GMS Inc (GMS)
Return on equity (ROE)
| Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income (ttm) | US$ in thousands | 115,469 | 145,762 | 219,076 | 246,497 | 276,079 | 295,285 | 308,155 | 330,351 | 332,991 | 333,894 | 330,502 | 301,710 | 273,442 | 230,692 | 185,435 | 139,543 | 105,560 | 30,358 | 25,111 | 25,780 |
| Total stockholders’ equity | US$ in thousands | 1,420,180 | 1,393,610 | 1,469,310 | 1,470,300 | 1,460,520 | 1,418,940 | 1,375,880 | 1,354,810 | 1,274,760 | 1,230,700 | 1,183,940 | 1,139,220 | 1,064,500 | 1,003,280 | 951,351 | 877,243 | 822,462 | 761,014 | 717,897 | 681,871 |
| ROE | 8.13% | 10.46% | 14.91% | 16.77% | 18.90% | 20.81% | 22.40% | 24.38% | 26.12% | 27.13% | 27.92% | 26.48% | 25.69% | 22.99% | 19.49% | 15.91% | 12.83% | 3.99% | 3.50% | 3.78% |
April 30, 2025 calculation
ROE = Net income (ttm) ÷ Total stockholders’ equity
= $115,469K ÷ $1,420,180K
= 8.13%
The analysis of GMS Inc.'s return on equity (ROE) over the period from July 2020 to April 2025 reveals notable fluctuations and a discernible downward trend in profitability relative to shareholders’ equity.
Initially, during the second half of 2020, the company's ROE was modest, around 3.78% in July 2020, decreasing slightly to 3.50% by October 2020. This period likely reflected subdued profitability amidst broader economic uncertainties. Starting from January 2021, there was a gradual improvement, with ROE climbing to 3.99%, but the most significant increase occurred after April 2021, where ROE surged sharply to 12.83%. This marked the beginning of a rapid upward trajectory, with subsequent quarters showing continuous growth until reaching a peak of approximately 27.92% in October 2022.
This substantial increase indicates a period of enhanced operational efficiency, improved profit margins, or both, which significantly boosted shareholders’ returns. The peak in late 2022 aligns with an improvement phase possibly driven by favorable market conditions, strategic initiatives, or cost management.
However, the subsequent quarters display a consistent decline in ROE. By January 2023, ROE slightly dipped to 27.13%, and the downward trend persisted through the following periods. By October 2024, the ROE declined further to 14.91%, and by January 2025, it decreased to 10.46%. The latest data points in April and July 2025 show the continued erosion, with ROE at 8.13% and 16.77%, respectively, approaching minimal levels comparable to the early years.
Overall, GMS Inc.'s ROE profile indicates a period of rapid growth and high profitability in late 2021 to 2022, followed by a sustained decline over the subsequent periods. This trend suggests that the company experienced a phase of operational or market-driven success that was not maintained, leading to decreased relative returns on shareholders’ equity in recent years.