Jim Cramer highlighted the widening effects of the housing slowdown on building-related companies while discussing QXO, Inc. (NYSE:QXO) and Toll Brothers, Inc. (NYSE:TOL) during the September 29 and September 30 episodes of Mad Money. His comments pointed to different forms of housing exposure, with QXO facing weaker demand for building products while Toll Brothers has less exposure to mortgage financing.
Cramer recently explained why he still hesitates to bet against QXO despite the stock’s struggles. See what he said differentiates QXO from Home Depot.
QXO Has Expanded Rapidly But Remains Loss-Making
During the September 29 lightning round, Cramer said, “I can’t go against Brad. He’s been too successful, but man, it has been [a dog].” On September 30, He described QXO, Inc. as an amalgamation of Beacon Roofing Supply, Kodiak Building Partners and TopBuild. The company reported $3.25 billion in second-quarter revenue, including $595 million from Kodiak, while net loss was $55 million. Adjusted EBITDA was $272 million, with the margin falling to 8.4% from 10.7% a year earlier.
CEO Brad Jacobs said the results reflected “current market conditions” while reiterating the company’s plan to more than double EBITDA by 2030 and reach $50 billion in revenue within the decade. It is worth noting that Cramer said “you should own” the stock in the August 26 episode of Mad Money.
Toll Brothers Faces Margin And Volume Pressure
On September 30, Cramer said, “Hey, look, the home builders themselves are doing very poorly.” He went on to say:
Toll Brothers is only down 0.35%. That’s because about 25% of their buyers pay cash. Toll is the rich man’s home builder so the customers have less sensitivity to mortgage rates.
Toll Brothers, Inc.’s latest results show that housing weakness is already affecting profitability despite higher net signed contracts. Third-quarter home sales revenue fell about 8% year-over-year to $2.65 billion, deliveries declined 10% to 2,662 homes, and net income dropped 24% to $280.1 million, while adjusted home sales gross margin contracted 190 basis points to 25.6%. SG&A also increased to 10% of home sales revenue from 8.8%, putting additional pressure on operating margins. Backlog value fell to $6.24 billion from $6.38 billion a year earlier, while backlog homes declined to 5,312 from 5,492.
QXO Faces Greater Balance Sheet And Integration Risk
QXO, Inc.’s housing exposure comes alongside the challenges of integrating several large acquisitions and carrying significantly more debt. QXO recorded a $42 million operating loss and $38 million in net interest expense in the second quarter, while long-term debt had risen to $6.03 billion by June 30 from $3.06 billion at the end of 2025. The scale of the TopBuild acquisition also increases the importance of integrating the combined business while QXO works toward its longer-term EBITDA target.
QXO Trades Above Its Industry While Toll Brothers Trades Below
As of September 23, QXO, Inc. traded at approximately 19.2x forward earnings, according to Yahoo Finance, versus 17.7x for U.S. construction supplies in the January 2026 NYU Stern industry dataset. Toll Brothers, Inc. traded at approximately 10.0x forward earnings versus 14.4x for U.S. homebuilders. QXO’s higher multiple comes despite its current GAAP loss, while Toll Brothers’ lower multiple comes as revenue, deliveries and margins have declined. Click here to find out why we wrote TOL has a multiple that seems to price in little of the growth story management is still pointing to.
Hedge Funds Increased QXO Exposure
Insider Monkey’s data, tracking more than 1,000 hedge funds, showed that the number holding QXO increased to 83 in the second quarter from 65 in the first quarter. Meanwhile, Toll Brothers moved in the opposite direction, with hedge-fund holders declining to 49 from 59. Short interest also differs. QXO’s short interest was at approximately 10.5% to 17.8% of the float depending on the float calculation while Toll Brothers’ was roughly 4.05% to 4.14% of the float.
Cramer’s comments connect both companies to the same housing slowdown, but the financial impact differs. QXO, Inc. is absorbing a major acquisition while carrying more debt, while Toll Brothers, Inc. is dealing with lower sales volumes and profitability pressure despite having a smaller share of buyers dependent on mortgages.
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