Fact based stock research
Builders FirstSource (NasdaqGS:BLDR)
US12008R1077
How to read the free ranks
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 14 (worse than 86% 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 14 (worse than 86% of alternatives), show below-average growth (Growth Rank of 40), and are riskily financed (Safety Rank of 45), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 14, 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 14), low growth (Obermatt Growth Rank of 40), and risky financing practices (Obermatt Safety Rank of 45), 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 |
19-Dec-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 |
|
14 |
|
| GROWTH | ||||||||
| GROWTH | 88 |
|
61 |
|
35 |
|
40 |
|
| SAFETY | ||||||||
| SAFETY | 51 |
|
8 |
|
36 |
|
45 |
|
| 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 14 (worse than 86% 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 14 (worse than 86% of alternatives), show below-average growth (Growth Rank of 40), and are riskily financed (Safety Rank of 45), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 14, 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 14), low growth (Obermatt Growth Rank of 40), and risky financing practices (Obermatt Safety Rank of 45), 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 |
|
14 |
|
| GROWTH | ||||||||
| GROWTH | 88 |
|
61 |
|
35 |
|
40 |
|
| SAFETY | ||||||||
| SAFETY | 51 |
|
8 |
|
36 |
|
45 |
|
| COMBINED | ||||||||
| COMBINED | 75 |
|
14 |
|
6 |
|
14 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 14 (worse than 86% 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 69, which means that the stock price compared with what market professionals expect for future profits is lower than for 69% of comparable companies, indicating a good value concerning Builders FirstSource's profit levels. But Price-to-Sales is 48 which means that the stock price compared with what market professionals expect for future profits is higher than for 52% 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 21 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 14, 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 |
|
48 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 74 |
|
80 |
|
56 |
|
69 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 32 |
|
44 |
|
20 |
|
21 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 1 |
|
1 |
|
1 |
|
1 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 49 |
|
39 |
|
11 |
|
14 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 40 (better than 40% 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. While Sales Growth ranks at 54, professionals currently expect the company to grow more than 54% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 23, which means that, currently, professionals expect the company to grow its profits less than 77% of its competitors, and Capital Growth has a low rank of 44. Historic stock returns were also below average with a current Stock Returns rank of 46 which means that the stock returns have recently been below 54% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 40, is a hold recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. 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 isn't stellar here. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 100 |
|
9 |
|
37 |
|
54 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 82 |
|
94 |
|
15 |
|
23 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
13 |
|
14 |
|
44 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 70 |
|
93 |
|
100 |
|
46 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 88 |
|
61 |
|
35 |
|
40 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 45 (better than 45% 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 77, meaning the company generates more profit to service its debt than 77% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 22, 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 78% of its competitors. Leverage is also high at a rank of 39, which means that the company has an above-average debt-to-equity ratio. It has more debt than 61% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 45 (worse than 55% 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 |
|
39 |
|
| REFINANCING | ||||||||
| REFINANCING | 58 |
|
27 |
|
17 |
|
22 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 49 |
|
42 |
|
71 |
|
77 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 51 |
|
8 |
|
36 |
|
45 |
|
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 December 19, 2024.
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