Why GMS Stock Is Soaring Today

Home Depot has agreed to acquire GMS (NYSE: GMS) for $5.5 billion, heading off a potential bidding war for the target with a sweetened bid.

GMS investors have reason to celebrate, with the stock up 12% on the news.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Image source: Getty Images.

A big premium secured

GMS was an under-the-radar construction products distributor until last week, when the company received an unsolicited offer from QXO valuing GMS at $95.20 per share. Soon after the bid was made public there were media reports suggesting that Home Depot was also interested, but few details about that potential offer.

Home Depot apparently made its intentions clear over the weekend. On Monday, the home improvement retail giant announced it had reached a deal to acquire GMS for $110 per share. The deal, which will be done through Home Depot's SRS Distribution subsidiary, offers a premium of 36% over GMS' trading price on June 18.

Home Depot said the combination would provide professional contractors with more fulfillment and service options, creating a network of more than 1,200 locations and a fleet of more than 8,000 delivery trucks.

Is GMS stock a buy?

GMS shares are trading at just below the $110-per-share offer, implying the markets are not expecting QXO to try to swoop in with a higher offer to disrupt that deal. Given the premium price, that assumption is likely to be correct.

The construction distribution consolidation story is far from over, but GMS' chapter is likely complete. There is little reason for investors to buy in following the acquisition announcement.

Should you invest $1,000 in Gms right now?

Before you buy stock in Gms, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Gms wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $966,931!*

Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 30, 2025

Lou Whiteman has positions in Home Depot and QXO. The Motley Fool has positions in and recommends Home Depot. The Motley Fool has a disclosure policy.