Latest news with #BuildersFirstSource
Yahoo
2 days ago
- Business
- Yahoo
Builders FirstSource, Inc. (BLDR): A Bull Case Theory
We came across a bullish thesis on Builders FirstSource, Inc. on Darius Dark Investing's Substack. In this article, we will summarize the bulls' thesis on BLDR. Builders FirstSource, Inc.'s share was trading at $135.63 as of July 28th. BLDR's trailing and forward P/E were 17.39 and 16.86, respectively according to Yahoo Finance. A crane carrying heavy building materials, representing the robust civil engineering products of the company. Builders FirstSource (BLDR), the largest supplier of structural building products and value-added services in the U.S., stands out for its integrated model, spanning lumber, engineered wood, and specialty materials, alongside custom fabrication and installation services that together represent nearly half of revenue. These high-margin offerings create deeper customer ties and insulate earnings from pure commodity price swings. With 590 locations across 43 states, BLDR's reach across homebuilders, commercial contractors, and remodelers provides resilience and purchasing power in a fragmented market. However, the backdrop remains challenging: U.S. housing faces affordability constraints from ~7% mortgage rates, tight inventories, and uneven construction activity, with single-family starts expected to rise modestly in 2025 even as multifamily softens. BLDR's Q1 2025 results reflected these pressures, with sales down 6% year-over-year to $3.7 billion, adjusted EBITDA contracting 31.7% to $369 million, and free cash flow plunging to $45 million. Guidance for 2025 implies EBITDA margins of 10.6–12.3% with acquisitions driving most top-line growth, underscoring ongoing organic headwinds. Management remains focused on a long-term strategy anchored in digital transformation, with processing over $1.5 billion in orders and 42% of 2024 volume already digital, aiming to embed BLDR into customer workflows. Aggressive M&A, such as the $828 million acquisitions of Alpine Lumber and O.C. Cluss, and an $8 billion buyback program that retired nearly half the share base since 2021, reinforce confidence in cash deployment. Trading at 12.7–13.8× earnings, BLDR's valuation reflects cyclical risks yet offers upside if digital adoption, value-added growth, and capital returns offset housing headwinds, making the stock appealing for patient investors. Previously, we covered a on Carlisle Companies Incorporated (CSL) by Max Dividends in April 2025, highlighting its dominance in commercial construction materials, operational resilience, and Vision 2030 growth targets. The stock has appreciated about 12.66% since our coverage, as the modernization cycle supports demand. The thesis still stands on solid fundamentals. Darius Dark shares a similar view but stresses BLDR's integrated model, digital expansion, and capital allocation. Builders FirstSource, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 58 hedge fund portfolios held BLDR at the end of the first quarter which was 59 in the previous quarter. While we acknowledge the potential of BLDR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None.
Fast Company
3 days ago
- Business
- Fast Company
Nation's top supplier: Housing market pain worse than builders say
Want more housing market stories from Lance Lambert's ResiClub in your inbox? Subscribe to the ResiClub newsletter. Builders FirstSource, the largest U.S. supplier of building materials and prefabricated components, is valued at $14 billion. Given that it takes orders and makes deliveries to builders across the nation, few firms have a more comprehensive view of both multifamily and single-family construction. That's why it's notable that Builders FirstSource CEO Peter Jackson went out of his way on Thursday to suggest to Wall Street analysts that commentary coming from giant publicly traded homebuilders this earnings season was underplaying softening and softness in residential construction. 'There were a lot of public homebuilders that have released [earnings] over the past couple of weeks [that reported relatively more positive pictures], versus kind of our signal here that it's a bit worse than what people are thinking,' Jackson told analysts on the company's July 31 earnings call. Jackson added: 'Given the inventory environment and what we're seeing in terms of the land market, what we're hearing about the takedowns and the contracts, our sense is builders are slowing on the start side . . . Our sense is that slowing, that resetting to a lower [housing starts] rate in order to manage those completed home inventory levels, that's what's going to flow through. So that's the slowing indication that you've got from us.' This weaker housing demand environment is causing unsold completed inventory—in particular, in the Sun Belt—to tick up. Indeed, since the Pandemic Housing Boom fizzled out, the number of unsold, completed U.S. new single-family homes has been rising: June 2018 —> 62,000 June 2019 —> 79,000 June 2020 —> 66,000 June 2021 —> 34,000 June 2022 —> 38,000 June 2023 —> 69,000 June 2024 —> 99,000 June 2025 —> 119,000 The June figure (119,000 unsold, completed new homes) published this week is the highest level since July 2009 (126,000). To put the number of unsold, completed new single-family homes into historic context, we have ResiClub 's Finished Homes Supply Index (see chart above). The index is one simple calculation: the number of unsold, completed U.S. new single-family homes divided by the annualized rate of U.S. single-family housing starts. A higher index score indicates a softer national new construction market with greater supply slack, while a lower index score signifies a tighter new construction market with less supply slack. If you look at unsold, completed single-family new builds as a share of single-family housing starts (see chart below), it still shows we've gained slack / single-family construction demand is softening. However, it puts us closer to pre-pandemic 2019 levels than the Great Financial Crisis bust. That said, if new construction or the economy hit a big speed bump and housing starts dropped by 20% to 30%, this ratio would spike quickly—even if unsold builds didn't increase much. Much of the completed unsold single-family new builds is located in pockets of the Sun Belt—in states like Florida, Texas, Arizona, Colorado, and Tennessee. According to ResiClub 's statistical analysis, there is a modest to moderate correlation between recent single-family permitting levels and active inventory rising above pre-pandemic 2019 levels. In other words, many of the places where single-family homebuilders have the strongest presence are also the housing markets that have experienced the greatest recent softening. If you talk to homebuilders in Cleveland, Boston, or New Haven, you're likely to hear a very different story right now than from their peers in Tampa, Austin, and San Antonio.
Yahoo
6 days ago
- Business
- Yahoo
Builders FirstSource Inc (BLDR) Q2 2025 Earnings Call Highlights: Navigating Market Challenges ...
Net Sales: Decreased 5% to $4.2 billion, impacted by lower organic sales and commodity deflation. Gross Profit: $1.3 billion, a decrease of 11% compared to the prior year period. Gross Margin: 30.7%, down 210 basis points year-over-year. Adjusted SG&A: $818 million, increased by $4 million due to acquired operations. Adjusted EBITDA: $506 million, down 24% from the prior year. Adjusted EBITDA Margin: 12%, down 300 basis points year-over-year. Adjusted EPS: $2.38, a decrease of 32% compared to the prior year. Operating Cash Flow: $341 million, a decrease of $111 million from the prior year. Free Cash Flow: $255 million for the quarter. Net Debt to Adjusted EBITDA Ratio: Approximately 2.3 times. Capital Expenditures: $86 million in the second quarter. Share Repurchases: 3.3 million shares repurchased at an average price of $118.27 per share, totaling $391 million. 2025 Net Sales Guidance: $14.8 billion to $15.6 billion. 2025 Adjusted EBITDA Guidance: $1.5 billion to $1.7 billion. 2025 Free Cash Flow Guidance: $800 million to $1 billion. Q3 Net Sales Guidance: $3.65 billion to $3.95 billion. Q3 Adjusted EBITDA Guidance: $375 million to $425 million. Warning! GuruFocus has detected 3 Warning Sign with BLDR. Release Date: July 31, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Builders FirstSource Inc (NYSE:BLDR) reported strong free cash flow generation, providing flexibility for organic growth, strategic M&A, and shareholder returns. The company invested over $35 million in value-added solutions, including opening a new millwork location in Florida and expanding plants in seven states. BLDR's digital tools have seen significant adoption, with more than $2 billion in orders and $4 billion in quotes since early 2024, indicating strong customer engagement. The company successfully launched two pilot markets with the new SAP ERP system, expected to unlock growth and efficiency opportunities. BLDR maintained a high on-time and in-full delivery rate of 92%, demonstrating operational excellence and reliability in service delivery. Negative Points Net sales decreased by 5% to $4.2 billion, impacted by lower organic sales and commodity deflation. The housing market remains challenging, with single-family starts expected to decrease through year-end due to affordability concerns and rising home inventories. Gross profit decreased by 11% compared to the prior year, with gross margin down 210 basis points, primarily due to margin normalization in single and multi-family segments. Adjusted EBITDA was down 24%, driven by lower gross profit, and adjusted EPS decreased by 32% compared to the prior year. The company faces ongoing pressure from commodity deflation, particularly in OSB, which continues to create downward pricing pressure. Q & A Highlights Q: Can you elaborate on how Builders FirstSource is strengthening its competitive position in the current challenging starts environment? A: Peter Jackson, CEO, explained that the company is focusing on improving on-time and in-full performance, aligning more closely with builders to achieve affordability, and leveraging technology to optimize the build process. These efforts are aimed at positioning the company to grow and take advantage of efficient relationships with customers when the market turns. Q: What drove the sequential improvement in gross margins in Q2, and what are the expectations for Q3 and the second half of the year? A: Pete Beckmann, CFO, noted that the margin improvement was due to better-than-expected performance in the multi-family and R&R spaces. The company expects sequential normalization or declines in margins through the rest of the year, consistent with the competitive landscape and softer starts environment. Q: How is Builders FirstSource managing the trust capacity environment and margins in the current market? A: Peter Jackson, CEO, stated that the company is underutilized in trust capacity due to lower starts but is focusing on efficiency metrics like board foot per labor hour. The company is consolidating operations where necessary to maintain stability and is confident in its competitive efficiency. Q: What impact do the increased Canadian lumber tariffs have on Builders FirstSource's outlook? A: Pete Beckmann, CFO, mentioned that the impact of increased duties is factored into the guidance, with minimal financial impact expected in 2025 due to lead times. The company is more concerned about OSB prices, which continue to face downward pressure due to oversupply. Q: How is Builders FirstSource approaching M&A in the current market environment? A: Peter Jackson, CEO, indicated that while the M&A environment is currently slower, the company remains focused on opportunities that expand value-added product offerings and enhance leadership in desirable geographies. The company is confident that inorganic investments will continue to drive long-term growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
7 days ago
- Business
- Yahoo
Builders FirstSource cuts 2025 revenue outlook as tariffs soften housing demand
-Builders FirstSource cut its annual revenue forecast on Thursday due to reduced construction volumes in single- and multi-family homes. High mortgage rates and tariff-related headwinds have led potential buyers to delay home purchases, dampening demand for new housing. Shares of the Irving, Texas-based company that supplies building materials and products for home construction were down 7% in premarket trading. New home sales in June fell 6.6%, while inventory reached its highest level since October 2007, according to U.S. government data. Net sales in the multi-family segment fell 23.3% year-over-year, marking a sharp downturn, while the single-family segment also faced pressure, slipping 9.1% from a year ago. It forecast 2025 net sales between $14.8 billion and $15.6 billion, compared with a previous forecast of $16.05 billion to $17.05 billion. The company's second-quarter adjusted profit came in at $2.38 per share, compared to $3.50 per share from a year earlier. Analysts on average had expected $2.28 per share, according to data compiled by LSEG. Its quarterly net sales fell 5% to $4.23 billion, compared to an estimate of $4.28 billion. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
30-07-2025
- Business
- Yahoo
Why Unusual Options Activity for Builders FirstSource (BLDR) May Point to an Earnings Surprise
With the housing market in a rough patch due to elevated prices and borrowing costs, it's no surprise that Builders FirstSource (BLDR) — the largest U.S. supplier of building products for new residential construction — has struggled. Since the start of the year, BLDR stock is down more than 5% while the benchmark S&P 500 index is up almost 7% during the same frame. It's also worth pointing out that in the past 52 weeks, the security has given up more than 19% of market value. Frankly, it's not a great look for Builders FirstSource, which is scheduled to release its earnings results this Thursday before the opening bell. However, bold and adventurous speculators interested in a contrarian idea may want to keep their eyes on BLDR stock. More News from Barchart $200 AMD Price Target? Try These 2 Option Trades Before the Market Moves Option Volatility And Earnings Report For July 28 – Aug 1 Should You Grab This 'Strong Buy' Semiconductor Stock Ahead of Earnings? Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! First, Builders FirstSource represented one of the highlights of Barchart's Unusual Stock Options Volume screener. This nifty readout provides platform users with the top 500 securities that have incurred aberrant activity in the derivatives market relative to normal trends. Potentially, this screener can clue us in on what the smart money may be doing with its funds. On Monday, total options volume for BLDR stock hit 6,231 contracts, representing a nearly 85% lift over the trailing one-month average. Further, call volume reached 3,127 contracts while put volume was 3,104 contracts. This pairing yielded a relatively even put/call ratio of 0.993. Nevertheless, Barchart's options flow screener — which focuses exclusively on big block transactions likely placed by institutional investors — added a bit more nuance. As it turned out, net trade sentiment yesterday landed at $55,100 above parity, thus favoring the bulls. The biggest transaction by dollar volume was $210,000 worth of sold puts expiring Sep. 19, 2025. As a credit-based transaction (due to the sale of options), we can reasonably presume that the sellers don't expect BDLR stock to fall materially below the underlying option's strike price (which was $140). That's not definitive proof that Builders FirstSource will post an earnings surprise. However, it does seem that the smart money is confident that the company can deliver the goods. Statistical Case Adds a Tempting Note to BLDR Stock While deciphering unusual options activity can provide an edge, it's difficult to know for sure how the market will ultimately respond. When it comes to unusual derivatives, the fact is that investors sold $140 puts expiring in September, with a bid price of $10.60. Based on intrinsic value only, it's imperative for the put sellers that BLDR stock not drop below $129.40. However, if we're actively speculating on Builders FirstSource, the above tidbit doesn't really tell us a whole lot about how we should structure our trade. This is where we need to think in a different framework. Here, it's helpful to consider market demand as a sentiment voting record. Just about the only objective fact that we know is that, in the past 10 weeks, the market has voted to buy BLDR stock six times and sell four times. During this period, BLDR enjoyed an upward trajectory. For brevity, we can abbreviate this sequence as 6-4-U. Now, at first glance, it may seem ridiculous to compress BLDR's price magnitude into a simple binary code. But what we have done here is to categorize the stock's behavior as a discrete state. Moving forward, we can compare this state against others to determine if we have an asymmetric edge. Conducting this exercise across rolling 10-week intervals (using data from January 2019 onward) gives us the following demand profile: L10 Category Sample Size Up Probability Baseline Probability Median Return if Up 2-8-D 8 50.00% 53.06% 11.15% 3-7-D 35 51.43% 53.06% 4.40% 3-7-U 10 50.00% 53.06% 9.23% 4-6-D 27 40.74% 53.06% 6.95% 4-6-U 25 48.00% 53.06% 5.29% 5-5-D 7 28.57% 53.06% 5.35% 5-5-U 45 48.89% 53.06% 4.14% 6-4-D 14 71.43% 53.06% 5.19% 6-4-U 63 63.49% 53.06% 3.88% 7-3-D 8 87.50% 53.06% 3.49% 7-3-U 57 50.88% 53.06% 4.75% 8-2-D 5 60.00% 53.06% 3.85% 8-2-U 6 0.00% 53.06% N/A As you can see, the chance that a long position in BLDR stock may rise on any given week is 53.06%. This is essentially the null hypothesis, the expectation of upside assuming no mispricing and no asymmetric edge. However, my alternative hypothesis is that because the 6-4-U sequence is flashing, we have a 63.49% chance of upside, not 53.06%. Assuming the positive pathway, the median return stands at 3.88%. That would put BDLR stock really close to the $141 level. But because we're talking about an earnings report, a positive surprise could potentially swing the share price to $145, maybe even higher. Putting It All Together Based on the market intelligence above, aggressive speculators may consider the 140/145 bull call spread expiring Aug. 15. This transaction involves buying the $140 call and simultaneously selling the $145 call, for a net debit paid of $190 (the most that can be lost in the trade). Should BLDR stock rise through the short strike price ($145) at expiration, the maximum reward is $310, a payout of over 163%. Admittedly, this trade is risky because the median expected performance from the 6-4-U sequence falls short of the $145 target. That said, a positive showing for the upcoming earnings could help deliver a stronger-than-average return. As for the sequence itself, running a one-tailed binomial test reveals a p-value of 0.0783. This means that there is a 7.83% chance that the implications of the sequence could materialize randomly as opposed to 'intentionally.' While this is a tad bit removed from the 5% threshold of statistical significance, I would make the argument that the stock market's open, entropic system allows for some wiggle room. In other words, there appears to be something empirically intriguing about the 6-4-U. Combined with the unusual options activity and the upcoming earnings, BLDR stock deserves to be on your radar. On the date of publication, Josh Enomoto 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. This article was originally published on
