One-glance verdict
Undervalued
$173.09 our estimate vs market $56.25
Wall Street consensus: $79.90 (-53.8% lower than our fair-value estimate)
68% below our estimate, below the bear case
Fundamentals snapshot
Builders FirstSource, Inc.
BLDR · NYQ · Industrials · Building Products & Equipment
Current price
$56.25
52-week range
$54.75 - $131.50
Market cap
$6.05B
Balance sheet
Stretched
2.87x Stretched
Net debt $5.17B. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
3 Risks
1 rewards · 3 risks
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 316.2% above its 5-year average P/E.
- Risk Net debt grew 44.3% over 3 years.
- Risk Operating margin compressed from 16.6% to 3.3% over 3 years.
What this company does
Builders FirstSource, Inc.
Builders FirstSource is a one-stop shop for professional homebuilders, selling nearly all the materials needed to build a house, from lumber to factory-made wall panels. A key part of their business is pre-building these large housing components, which helps construction crews build homes faster and more reliably. Because they supply the essential skeleton and parts for home construction, their business tends to do well when the housing market is strong and lots of new homes are being built.
How the company got here
Builders FirstSource was founded in 1998 and has grown significantly through acquisitions, which are when one company purchases another. A major turning point was the purchase of ProBuild in 2015, which greatly increased the company's size and reach across the country. Another key event was the 2021 merger with BMC Stock Holdings, which solidified its position as a top supplier in the U.S. building materials industry. The company has also been buying smaller, well-run local lumber yards and manufacturers to expand its presence in various markets.
What it actually does
Builders FirstSource is the largest supplier of building materials for professional homebuilders in the United States. Think of them as a one-stop shop for contractors building new homes or working on remodeling projects. They provide everything from the basic lumber needed to frame a house to more finished products like windows, doors, and cabinets. They also offer services like installation and design assistance to help builders work more efficiently.
Manufactured Products
This part of the business focuses on creating building components in a factory setting. Instead of building everything on the job site, they manufacture items like roof trusses (the triangular framework for the roof), floor systems, and pre-built wall panels. This process, known as prefabrication, helps builders save time and reduce labor costs. This segment is a key focus for the company because it offers higher profit margins (the amount of profit made per dollar of sales) than simply selling raw materials.
Windows, Doors & Millwork
This segment provides the finishing touches that make a house a home. It includes selling and sometimes installing windows, interior and exterior doors, and millwork (decorative wood trim like baseboards and crown molding). The company assembles doors with their frames to make installation easier for builders. This is an important business line that caters to both new construction and the repair and remodel market.
Specialty Building Products & Services
This is the company's largest segment by revenue and covers a wide variety of other essential building materials. This includes products like siding, roofing, insulation, and cabinets. Beyond just selling these items, Builders FirstSource also offers services like professional installation and even turnkey framing, where they manage the entire process of building the home's structural shell.
Lumber & Lumber Sheet Goods
This is the most traditional part of their business, involving the sale of raw wood products. This includes dimensional lumber (the 2x4s and 2x6s used for framing) and sheet goods like plywood. While essential for construction, the prices for these products can be very volatile, meaning they can change rapidly. A key part of the company's strategy is to grow its other, more stable product categories.
What management is betting on now
The company's leadership is focused on expanding its more profitable, value-added products like factory-built components. They are also investing heavily in digital tools to make the homebuilding process more efficient for their customers. Another priority is to continue making strategic acquisitions to enter new markets or strengthen their position in existing ones. By offering a combination of materials, manufactured components, and digital solutions, they aim to become an indispensable partner to homebuilders.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$630.38M
FY2024 Q4
$273.79M
FY2025 Q1
$32.35M
FY2025 Q2
$252.30M
FY2025 Q3
$461.91M
FY2025 Q4
$106.72M
FY2026 Q1
$40.71M
FY2026 Q2
$29.98M
Revenue
$3.86B
Net income
$-3.90M
Diluted EPS
-0.04
Operating cash flow
$68.03M
Free cash flow
$29.98M
Fetching…
Sources
Revenue
$3.29B
Net income
$-47.41M
Diluted EPS
-0.43
Operating cash flow
$87.45M
Free cash flow
$40.71M
Fetching…
Sources
Revenue
$3.36B
Net income
$31.48M
Diluted EPS
0.29
Operating cash flow
$194.79M
Free cash flow
$106.72M
Fetching…
Sources
Revenue
$3.94B
Net income
$122.38M
Diluted EPS
1.10
Operating cash flow
$547.72M
Free cash flow
$461.91M
Fetching…
Sources
Revenue
$4.23B
Net income
$185.03M
Diluted EPS
1.66
Operating cash flow
$341.04M
Free cash flow
$252.30M
Fetching…
Sources
Revenue
$3.66B
Net income
$96.30M
Diluted EPS
0.84
Operating cash flow
$132.33M
Free cash flow
$32.35M
Fetching…
Sources
Revenue
$3.82B
Net income
$190.24M
Diluted EPS
1.65
Operating cash flow
$373.46M
Free cash flow
$273.79M
Fetching…
Sources
Revenue
$4.23B
Net income
$284.78M
Diluted EPS
2.44
Operating cash flow
$729.96M
Free cash flow
$630.38M
Fetching…
Sources
Is it cheap or expensive?
Fair value $173.09 vs current price $56.25
Wall Street consensus is the average analyst price target: $79.90 (-53.8% lower than our fair-value estimate).
Our most-likely fair value is $173.09 a share — about 207.7% above today's price of $56.25, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $5.2B. Interest coverage 2.9x.
Net debt
$5.17B
Interest coverage
2.87x
Builders FirstSource, Inc.'s profit covers its interest bill about 2.9 times over. which is weaker than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
BLDR
BASELINE
Builders FirstSource, Inc.
Total debt $5.24B Interest coverage 2.87x This is the baseline the peer rows are being compared against.
Total debt $408.40M Interest coverage 33.62x +1,071% vs BLDR Carries about 11.7x more debt cushion than BLDR.
Total debt $377.00M Interest coverage 18.50x +544% vs BLDR Carries about 6.4x more debt cushion than BLDR.
Total debt $549.25M Interest coverage 8.39x +192% vs BLDR Carries about 2.9x more debt cushion than BLDR.
What you should know
The case for and against BLDR
1 Reward
3 Risks
Rewards
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 316.2% above its 5-year average P/E.
-
Net debt grew 44.3% over 3 years.
-
Operating margin compressed from 16.6% to 3.3% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
62.50x
Forward P/E
12.90x
P/B
1.51x
P/S
0.42x
EV/EBITDA
10.98x
PEG ratio
2.02x
Profitability
How much profit each dollar creates
Gross margin
29.2%
Operating margin
3.3%
Net margin
0.7%
ROE
2.5%
ROA
2.4%
Health
Liquidity and balance-sheet strength
Debt / equity
1.31x
Current ratio
1.79x
Quick ratio
1.01x
Total debt
$5.24B
Total cash
$65.65M
Growth
How the business has been compounding
Revenue TTM
$14.45B
Revenue 5Y CAGR
-6.5%
EPS TTM
0.90
EPS 5Y CAGR
-38.6%
Cash flow
How much cash the business throws off
Operating CF TTM
$898.00M
Free CF TTM
$853.28M
FCF margin
5.9%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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