Builders FirstSource Inc. (BLDR) Shares: Cheap or Risky?

Builders FirstSource Inc. (NYSE:BLDR) saw an upside of 0.20% to close Monday at $55.20 after adding $0.11 on the day. The 5-day average trading volume is 1,372,080 shares of the company’s common stock. It has gained $56.00 in the past week. An average of 1,828,995 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 2,078,950.

BLDR’s 1-month performance is 3.24% or $1.73 on its low of $50.59 reached on 09/20/21. The company’s shares have touched a 52-week low of $29.73 and high of $55.97, with the stock’s rally to the 52-week high happening on 10/11/21. YTD, BLDR has achieved 35.26% or $14.39. However, the current price is down -1.38%% from the 52-week high price.


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Insider Transactions

On Aug 23, 50 days have gone by since the last insider trading activity for Builders FirstSource Inc. (BLDR). FARMER MICHAEL ALAN (President – Commercial Ops) most recently sold 10,000 shares at $49.76 per share on Aug 23. This transaction cost the insider $497,600. Principal Accounting Officer, Coulter Jami Lynn, sold 5,000 shares at a price of $44.47 on Mar 08. Then, on Mar 08, EVP & General Counsel Johnson Timothy D sold 10,000 shares at a price of $44.39 per share. This transaction amounted to $443,900.

Valuation Metrics

The company’s PE ratio for the last five years has touched a high of 71.97 and a low of 5.605. BLDR stock has a beta of 2.32. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 0.78 while the price-to-book (PB) in the most recent quarter is 2.09.

Builders FirstSource Inc.’s quick ratio for the period ended June 29 was 1.30, with the current ratio over the same period at 2.20 meaning that BLDR stock is able to fulfill its debt obligations. As well, the company’s long term debt to equity for the quarter ending June 29 was 0.37, while the total debt to equity was 0.37. In terms of profitability, the gross margin trailing 12 months is 26.70%. The trailing 12-month EBITDA margin is 7.72% while for the period ending June 29; Builders FirstSource Inc.’s operating margin was 8.80%. The firm’s gross profit as reported stood at $2.22 billion against revenue of $8.56 billion.

Earnings Surprise

For the quarterly period ending June 29 this year, Net income and sales went up compared to those figures reported in the previous quarter. Net income grew 65.11% to $5.58 billion, while revenue of $4.17 billion was 25.16% off the previous quarter. Analysts expected BLDR to announce $1.75 per share in earnings in its latest quarter, but it posted $2.76, representing a 57.70% surprise. EBITDA for the quarter stood at more than $807.46 million. BLDR stock balance sheet for the quarter ending June 29 shows that total liabilities totaled 5.14 billion, with total debt at $2.49 billion. Shareholders hold equity totaling $207.21 million

Technical Picture

Let’s look briefly at Builders FirstSource Inc. (BLDR) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 11 October was 64.95% to suggest the stock is trending Neutral, with historical volatility in this time period at 30.05%.

The stock’s 5-day moving average is $54.18, reflecting a +4.98% or $2.62 change from its current price. BLDR is currently trading +3.10% above its 20-day SMA, +23.71% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 and SMA200 by +24.04% and +32.82% respectively.

Stochastic %K and %D was 82.62% and 71.46% and the average true range (ATR) pointed at 1.54. The RSI (14) points at 62.11%, while the 14-day stochastic is at 82.87% with the period’s ATR at 1.52. The stock’s 9-day MACD Oscillator is pointing at 1.45 and 1.20 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Builders FirstSource Inc. (NYSE: BLDR), B. Riley Securities reiterated its a Buy rating for the company but lifted their price target by $62 to $56. Analysts offering their rating for BLDR stock have a consensus rating for the stock as Buy. Currently, 0 brokerage advisors rate BLDR as a “sell,”, while 0 advise that investors “Hold.” 0 analysts have rated the stock as underweight. 1 rates the stock as overweight while 12 have offered a “buy” rating.

What is BLDR’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $58.00 and a high of $90.00, with their median price target at $67.00. Looking at these predictions, the average price target given by analysts is for Builders FirstSource Inc. (BLDR) stock is $67.86.

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