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Monday, November 30, 2020

Builders FirstSource Inc. (NASDAQ:BLDR) Recent Earnings Shows Major Concern

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Builders FirstSource Inc. (BLDR) shares are trading at lower $31.69 and the avg recommendation for the stock is Strong Buy, while the current analyst price target stands at $34.18.

To add more color to this target, the company’s high over the last year is $34.69 and the low is $9.00. Over the last 52 weeks, BLDR is up 38.26% while the S&P 500 is up 12.53%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, BLDR reported a profit of $517.33 million. Builders FirstSource Inc. also saw revenues increase to $1.95 billion. In addition, BLDR has free cash flow of $115.08 million as of 06-2020. The company’s EBITDA came in at $158.63 million which compares well with its peers.

BLDR booked profit margins of 2.80%, its Return on Equity (ROE) is 24.70%, and its Return on Assets is 6.00%. All told, it is clear that, BLDR needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. BLDR has a short ratio of 4.61 and outstanding shares of 116.63M.

Company Outlook

BLDR has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 1.3 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 1.77. Builders FirstSource Inc. BLDR also noted assets of $3.76 billion at the end of the last quarter. Investors should also keep an eye on sector updates as BLDR has historically followed its peers on positive news.

All told, Builders FirstSource Inc. BLDR has strung together solid data and demonstrated underlying fundamentals. At its current valuation, BLDR represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Builders FirstSource Inc. BLDR is now commanding a market cap of 3.65B and a float of 114.69M. BLDR is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of BLDR stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in BLDR, either long or short, and we have not been compensated for this article.

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