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Builders Firstsource (BLDR)
NYSE:BLDR

Builders Firstsource (BLDR) AI Stock Analysis

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Builders Firstsource

(NYSE:BLDR)

Rating:72Outperform
Price Target:
$141.00
▲(10.25%Upside)
Builders Firstsource receives a balanced score of 72, reflecting robust financial performance and strategic corporate events. However, challenges in revenue growth and mixed technical indicators temper the overall outlook. The company's proactive financial maneuvers and strategic initiatives support future growth potential despite current market pressures.
Positive Factors
Market Positioning
BLDR is well positioned to profitably capitalize on residential construction primed to realize outsized benefits from the undersupply of new homes while strengthening its leading position.
Productivity Savings
The company achieved ~$17M in productivity savings during the quarter through supply chain, fleet, and truss manufacturing initiatives with a full year target of $70-90M.
Technological Edge
The company uses its technological edge for future outsized growth.
Negative Factors
Guidance Reduction
BLDR is reducing 2025 guidance for net sales and adjusted EBITDA, indicating a challenging housing market.
Housing Demand
Weaker-than-expected new single-family housing demand is leading to more price competition and margin pressure.
Tariff Uncertainty
Lumber tariffs add another level of uncertainty, with potential demand destruction from higher tariffs.

Builders Firstsource (BLDR) vs. SPDR S&P 500 ETF (SPY)

Builders Firstsource Business Overview & Revenue Model

Company DescriptionBuilders FirstSource, Inc. (BLDR) is a leading supplier and manufacturer of building materials, manufactured components, and construction services to professional contractors, sub-contractors, and consumers in the residential and commercial construction sectors. The company operates a network of distribution centers and manufacturing facilities across the United States, providing a diverse range of products including lumber, engineered wood, windows, doors, and other building products. Builders FirstSource is committed to delivering high-quality materials and services to its customers, supporting the construction of homes and commercial projects from foundation to finish.
How the Company Makes MoneyBuilders FirstSource generates revenue through the sale of building materials and manufactured components to construction professionals and retail customers. The company's key revenue streams include the distribution of lumber and lumber sheet goods, value-added manufactured products such as roof and floor trusses, wall panels, and engineered wood, as well as millwork, windows, and doors. Builders FirstSource also offers construction-related services, including design and installation. The company's revenue is significantly influenced by the demand for new residential construction and remodeling activities. Strategic partnerships with manufacturers and a robust supply chain network enhance its ability to serve a wide customer base efficiently. Additionally, Builders FirstSource benefits from economies of scale, leveraging its extensive distribution network to optimize operations and pricing strategies.

Builders Firstsource Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 6.90%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. There were significant achievements in digital sales growth, M&A activity, and share repurchases, which indicate a strategic focus on long-term growth. However, these were offset by declines in net sales, multifamily segment performance, and EBITDA, along with ongoing gross margin pressure. The company's liquidity and proactive productivity savings are positive, but the overall sentiment remains cautious due to the challenging market conditions.
Q1-2025 Updates
Positive Updates
Strong Digital Sales Growth
The company realized $19 million in incremental digital sales for the quarter, bringing the total to $153 million since launch.
High On-Time Delivery Rate
Builders FirstSource achieved an on-time and in-full delivery rate of 92%.
Successful M&A Activity
Completed two acquisitions in the first quarter with prior year sales of $565 million, including Alpine Lumber and O.C. Cluss.
Significant Share Repurchases
The company repurchased 3.3 million shares for $391 million in April and announced a $500 million share repurchase program.
Strong Liquidity Position
Total liquidity was $1.1 billion, consisting of $944 million in net borrowing availability and $115 million in cash.
Productivity Savings
Achieved $17 million in productivity savings in Q1 through supply chain initiatives, efficient manufacturing, and fleet management.
Negative Updates
Net Sales Decline
Net sales decreased 6% to $3.7 billion, driven by lower organic sales and commodity deflation.
Multifamily Segment Decline
Core organic sales in the multifamily segment declined 33% due to muted activity levels.
EBITDA Decline
Adjusted EBITDA was $369 million, down 32% from the prior year, primarily due to lower gross profit.
Gross Margin Pressure
Gross margins decreased by 290 basis points to 30.5%, driven by margin normalization and below-normal start environments.
Lower Single-Family Activity
Single-family declined 6%, attributable to lower starts activity, value per start, and weather impacts.
Company Guidance
During the Builders FirstSource First Quarter 2025 Earnings Conference Call, management provided guidance on various financial metrics and strategic initiatives. For the full year 2025, the company anticipates net sales to range from $16.05 billion to $17.05 billion, with adjusted EBITDA expected between $1.7 billion and $2.1 billion. The projected adjusted EBITDA margin is between 10.6% and 12.3%, while gross margins are expected to be in the range of 29% to 31%. Free cash flow is forecasted at $800 million to $1.2 billion. In the first quarter, net sales decreased by 6% to $3.7 billion, and gross profit decreased by 14% to $1.1 billion, primarily due to margin normalization and a below-normal starts environment. The company completed two acquisitions with aggregate prior year sales of roughly $565 million and committed over $900 million towards business investments, acquisitions, and share repurchases in Q1. Additionally, they reported $19 million in incremental digital sales for the quarter, with an expected additional $200 million in incremental sales by the end of 2025. Builders FirstSource remains focused on organic growth, operational excellence, and disciplined capital allocation while navigating affordability challenges and macroeconomic uncertainties.

Builders Firstsource Financial Statement Overview

Summary
Builders FirstSource demonstrates strong profitability and cash generation capabilities. Despite recent declines in revenue and net income, the company maintains a solid balance sheet with low leverage and strong equity. Its financial health is underpinned by robust cash flow generation, positioning it well for future growth.
Income Statement
75
Positive
The income statement shows solid profitability with a gross profit margin of 32.1% and a net profit margin of 5.7% for TTM (Trailing-Twelve-Months). However, both revenue and net income have declined compared to the previous year, indicating some challenges in maintaining top-line growth. The EBIT and EBITDA margins are strong, at 8.7% and 11.3%, respectively.
Balance Sheet
70
Positive
The balance sheet reflects a healthy equity position with a debt-to-equity ratio of 0.15, which indicates low leverage. The equity ratio stands at 38.2%, demonstrating a stable capital structure. However, the return on equity is modest at 20.9%, which suggests room for improvement in generating higher returns for shareholders.
Cash Flow
80
Positive
The cash flow statement is robust, with a significant operating cash flow to net income ratio of 1.84, indicating strong cash generation relative to net income. The free cash flow to net income ratio is also favorable at 1.42. Although free cash flow has decreased slightly in the TTM period, the company maintains solid cash flow metrics overall.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue16.17B16.40B17.10B22.73B19.89B8.56B
Gross Profit5.20B5.38B6.01B7.74B5.85B2.22B
EBITDA1.97B1.60B2.73B4.27B2.93B660.42M
Net Income915.38M1.08B1.54B2.75B1.73B313.54M
Balance Sheet
Total Assets11.45B10.58B10.50B10.60B10.71B4.17B
Cash, Cash Equivalents and Short-Term Investments115.37M153.62M66.16M80.44M42.60M423.81M
Total Debt5.11B4.33B3.71B3.49B3.40B1.91B
Total Liabilities7.07B6.29B5.77B5.63B5.91B3.02B
Stockholders Equity4.37B4.30B4.73B4.96B4.80B1.15B
Cash Flow
Free Cash Flow1.30B1.49B1.83B3.26B1.52B147.99M
Operating Cash Flow1.69B1.87B2.31B3.60B1.74B260.07M
Investing Cash Flow-1.47B-710.72M-668.29M-957.48M-1.34B-136.22M
Financing Cash Flow-798.20M-1.07B-1.65B-2.60B-780.11M285.87M

Builders Firstsource Technical Analysis

Technical Analysis Sentiment
Positive
Last Price127.89
Price Trends
50DMA
114.57
Positive
100DMA
123.26
Positive
200DMA
148.91
Negative
Market Momentum
MACD
2.43
Negative
RSI
66.33
Neutral
STOCH
85.91
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BLDR, the sentiment is Positive. The current price of 127.89 is above the 20-day moving average (MA) of 115.42, above the 50-day MA of 114.57, and below the 200-day MA of 148.91, indicating a neutral trend. The MACD of 2.43 indicates Negative momentum. The RSI at 66.33 is Neutral, neither overbought nor oversold. The STOCH value of 85.91 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BLDR.

Builders Firstsource Risk Analysis

Builders Firstsource disclosed 33 risk factors in its most recent earnings report. Builders Firstsource reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Builders Firstsource Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$7.82B52.6710.62%5.93%3.50%
WMWMS
74
Outperform
$9.29B20.7831.26%0.60%1.04%-10.78%
LPLPX
73
Outperform
$6.35B16.0424.41%1.23%8.09%55.08%
72
Outperform
$14.03B16.4219.62%-5.49%-33.51%
OCOC
72
Outperform
$12.20B51.5011.93%1.92%16.16%-77.11%
65
Neutral
$10.65B15.525.51%1.92%2.72%-26.34%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
BLDR
Builders Firstsource
127.89
-4.71
-3.55%
LPX
Louisiana-Pacific
92.58
13.22
16.66%
OC
Owens Corning
145.57
-17.54
-10.75%
WMS
Advanced Drainage Systems
118.78
-33.66
-22.08%
AZEK
AZEK Company
54.35
13.47
32.95%

Builders Firstsource Corporate Events

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
Builders FirstSource Approves Board Declassification and Amendments
Neutral
May 27, 2025

On May 27, 2025, Builders FirstSource, Inc. held its annual meeting where stockholders approved amendments to the company’s charter to declassify the Board of Directors and limit the liability of certain officers, aligning with Delaware law. These changes, effective upon filing, reflect a strategic shift in the company’s governance structure, potentially influencing its operational transparency and accountability. Additionally, the meeting saw the approval of the declassification of the Board, while a proposal to remove limits on the Board’s size was not passed.

The most recent analyst rating on (BLDR) stock is a Buy with a $185.00 price target. To see the full list of analyst forecasts on Builders Firstsource stock, see the BLDR Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Builders FirstSource Secures New $2.2 Billion Credit Facility
Positive
May 22, 2025

On May 20, 2025, Builders FirstSource, Inc. replaced its existing $1,800 million revolving credit facility with a new $2,200 million facility, extending the maturity date to May 20, 2030. This strategic move, facilitated by Bank of America, aims to enhance the company’s financial flexibility and potentially improve its market positioning by securing more favorable borrowing terms and conditions, which could have significant implications for its operational capabilities and stakeholder interests.

The most recent analyst rating on (BLDR) stock is a Buy with a $185.00 price target. To see the full list of analyst forecasts on Builders Firstsource stock, see the BLDR Stock Forecast page.

Private Placements and Financing
Builders FirstSource Completes $750M Senior Notes Offering
Positive
May 8, 2025

On May 8, 2025, Builders FirstSource completed a $750 million offering of 6.750% senior notes due 2035, which was a $250 million increase from the previously announced size. The proceeds from this offering were used to repay outstanding indebtedness under the company’s senior secured ABL facility, enhancing its financial positioning by addressing its debt obligations.

Private Placements and FinancingBusiness Operations and Strategy
Builders FirstSource Announces $500M Senior Notes Offering
Positive
May 5, 2025

On May 5, 2025, Builders FirstSource announced its intention to offer $500 million in senior unsecured notes due 2035, subject to market conditions. The proceeds from this offering are intended to repay outstanding indebtedness under the company’s ABL Facility. Additionally, Builders FirstSource plans to amend its senior secured ABL facility to increase commitments and extend the maturity date, although these plans are not contingent on the completion of the notes offering. This strategic financial maneuver aims to strengthen the company’s financial flexibility and operational capacity.

Business Operations and Strategy
Builders FirstSource Releases 2025 CSR Report
Positive
Apr 30, 2025

On April 30, 2025, Builders FirstSource released its 2025 Corporate Social Responsibility report, showcasing its commitment to sustainability and safety. The report highlights achievements such as a 10% reduction in the total recordable incident rate, significant charitable contributions, and sustainable sourcing practices. These efforts reflect the company’s dedication to a people-first culture and its ongoing transformation of the homebuilding industry to create a lasting impact.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 02, 2025