BUILDERS FIRSTSOURCE INC (NYSE:BLDR) – A Potentially Undervalued Stock in the Building Sector

BUILDERS FIRSTSOURCE INC (NYSE:BLDR) was identified as a decent value stock by our screening process. The company shows solid profitability and reasonable growth while trading at an attractive valuation. Here’s a closer look at why BLDR may appeal to value investors.

Valuation

BLDR stands out with a Valuation Rating of 7/10, indicating it is priced attractively compared to peers. Key points:

• P/E Ratio of 10.28 – Well below the industry average (18.40) and the S&P 500 (26.34).
• Forward P/E of 11.23 – Suggests continued reasonable pricing.
• Enterprise Value/EBITDA and Price/FCF – Both metrics show BLDR is cheaper than over 80% of its industry peers.

Profitability

The company earns a Profitability Rating of 7/10, supported by:

• Return on Equity (20.93%) – Better than 70% of competitors.
• Strong ROIC (11.32%) – Above the industry average, though below its 3-year peak.
• Expanding Margins – Gross, operating, and profit margins have improved in recent years.

Financial Health

With a Health Rating of 5/10, BLDR has some strengths but also areas to monitor:

• Debt/Equity Ratio (1.02) – Higher than ideal, though manageable.
• Positive Cash Flow – Free cash flow covers debt obligations comfortably.
• Altman-Z Score (2.99) – Indicates moderate financial stability but warrants caution.

Growth

BLDR’s Growth Rating of 4/10 reflects mixed performance:

• Revenue Growth (17.64% CAGR over past years) – Strong historical expansion.
• Recent Decline – Earnings and revenue dipped in the last year, though long-term trends remain positive.
• Modest Future Growth – Analysts expect slow but steady EPS and revenue increases ahead.

Our Decent Value Stocks screener lists more stocks with similar characteristics.
For a deeper dive, review the full fundamental report on BLDR.

Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.