Now trading at a price of $146.28, Builders FirstSource has moved 2.1% so far today.
Builders FirstSource returned gains of 123.0% last year, with its stock price reaching a high of $156.85 and a low of $62.07. Over the same period, the stock outperformed the S&P 500 index by 106.0%. More recently, the company's 50-day average price was $123.04. Builders FirstSource, Inc., together with its subsidiaries, manufactures and supplies building materials, manufactured components, and construction services to professional homebuilders, sub-contractors, remodelers, and consumers in the United States. Based in Irving, TX, the large-cap Consumer Discretionary company has 29,000 full time employees. Builders FirstSource has not offered a dividend during the last year.
Growing Revenues With Increasing Reinvestment in the Business:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $7,725 | $7,280 | $8,559 | $19,894 | $22,726 | $17,304 |
| Revenue Growth | n/a | -5.75% | 17.56% | 132.44% | 14.24% | -23.86% |
| Gross Margins | 25% | 27% | 26% | 28% | 34% | 35% |
| Operating Margins | 5% | 5% | 6% | 12% | 17% | 13% |
| Net Margins | 3% | 3% | 4% | 9% | 12% | 9% |
| Net Income (MM) | $205 | $222 | $314 | $1,725 | $2,749 | $1,574 |
| Net Interest Expense (MM) | -$108 | -$110 | -$136 | -$136 | -$198 | -$188 |
| Depreciation & Amort. (MM) | $98 | $100 | $117 | $189 | $497 | $558 |
| Earnings Per Share | $1.76 | $1.9 | $2.66 | $8.48 | $16.82 | $11.95 |
| EPS Growth | n/a | 7.95% | 40.0% | 218.8% | 98.35% | -28.95% |
| Diluted Shares (MM) | 117 | 117 | 118 | 203 | 163 | 48 |
| Free Cash Flow (MM) | $181 | $391 | $148 | $1,516 | $3,259 | $2,155 |
| Capital Expenditures (MM) | $101 | $113 | $112 | $228 | $340 | $512 |
| Current Ratio | 1.88 | 1.59 | 2.07 | 1.86 | 1.9 | 1.76 |
| Long Term Debt (MM) | $1,546 | $1,277 | $1,597 | $2,978 | $2,978 | $3,395 |
| Net Debt / EBITDA | 3.32 | 2.62 | 1.84 | 1.14 | 0.68 | 1.2 |
Builders FirstSource has growing revenues and increasing reinvestment in the business, exceptional EPS growth, and healthy leverage. However, the firm suffers from slimmer gross margins than its peers and weak operating margins with a positive growth rate. Finally, we note that Builders FirstSource has irregular cash flows.
Builders FirstSource Is Fairly Priced at Current Levels:
Builders FirstSource has a trailing twelve month P/E ratio of 10.3, compared to an average of 22.96 for the Consumer Discretionary sector. Based on its EPS guidance of $11.72, the company has a forward P/E ratio of 10.5. The company doesn't provide forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 37.6%. On this basis, Builders FirstSource's PEG ratio is 0.27. Using instead the 11.0% weighted average of Builders FirstSource's earnings CAGR and the broader market's anticipated 5-year EPS growth rate, the company's PEG ratio is 0.93, which implies that its shares may be underpriced. Additionally, the market is possibly undervaluing Builders FirstSource in terms of its equity because its P/B ratio is 3.94 whereas the sector average is 4.24. The company's shares are currently trading -9.0% below their Graham number.
Builders FirstSource Has an Average Rating of Buy:
The 16 analysts following Builders FirstSource have set target prices ranging from $128.0 to $200.0 per share, for an average of $160.81 with a buy rating. As of April 2023, the company is trading -23.5% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Builders FirstSource has an average amount of shares sold short because 5.7% of the company's shares are sold short. Institutions own 103.5% of the company's shares, and the insider ownership rate stands at 1.92%, suggesting a large amount of insider shareholders. The largest shareholder is Blackrock Inc., whose 13% stake in the company is worth $2,342,747,762.
