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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#2904
Positioning
Market Dominance
Retail Trade
Retail
$13.4B
David E. Rush
Builders FirstSource, Inc. manufactures and supplies building materials, manufactured components, and construction services to professional homebuilders, sub-contractors, remodelers, and consumers. The company also provides gypsum, roofing, and insulation products, including wallboards, ceilings, joint treatments, and finishes.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = BLDR ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$ARCO Arcos Dorados Holdings Inc. | 73 | 85 | 89 | 65 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$IMKTA INGLES MARKETS INC | 70 | 73 | 89 | 76 | 11.3x | 4.1x | 6.9% | 4.1% | 24.3% | 2.8% | 1.9% | -3.4% | 1.1% | 33.0x | $1.2B | VS | |
$SGU STAR GROUP, L.P. | 69 | 82 | 79 | 63 | - | - | -25.2% | -10.6% | 28.1% | -6.3% | -5.4% | -7.8% | 6.1% | 57.0x | $396M | VS | |
$EZPW EZCORP INC | 68 | 77 | 82 | 89 | 7.2x | 4.2x | 12.0% | 6.2% | 59.1% | 11.6% | 8.5% | 10.5% | 0.0% | 52.0x | $764M | VS | |
$HTHT H World Group Ltd | 68 | 91 | 44 | 84 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$DDL Dingdong (Cayman) Ltd | 68 | 86 | 82 | 57 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$SBH Sally Beauty Holdings, Inc. | 68 | 83 | 92 | 77 | 5.1x | 2.3x | 32.0% | 6.6% | 51.5% | 8.4% | 4.9% | -1.0% | 0.0% | 178.0x | $934M | VS | |
$SPH SUBURBAN PROPANE PARTNERS LP | 67 | 80 | 90 | 53 | - | 13.0x | 0.4% | -3.5% | 61.7% | 2.1% | -5.7% | 2.2% | 7.1% | 190.0x | $1.2B | VS | |
$IHG INTERCONTINENTAL HOTELS GROUP PLC /NEW/ | 67 | 63 | 81 | 67 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$ROST ROSS STORES, INC. | 67 | 63 | 55 | 83 | 25.2x | 16.5x | 34.8% | 13.3% | 28.0% | 11.6% | 9.1% | 10.4% | 1.0% | 26.0x | $51.6B | VS | |
$BLDR Builders FirstSource, Inc. | 44 | 44 | 49 | 36 | 17.8x | 10.6x | 15.8% | 6.1% | 31.1% | 7.1% | 4.2% | -11.6% | 0.0% | 158.0x | $13.4B | ||
| SECTOR BENCH | - | - | - | - | - | 21.4x | 9.1x | 9.6% | 3.6% | 37.3% | 4.4% | 2.4% | 3.7% | 0.0% | 0.7x | - | REF |
Builders FirstSource, Inc. (BLDR) receives a "Reduce" rating with a composite score of 44.4/100. It ranks #2904 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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Lagging peers — losers tend to keep underperforming
Fair valuation relative to peers
Average quality profile
Average volatility — neutral timing signal
Moderate investment profile
Mid-range overall rating
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Relative valuation derived from Retail Trade sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for BLDR.
View All Ratings| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 44 | 38 | +6ALPHA |
| MOMENTUM | 36 | 34 | +2NEUTRAL |
| VALUATION | 49 | 53 | -4NEUTRAL |
| INVESTMENT | 38 | 71 | -33DRAG |
| STABILITY | 55 | 58 | -3NEUTRAL |
| SHORT INT | 70 | 82 | -12DRAG |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC 17.1% vs WACC 8.4% (spread +8.7%)
GM 31% vs sector 37%, OM 7% vs sector 4%
Capital turnover 3.66x
Rev growth -12%, 10yr history
Interest coverage N/A, Net debt/EBITDA 5.3x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
We rate Builders FirstSource, Inc. (BLDR) as a Reduce with a composite score of 44.4/100 at a current price of $109.72. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential.
Builders FirstSource, Inc. holds a top-quartile position (#0 of 50) within the Retail Trade sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 44.4/100 places it at rank #2904 in our full universe.
Narrow
Medium
Poor
Fair Value
Returns on equity of 15.8% exceed cost of capital.
Stable competitive position in a defensive sector.
Leverage of 158% D/E amplifies downside risk.
Vulnerability to macroeconomic shocks and interest rate volatility.
Builders FirstSource, Inc. represents a reduce based on multi-factor quantitative performance.
Builders FirstSource, Inc. receives a Reduce rating from our analysis, with a composite score of 44.4/100 and 2 out of 5 stars, ranking #2904 out of 7,333 stocks. BLDR's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
BLDR's quality score of 44/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of 15.8% (sector avg: 9.6%), gross margins of 31.1% (sector avg: 37.3%), net margins of 4.2% (sector avg: 2.4%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
With a value score of 49/100, BLDR appears somewhat expensive relative to its fundamentals. Key valuation metrics include a P/E ratio of 17.76x, an EV/EBITDA of 10.61x, a P/B ratio of 2.81x. Investors paying a premium here are likely betting on above-average growth or margin expansion to justify current prices.
Builders FirstSource, Inc.'s investment score of 38/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of -11.6% vs. a sector average of 3.7% and a return on assets of 6.1% (sector: 3.6%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
BLDR is currently showing below-average momentum at 36/100, which may indicate weakening institutional interest or negative sentiment shifts. Revenue growth stands at -11.6% year-over-year, while a beta of 1.08 reflects its sensitivity to broader market moves. Investors should note that declining momentum can precede further price weakness, though contrarian opportunities sometimes emerge at these levels.
With a stability score of 55/100, BLDR exhibits average financial resilience. Key stability metrics include a beta of 1.08 and a debt-to-equity ratio of 158.00x (sector avg: 0.7x). While the balance sheet is not a major concern, the stock is subject to typical market volatility and may experience sharper drawdowns during risk-off episodes.
BLDR carries a short interest score of 70/100, indicating moderate short selling activity. This is a neutral reading — not enough to signal systemic bearishness, but worth monitoring. Specific risk factors include elevated leverage (D/E: 158.00x). At $13.4B market cap (large-cap), Builders FirstSource, Inc. offers reasonable institutional liquidity.
Builders FirstSource, Inc. is a large-cap company in the Retail Trade sector, ranked #0 of 50 in its sector (100th percentile) and #2904 of 7,333 overall (60th percentile). Key comparisons include ROE of 15.8% exceeding the 9.6% sector median and operating margins of 7.1% above the 4.4% sector average. This top-quartile standing reflects exceptional competitive strength relative to Retail Trade peers.
While BLDR currently exhibits a REDUCE profile, superior opportunities exist within the RETAIL TRADE sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Retail Trade Alpha →Quant Factor Profile
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Improvement in Momentum (36) would have the largest impact on the composite score.
EV/EBITDA 17% ABOVE SECTOR MEDIAN
ROE 65% ABOVE SECTOR MEDIAN (FAVORABLE)
Gross Margin 17% BELOW SECTOR MEDIAN
Above 50MA
37.18%
Net New Highs
+51081
The U.S. housing market shows early signs of recovery with improved builder sentiment, driven by potential Federal Reserve rate cuts and declining mortgage rates, though significant affordability challenges remain.
The Federal Reserve is expected to cut interest rates in September 2025, potentially benefiting companies in homebuilding, logistics, and construction sectors. Three firms stand out as potential beneficiaries: Builders FirstSource, PulteGroup, and GXO Logistics.
Builders FirstSource’s fourth quarter was marked by a sharp decline in sales volumes across its core markets, as the company faced persistent housing affordability challenges and weak consumer confidence. Management pointed to a steeper-than-anticipated drop in homebuilder activity late in the quarter, especially as builders pulled back on new starts to work down inventory. CEO Peter Jackson cited “ongoing housing affordability challenges, weak consumer confidence and depressed commodity prices”
Clio Asset Management completely sold its entire stake in Builders FirstSource during Q3 2025, representing a 2.7% reduction in its reportable assets. The sale comes amid ongoing housing market challenges and consecutive quarterly sales growth declines.
Warren Buffett and Stanley Druckenmiller are investing in homebuilding stocks, anticipating a potential housing market recovery as interest rates may decrease, with both buying D.R. Horton and Lennar stocks.