Irving, Texas-based Builders FirstSource, Inc. (BLDR), manufactures and supplies building materials, manufactured components, and construction services to professional homebuilders, sub-contractors, remodelers, and consumers. With a market cap of $19.2 billion, the company has approximately 570 distribution and manufacturing locations, a presence in 43 states, and 90 of the top 100 Metropolitan Statistical Areas.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and BLDR fits right into that category with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the building products & equipment industry. BLDR excels through its diversified product range, value-added services, and integrated solutions. Its wide distribution network, production capacity, strategic acquisitions, and dedication to customer service have expanded its footprint and led to customer retention.
Despite its notable strength, BLDR slipped 22.5% from its 52-week high of $214.70, achieved on Mar. 21. Over the past three months, BLDR stock dipped 9.2%, underperforming the Nasdaq Composite’s ($NASX) 12.7% gains during the same time frame.
In the longer term, shares of BLDR declined marginally on a YTD basis and climbed 7.5% over the past 52 weeks, underperforming NASX’s YTD gains of 32.7% and 35.2% returns over the last year.
To confirm the bearish trend, BLDR is trading below its 50-day moving average since late October, with slight fluctuations. The stock has been trading below its 200-day moving average recently.
BLDR’s underperformance is largely tied to the cyclical nature of residential construction volumes, which are heavily influenced by economic factors like interest rates. Additionally, the company's profitability is vulnerable to fluctuations in global raw material costs.
On Nov. 5, BLDR shares closed up by 5% after reporting its Q3 results. Its adjusted EPS of $3.07 missed Wall Street expectations of $3.09. The company’s revenue was $4.2 billion, failing to meet Wall Street forecasts of $4.5 billion. BLDR expects full-year revenue to be between $16.3 billion to $16.6 billion.
In the competitive arena of building products & equipment, Masco Corporation (MAS)has taken the lead over BLDR, showing resilience with a 17.6% uptick on a YTD basis and solid 18.8% gains over the past 52 weeks.
Wall Street analysts are bullish on BLDR’s prospects. The stock has a consensus “Strong Buy” rating from the 17 analysts covering it, and the mean price target of $208.65 suggests a potential upside of 25.4% from current price levels.
On the date of publication, Neha Panjwani 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. More news from Barchart- This Nuclear Energy Stock Doubled in 2024. Is It Too Late to Buy?
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