Gypsum Management Supply (NYSE: GMS), the largest distributor of specialty wallboard and ceiling products in North America, delivers. It has built a one-of-a-kind business selling and transporting building materials to construction sites, thereby solving a logistical challenge for builders.

The company just went public in May and now trades slightly above its $21 initial public offering price. A mid-September report that just missed analysts’ revenue estimates sent the stock down 8%, giving investors the rare chance to buy GMS close to its issue price. I think the stock could rise 60% from today’s levels. A strong base business boosted by acquisitions of regional competitors should expand earnings per share 22% to $1.74 in 2016 and another 18% in 2017.

My target price: $36.

GMS reported its 20th consecutive quarter of double-digit sales growth in mid-September. Revenue and earnings leaped 22% and 35%, respectively, thanks to a more profitable mix of products. GMS’s expertise in just-in-time, precise delivery of gypsum and wallboard products makes it a favorite of builders.

One-Stop Shop

Delivering materials for new construction or renovation demands precise timing and execution for the delivery to be done in a cost-effective way. GMS’s expertise lies in simplifying the complicated task of delivering wallboard, ceiling material and steel framing to residential and commercial construction sites.

Almost 50% of GMS’s revenue comes from distributing gypsum drywall. Every room in a house or building needs drywall, but wallboard is a particularly finicky product to deliver. It comes in long, heavy and cumbersome panels, must be stored at certain temperatures and requires special boom trucks to deliver the material to upper stories.

These trucks typically make deliveries before or after work hours and require drivers to check wire lines and tree limbs for obstructions. Delays mean lost time, and especially in the construction business, time is money.

Suspended-ceiling products and steel framing make up the next 30% of revenue, with the balance coming from other products. In all, GMS stocks 20,000 different items in its building yards so that contractors can make one stop for all the products they need. A full fleet of specialty trucks and experienced workers staff the yards, which open early and close late to accommodate builders’ schedules.

A National Build-Out

Since its founding in 1971, Georgia-based GMS has grown from a single location to over 185 branches across 41 states. Revenue has more than doubled since 2011 to $1.8 billion and is expected to rise 20% for fiscal 2017 (ends April 2017).

In 2014 private equity firm AEA Investors bought 65% of GMS. After that investment, GMS’s expansion kicked into high gear. It bought 11 branches of product suppliers in the following year.

The drywall and interior supply market is highly fragmented. Most of GMS’s competitors are mom and pop shops or chains with three or four locations, leaving a fertile field for potential acquisitions.

Since 2014 GMS has opened 12 new branches and bought 30 more from competitors. It plans on opening several new branches per year and will make more acquisitions to expand geographically.

Tricky Deliveries, Big Profits

As GMS grows larger, it can negotiate lower prices from suppliers. Because of its expansion, this building supplier now has a 13% market share in drywall, up from 8% in 2011.

As the company brings on smaller shops, it is able to shift back-office and human resource expenses over to its corporate system, increasing the profitability of these operations. At the same time, GMS enjoys a bump in profits from the miscellaneous other products that each shop sells.

GMS’s base business has been growing 8% to 10%, with acquisitions layering another 10% to 12% growth. Those acquisitions mean debt. At the end of July that debt equaled $546 million. Though large, the debt is managed well. The company has paid off almost $80 million in the past two quarters and should enjoy lower interest rates after refinancing one of its loans. Moody’s and Standard and Poor’s both increased their rating of the company’s debt thanks to improved profits and a stronger housing market.