Builders FirstSource, Inc. (NYSE: BLDR)

Sector: Industrials Industry: Building Products & Equipment CIK: 0001316835
Market Cap 12.76 Bn
P/B 2.93
P/E 29.32
P/S 0.84
ROIC (Qtr) -43.95
Div Yield % 0.00
Rev 1y % (Qtr) -12.10
Total Debt (Qtr) 5.10 Bn
Debt/Equity (Qtr) 1.17
Add ratio to table...

About

Builders FirstSource, Inc. (BLDR) is a prominent player in the building materials industry, supplying and manufacturing a wide range of products and services to professional homebuilders, subcontractors, remodelers, and consumers across the United States. With approximately 570 locations in 43 states, the company boasts a diverse geographic footprint and a broad customer base. Builders FirstSource's main business activities revolve around the supply and manufacture of building materials, manufactured components, and construction services. The company's...

Read more

Investment thesis

Bull case

  • Robust free cash flow of 874.03M exceeds capital expenditure of 341.85M by 2.56x, indicating strong organic growth funding capability.
  • Operating cash flow of 1.22B provides strong 22.72x coverage of stock compensation 53.51M, indicating sustainable incentive practices.
  • Tangible assets of 5.92B provide exceptional 35.12x coverage of deferred revenue 168.44M, showing strong service capability backing.
  • Operating cash flow of 1.22B provides strong 7.22x coverage of deferred revenue 168.44M, indicating service delivery capability.
  • Operating cash flow of 1.22B fully covers other non-current liabilities 167.09M by 7.28x, showing strong long-term stability.

Bear case

  • Operating cash flow of 1.22B barely covers its investment activities of (1.47B), with a coverage ratio of -0.83, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 181.75M against inventory of 1.09B, the 0.17 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Cash reserves of 181.75M provide limited coverage of acquisition spending of (1.12B), which is -0.16x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 786.28M show weak coverage of depreciation charges of 591.43M, with a 1.33 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 591.43M relative to operating cash flow of 1.22B, which is 0.49x suggests significant maintenance capital requirements affecting free cash flow.

Peer comparison

Companies in the Building Products & Equipment
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TT Trane Technologies plc 104.89 Bn 35.94 4.92 4.62 Bn
2 JCI Johnson Controls International plc 91.64 Bn 26.98 3.82 9.71 Bn
3 CARR CARRIER GLOBAL Corp 56.66 Bn 38.18 2.61 12.25 Bn
4 LII Lennox International Inc 19.91 Bn 24.71 3.83 1.77 Bn
5 CSL Carlisle Companies Inc 17.50 Bn 23.63 3.49 2.88 Bn
6 MAS Masco Corp /De/ 15.94 Bn 19.68 2.11 3.17 Bn
7 OC Owens Corning 13.83 Bn 13.90 1.63 5.61 Bn
8 WMS Advanced Drainage Systems, Inc. 13.26 Bn 28.18 4.44 1.45 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.56 2.00
EV to Cash from Ops. EV/CFO 14.43 13.48
EV to Debt EV to Debt 3.44 10.94
EV to EBIT EV/EBIT 22.31 24.16
EV to EBITDA EV/EBITDA 12.73 -11.14
EV to Free Cash Flow [EV/FCF] EV/FCF 20.07 46.78
EV to Market Cap EV to Market Cap 1.38 1.12
EV to Revenue EV/Rev 1.15 2.81
Price to Book Value [P/B] P/B 2.93 4.24
Price to Earnings [P/E] P/E 29.32 47.40
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.80
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 11.22
Dividend per Basic Share Div per Share (Qtr) 0.00 0.71
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 10.90
Interest Coverage Int. cover (Qtr) 2.87 111.58
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 6.74 -24.93
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 18.31 61.26
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.67
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -46.11 -186.82
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -36.13 -57.93
EBIT Growth (1y) % EBIT 1y % (Qtr) -50.71 -102.26
EBT Growth (1y) % EBT 1y % (Qtr) -63.07 -299.15
EPS Growth (1y) % EPS 1y % (Qtr) -57.17 -598.34
FCF Growth (1y) % FCF 1y % (Qtr) -41.97 89.70
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -14.25 -3.62
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.35 0.88
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.13
Cash Ratio Cash Ratio (Qtr) 0.12 1.57
Current Ratio Curr Ratio (Qtr) 1.86 3.42
Debt to Equity Ratio Debt/Equity (Qtr) 1.17 0.79
Interest Cover Ratio Int Coverage (Qtr) 2.87 111.58
Times Interest Earned Times Interest Earned (Qtr) 2.87 111.58
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 9.10 3.54
EBIT Margin % EBIT Margin % (Qtr) 5.18 1.23
EBT Margin % EBT Margin % (Qtr) 3.37 -1.76
Gross Margin % Gross Margin % (Qtr) 30.40 28.65
Net Profit Margin % Net Margin % (Qtr) 2.90 -3.80