resolves to the filing.