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Valued at a market cap of $24.6 billion, Builders FirstSource, Inc. (BLDR) manufactures and supplies building materials, manufactured components, and construction services to professional homebuilders, remodelers, and consumers. The Irving, Texas-based company aims to deliver unparalleled service to large and small customers through continuous innovation and a wide portfolio of value-added products and manufacturing capabilities.
Companies valued at $10 billion or more are generally described as “large-cap” stocks, and Builders FirstSource fits right into that category. The company is the largest supplier of building products and prefabricated components in the United States and has approximately 570 distribution and manufacturing locations across 43 states.
Despite a 5.7% decline from its 52-week high of $214.70 reached on Mar. 21, shares of this building products manufacturer have soared 39.9% over the past three months, significantly surpassing the broader S&P 500 Index’s ($SPX) 4.1% return over the same time frame.
In the longer term, BLDR stock is up 21.3% on a YTD basis, surpassing SPX’s 19.8% gains. Moreover, shares of BLDR have rallied 59.2% over the past 52 weeks, significantly outpacing SPX’s 28.6% returns over the same time frame.
To confirm its bullish trend, BLDR has been trading above its 50-day and 200-day moving averages since August despite a few fluctuations.
Despite a slight revenue miss, shares of BLDR surged 4.1% following its Q2 earnings release on Aug. 6 due to the company's adjusted earnings of $3.50 per share, surpassing the Wall Street estimates of $3.14 per share. This was primarily fueled by the company’s solid EBITDA margin in the mid-teens and robust gross margins near 33%. BLDR announced a $1 billion share repurchase plan, further boosting investor confidence in the stock.
BLDR has lagged behind its rival, Masco Corporation’s (MAS) 24.3% gains on a YTD basis but has outpaced MAS’ 50.1% returns over the past 52 weeks.
Despite BLDR’s outperformance, analysts remain cautiously optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 15 analysts covering the stock, and as of writing, BLDR is trading above its mean price target of $183.87.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
