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Builders FirstSource, Inc. (BLDR), based in Irving, Texas, is the largest U.S. supplier of building products, prefabricated components, and value-added residential construction, repair, and remodeling services. With a market cap of $20.1 billion, Builders FirstSource serves professional homebuilders, sub-contractors, remodelers, and consumers in the US.
BLDR shares have slightly outpaced the broader market over the past year. Over the past 52 weeks, BLDR gained 32.7%, while the broader S&P 500 Index ($SPX) has soared 31.1% returns. However, in 2024, BLDR surged 5.4%, compared to SPX’s 24.7% gains on a YTD basis.
Narrowing the focus, BLDR has underperformed the SPDR S&P Homebuilders ETF’s (XHB) 44.1% returns over the past 52 weeks and 23.3% gains on a YTD basis.
On Nov. 5, BLDR released its Q3 earnings report, and its shares rose by 5%. It posted adjusted earnings of $3.07 per share, missing the $3.09 per share estimate, with revenue of $4.23 billion also falling short of forecasts of $4.47 billion. The company expects full-year revenue between $16.3 billion and $16.6 billion.
For the current fiscal year, ending in December, analysts expect Builders FirstSource’s EPS to drop 20.8% year over year to $11.56. The company’s earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters, while missing on another occasion.
Among the 17 analysts covering the BLDR stock, the consensus rating is a “Strong Buy.” That’s based on 12 “Strong Buy” ratings, one “Moderate Buy,” and four “Holds.”
This configuration is slightly more bullish than a month ago when 11 analysts recommended “Strong Buy.”
On Nov. 7, Stephens raised Builders FirstSource's price target to $200 from $178, maintaining an “Overweight” rating. While the firm expects 2025 single-family to start to be flat or slightly up, it anticipates a housing rebound in H2 2025. BLDR is seen as well-positioned to benefit, supported by higher margins and robust cash flow, according to the analyst.
BLDR’s mean price target of $208.65 represents a premium of 18.6% from current price levels. The street-high target of $232 indicates a potential upside of 31.9%.
