BLDR
IndustrialsBuilders FirstSource
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XBRL · SEC EDGAR2009–2025(17yr)| Metric | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $677.9M | $700.3M | $779.1M | $1.1B | $1.5B | $1.6B | $3.6B | $6.4B | $7.0B | $7.7B | $7.3B | $8.6B | $19.9B | $22.7B | $17.1B | $16.4B | $15.2B | -7.4% |
| Gross Profit | $142.4M | $131.8M | $157.9M | $214.6M | $319.9M | $357.0M | $901.5M | $1.6B | $1.7B | $1.9B | $2.0B | $2.2B | $5.9B | $7.7B | $6.0B | $5.4B | $4.6B | -14.3% |
| Gross Margin | 21.0% | 18.8% | 20.3% | 20.0% | 21.5% | 22.3% | 25.3% | 25.1% | 24.6% | 24.9% | 27.2% | 26.0% | 29.4% | 34.1% | 35.2% | 32.8% | 30.4% | -2.4pp |
| Operating Income | -$60.7M | -$63.7M | -$37.5M | -$8.7M | $48.0M | $50.0M | $90.6M | $236.3M | $285.1M | $369.0M | $392.3M | $543.9M | $2.4B | $3.8B | $2.2B | $1.6B | $786.3M | -50.7% |
| Operating Margin | -8.9% | -9.1% | -4.8% | -0.8% | 3.2% | 3.1% | 2.5% | 3.7% | 4.1% | 4.8% | 5.4% | 6.4% | 12.0% | 16.6% | 12.7% | 9.7% | 5.2% | -4.6pp |
| Net Income | -$61.9M | -$95.5M | -$65.0M | -$56.9M | -$42.7M | $18.1M | -$22.8M | $144.3M | $38.8M | $205.2M | $221.8M | $313.5M | $1.7B | $2.7B | $1.5B | $1.1B | $435.2M | -59.6% |
| Net Margin | -9.1% | -13.6% | -8.3% | -5.3% | -2.9% | 1.1% | -0.6% | 2.3% | 0.6% | 2.7% | 3.0% | 3.7% | 8.7% | 12.1% | 9.0% | 6.6% | 2.9% | -3.7pp |
| Free Cash Flow | -$4.8M | -$50.7M | -$71.2M | -$77.2M | -$62.6M | $1.8M | $133.2M | $115.6M | $116.1M | $181.4M | $391.2M | $148.0M | $1.5B | $3.3B | $1.8B | $1.5B | $853.3M | -42.8% |
| FCF Margin | -0.7% | -7.2% | -9.1% | -7.2% | -4.2% | 0.1% | 3.7% | 1.8% | 1.7% | 2.3% | 5.4% | 1.7% | 7.6% | 14.3% | 10.7% | 9.1% | 5.6% | -3.5pp |
| EPS (Diluted) | — | $-0.99 | $-0.67 | $-0.60 | $-0.44 | $0.18 | $-0.22 | $1.27 | $0.34 | $1.76 | $1.90 | $2.66 | $8.48 | $16.82 | $11.94 | $9.06 | $3.89 | -57.1% |
1. THE BIG PICTURE
Builders FirstSource is attempting to transform from a traditional lumber yard into a high-tech, integrated construction partner, but this strategy is currently colliding with a harsh housing downturn. While its national scale and digital tools are meant to provide a "moat," the business remains fundamentally tethered to the volatile price of wood and the volume of new home starts, both of which are currently trending in the wrong direction.
2. WHERE THE RISKS HIT HARDEST
The "national manufacturing footprint" that Builders FirstSource cites as a competitive advantage (10-K Item 1) is increasingly becoming a liability as "core organic net sales" fell by 14.0% in the most recent quarter (8-K). Because Builders FirstSource carries substantial fixed costs to maintain its 585 locations, even modest declines in builder activity "significantly impair financial condition" (10-K Item 1A). Furthermore, the push into "value-added products" is frequently offset by commodity price volatility; lumber and sheet goods still represent 26% of total sales, meaning a price drop outside of management's control can erase the margin gains achieved through proprietary software or framing solutions (10-K Item 1A).
3. WHAT THE NUMBERS SAY TOGETHER
The financial data reveals a business that is shrinking faster than its peers while using debt-funded buybacks to support its stock price. While Builders FirstSource leads its peer group with a 5.4% buyback yield, it ranks last in revenue growth (-7.4%) and net margin (4.3%) (XBRL). This suggests that the "productivity savings" of $15 million reported in the fourth quarter are being overwhelmed by the 12.1% drop in total net sales (8-K). The divergence between Builders FirstSource's TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth (-7.4%) and the most recent quarter's organic decline (-14.0%) indicates that the downturn in single-family and multi-family starts is accelerating rather than stabilizing. Short interest stands at 5.7% of the float (Yahoo Finance), suggesting a notable segment of the market remains skeptical of a near-term recovery in housing starts.
4. IS IT WORTH IT AT THIS PRICE?
At 12.2x forward earnings, Builders FirstSource trades at a 37% discount to the peer median of 19.3x (Yahoo Finance). This deep discount is justified by Builders FirstSource's inferior margin profile—its 7.2% operating margin is the lowest in the peer group and less than half that of competitors like Pentair or Lennox (XBRL).
At the current price, the market is pricing in approximately 4.9% long-term growth (CAPM analysis). While Builders FirstSource’s implied EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric growth of 10.3% looks healthy, more than half of that figure is derived from share retirement rather than business expansion. If growth slows to a GDP-pace of 2.5%, the justified multiple would fall to 9.4x, representing significant downside (CAPM analysis). Investors are essentially betting that the "fortress balance sheet" cited by management can withstand a $4.2 billion net debt load until the housing cycle turns (8-K).
5. WHAT WOULD CHANGE THIS VIEW?
- Constructive if the 2026 free cash flow exceeds the current guidance of $0.5 billion, signaling that digital initiatives like Paradigm are successfully decoupling profits from lumber price swings (8-K).
- Cautious if the net debt-to-FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders leverage ratio climbs above the current 3.0x level, which would limit Builders FirstSource's ability to continue the buybacks that currently underpin its valuation (CAPM analysis).
6. BOTTOM LINE
Structural Advantage: A dominant national footprint combined with proprietary digital framing and design integration through the Paradigm subsidiary.
Bottom Line: This is a high-leverage bet on a residential housing recovery that is currently being offset by weak organic growth and heavy commodity exposure.
1. Top 5 Material Risks
- Cyclical Industry Dependence: Builders FirstSource is highly sensitive to residential homebuilding activity, which is influenced by interest rates, housing inventory, and consumer confidence. Because Builders FirstSource carries substantial fixed costs, even modest declines in customer production levels can significantly impair financial condition and cash flows.
- Commodity Price Volatility: Lumber and lumber sheet goods accounted for 26% of total net sales in 2025. Significant declines in the prices of these products, which are outside Builders FirstSource's control, can negatively impact sales and profits.
- Competitive Pricing Pressure: The building supply industry is highly fragmented. Builders FirstSource faces pressure from national chains, large retailers, and direct-to-builder sales by manufacturers. If Builders FirstSource cannot maintain costs or prices at competitive levels, its operating results will suffer.
- Strategic Growth and Integration: Builders FirstSource’s long-term strategy relies on acquisitions and the implementation of new technology, including a new ERP system. Failure to successfully integrate acquired businesses or realize the benefits of technology investments could lead to impairment charges and operational disruptions.
- Customer Concentration: The ten largest customers generated 14% of net sales in 2025. The loss of any significant customer or a reduction in their purchasing volume could materially affect Builders FirstSource's financial health.
2. Company-Specific Risks
- ERP Implementation: Builders FirstSource is in the process of implementing a new ERP system to manage manufacturing, supply chain, and financial reporting. A prolonged delay or failure in this multi-year project could disrupt operations and adversely affect internal controls over financial reporting.
- Lease Obligations: Most facilities are occupied under long-term, non-cancelable leases. If Builders FirstSource closes or idles a facility, it remains liable for rent, insurance, and taxes for the remainder of the lease term, which typically ranges from five to 15 years.
- Capital Deployment: Builders FirstSource has repurchased approximately $8.0 billion of its shares since January 2021. An inability to effectively deploy excess capital through organic growth or acquisitions could constrain future earnings and return on equity.
- Artificial Intelligence Risks: Early-stage integration of AI for productivity and data analytics presents risks related to accuracy errors, cybersecurity vulnerabilities, and potential regulatory or reputational damage if outputs are found to be biased or deficient.
3. Regulatory/Legal Risks
- Construction Defect Claims: Builders FirstSource is involved in known and threatened construction defect legal claims and asbestos personal injury suits related to legacy businesses.
- Environmental Liability: As an owner and lessee of real property, Builders FirstSource can be held liable for the investigation or remediation of contamination, regardless of whether it was responsible for the condition.
- Fleet Safety: Operating a large commercial fleet exposes Builders FirstSource to material economic damages from safety incidents, with the risk of large jury verdicts in the transportation sector.
- Tax Audits: Builders FirstSource is subject to ongoing tax audits in various jurisdictions; the resolution of these audits could result in payments materially different from current provisions, impacting net income.
4. Financial Impact Map
Cyclical Industry Dependence → Operating Results and Cash Flows → Substantial fixed costs amplify the impact of modest declines in customer production. Commodity Price Volatility → Net Sales and Profits → Lumber and lumber sheet goods represented 26% of total net sales in 2025. Competitive Pricing Pressure → Gross Margins → Inability to pass on price increases for lumber, wood products, or labor costs to customers. Strategic Growth and Integration → Goodwill and Intangible Assets → Potential impairment charges if acquisitions fail to meet performance expectations or integration is unsuccessful. Customer Concentration → Net Sales → The ten largest customers accounted for 14% of net sales in 2025.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 8-K | Feb 2026 | — |
| 10-K | Feb 2026 | Dec 2025 |
| 14A | Apr 2025 | — |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
Stifel cuts Builders FirstSource price target to $93 from $115 on growth caution
- ▸Stifel lowers BLDR price target to $93 from $115, maintains Hold rating
- ▸Analyst cites caution regarding required growth acceleration and flat 2026 housing starts
- ▸Q4 revenue $3.36B, down 12.1% YoY, missing estimates by $99.15M
- ▸Q4 EPS $1.12, missing consensus estimates by $0.16
- ▸FY26 net sales guidance range set at $14.8B to $15.8B
Builders FirstSource projects 2026 net sales between $14.8B and $15.8B
- ▸Projected 2026 net sales range of $14.8B to $15.8B
- ▸Zero shares repurchased in Q4 2025 under May 2025 buyback program
- ▸Analyst consensus fair value target adjusted to $126.24
- ▸RBC Capital upgraded stock to Outperform from Sector Perform
- ▸Stifel cut price target to $93 from $115 citing housing market headwinds
Builders FirstSource Q4 EPS $1.12 misses estimates by 14%, revenue falls 12% YoY
- ▸Q4 adjusted EPS $1.12, missing consensus estimate of $1.30 by 13.9%
- ▸Q4 net sales $3.36B, down 12.1% YoY and missing $3.44B estimate
- ▸Core organic net sales declined 14% YoY
- ▸Gross margin contracted 250 bps to 29.8%
- ▸Single-family and multi-family organic sales fell 15.4% and 20.4% respectively
Builders FirstSource Q4 Net Sales $3.36B, Net Income Falls to $31.5M Amid Housing Headwinds
- ▸Q4 net sales $3,357.9 million
- ▸Q4 net income $31.5 million
- ▸Performance impacted by weaker housing demand and reduced operating leverage
- ▸Long-term 2028 projections target $16.4 billion revenue and $684.5 million earnings
- ▸Analyst fair value estimates range up to 47% upside from current price