Update shared on 13 Nov 2025
Fair value Decreased 2.65%Analysts have reduced their price target for Builders FirstSource by $7, citing stabilizing margins and signs of a bottoming market. They continue to maintain a positive outlook for eventual recovery.
Analyst Commentary
Bullish analysts see both challenges and opportunities for Builders FirstSource as the company navigates a stabilizing market environment. Despite the downward revision of the price target, several themes have emerged from recent commentary.
Bullish Takeaways- Margins appear to be stabilizing, suggesting that the company's operational discipline is offsetting competitive pressures for now.
- The current valuation, at roughly 11 times expected 2026 EV/EBITDA, is viewed as attractive, particularly at the market’s cyclical low.
- Fundamental trends are showing signs of bottoming with potential for meaningful improvement as the broader market recovers.
- Bears expect the stock to find technical and fundamental support around the $100 level. This may limit further downside risk.
- Ongoing competitive pressures may cap margin expansion in the near term, despite recent stabilization.
- Visibility on a significant recovery remains limited due to broader market uncertainties. Strong execution from management would be required to capitalize on any upturn.
- While valuation is attractive relative to mid-cycle norms, it could reflect risk if recovery is delayed or fundamentals falter further.
What's in the News
- Builders FirstSource is actively seeking acquisitions to expand value-added product offerings and strengthen its leadership position in key markets. CEO Peter Jackson emphasized flexibility to pursue M&A, invest in organic growth, and return capital to shareholders (Key Developments).
- The company announced two acquisitions in the Las Vegas area: Builder's Door & Trim and Rystin Construction. This marks an entry into that region's millwork market and enhances its comprehensive solutions for customers (Key Developments).
- Builders FirstSource provided earnings guidance for 2025, expecting net sales to range from $15.1 billion to $15.4 billion (Key Developments).
- No shares were repurchased during the most recent buyback tranche, completing this portion of the previously announced buyback program (Key Developments).
Valuation Changes
- Fair Value Estimate has decreased modestly from $139.02 to $135.33 per share.
- Discount Rate has risen slightly, moving from 9.10 percent to 9.47 percent.
- Revenue Growth projection has more than doubled, increasing from 0.48 percent to 1.11 percent.
- Net Profit Margin is up slightly, from 4.20 percent to 4.33 percent.
- Future P/E ratio has declined modestly, shifting from 25.80x to 24.86x.
Disclaimer
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