Fact based stock research
Builders FirstSource (NasdaqGS:BLDR)
US12008R1077
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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Builders FirstSource stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 12 (worse than 88% compared with investment alternatives), Builders FirstSource (Building Products, USA) shares have lower financial characteristics compared with similar stocks. Shares of Builders FirstSource are low in value (priced high) with a consolidated Value Rank of 11 (worse than 89% of alternatives), show below-average growth (Growth Rank of 41), and are riskily financed (Safety Rank of 44), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 12, is a sell recommendation based on Builders FirstSource's financial characteristics. As the company Builders FirstSource's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 11), low growth (Obermatt Growth Rank of 41), and risky financing practices (Obermatt Safety Rank of 44), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | USA |
| Industry | Building Products |
| Index | NASDAQ, S&P MIDCAP |
| Size class | XX-Large |
14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Builders FirstSource
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 49 |
|
39 |
|
11 |
|
11 |
|
| GROWTH | ||||||||
| GROWTH | 88 |
|
61 |
|
35 |
|
41 |
|
| SAFETY | ||||||||
| SAFETY | 51 |
|
8 |
|
36 |
|
44 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
83 |
|
95 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
35 |
|
29 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 12 (worse than 88% compared with investment alternatives), Builders FirstSource (Building Products, USA) shares have lower financial characteristics compared with similar stocks. Shares of Builders FirstSource are low in value (priced high) with a consolidated Value Rank of 11 (worse than 89% of alternatives), show below-average growth (Growth Rank of 41), and are riskily financed (Safety Rank of 44), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 12, is a sell recommendation based on Builders FirstSource's financial characteristics. As the company Builders FirstSource's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 11), low growth (Obermatt Growth Rank of 41), and risky financing practices (Obermatt Safety Rank of 44), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 49 |
|
39 |
|
11 |
|
11 |
|
| GROWTH | ||||||||
| GROWTH | 88 |
|
61 |
|
35 |
|
41 |
|
| SAFETY | ||||||||
| SAFETY | 51 |
|
8 |
|
36 |
|
44 |
|
| COMBINED | ||||||||
| COMBINED | 75 |
|
14 |
|
6 |
|
12 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 11 (worse than 89% compared with alternatives), Builders FirstSource shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Builders FirstSource. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 73, which means that the stock price compared with what market professionals expect for future profits is lower than for 73% of comparable companies, indicating a good value concerning Builders FirstSource's profit levels. But Price-to-Sales is 46 which means that the stock price compared with what market professionals expect for future profits is higher than for 54% of comparable companies, indicating a low value concerning Builders FirstSource's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 14 and for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 11, is a sell recommendation based on Builders FirstSource's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then Builders FirstSource is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 79 |
|
61 |
|
46 |
|
46 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 74 |
|
80 |
|
56 |
|
73 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 32 |
|
44 |
|
20 |
|
14 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 1 |
|
1 |
|
1 |
|
1 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 49 |
|
39 |
|
11 |
|
11 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 41 (better than 41% compared with alternatives), Builders FirstSource shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Builders FirstSource. Sales Growth has a below market rank of 47, which means that, currently, professionals expect the company to grow less than 53% of its competitors. The same is valid for Capital Growth, with a rank of 48, and Profit Growth, with a rank of 22. Currently, professionals expect the company to grow its profits less than 78% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 71, which means that the stock returns have recently been above 71% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 41, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Builders FirstSource, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 100 |
|
9 |
|
37 |
|
47 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 82 |
|
94 |
|
15 |
|
22 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
13 |
|
14 |
|
48 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 70 |
|
93 |
|
100 |
|
71 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 88 |
|
61 |
|
35 |
|
41 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 44 (better than 44% compared with alternatives), the company Builders FirstSource has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Builders FirstSource is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Builders FirstSource. Liquidity is at 75, meaning the company generates more profit to service its debt than 75% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 23, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 77% of its competitors. Leverage is also high at a rank of 38, which means that the company has an above-average debt-to-equity ratio. It has more debt than 62% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 44 (worse than 56% compared with alternatives), Builders FirstSource has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 36 |
|
18 |
|
44 |
|
38 |
|
| REFINANCING | ||||||||
| REFINANCING | 58 |
|
27 |
|
17 |
|
23 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 49 |
|
42 |
|
71 |
|
75 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 51 |
|
8 |
|
36 |
|
44 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
92 |
|
75 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
18 |
|
69 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
73 |
|
85 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
64 |
|
68 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
83 |
|
95 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for Builders FirstSource from November 14, 2024.
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