In the ever-changing and fiercely competitive business landscape, conducting thorough company analysis is crucial for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Builders FirstSource BLDR and its primary competitors in the Building Products industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for investors and shed light on company's performance within the industry.
Builders FirstSource Background
Builders FirstSource Inc is a manufacturer and supplier of building materials. The company offers structural and related building products such as factory-built roof and floor trusses, wall panels and stairs, vinyl windows, custom millwork and trim, and engineered wood. The products can be designed for each home individually and are installed by Builders FirstSource. The company's construction-related services include professional installation, turn-key framing and shell construction. Builders FirstSource's customers range from large production builders to small custom homebuilders.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Builders FirstSource Inc | 15.52 | 4.99 | 1.44 | 10.12% | $0.78 | $1.58 | -21.3% |
| Trane Technologies PLC | 30.36 | 8.76 | 3.52 | 9.68% | $0.95 | $1.66 | 11.69% |
| Carrier Global Corp | 34.85 | 5.70 | 2.13 | 4.98% | $0.81 | $1.43 | -0.06% |
| Johnson Controls International PLC | 20.49 | 2.25 | 1.41 | 2.24% | $0.72 | $1.99 | 0.43% |
| Lennox International Inc | 27.11 | 55.92 | 3.21 | 64.97% | $0.21 | $0.35 | -15.48% |
| Owens-Corning Inc | 12.25 | 2.78 | 1.52 | 6.66% | $0.62 | $0.73 | -1.98% |
| Advanced Drainage Systems Inc | 25.07 | 10.25 | 4.44 | 12.04% | $0.24 | $0.3 | -11.76% |
| A.O. Smith Corp | 21.77 | 6.47 | 3.15 | 7.37% | $0.2 | $0.37 | 5.4% |
| Allegion PLC | 20.65 | 9.30 | 3.19 | 13.19% | $0.22 | $0.4 | 0.46% |
| Fortune Brands Innovations Inc | 25.27 | 4.41 | 2.21 | 3.6% | $0.19 | $0.49 | -7.92% |
| Trex Co Inc | 50.50 | 14.19 | 9.02 | 9.93% | $0.1 | $0.13 | 61.21% |
| Simpson Manufacturing Co Inc | 23.05 | 4.84 | 3.68 | 3.27% | $0.07 | $0.22 | -13.51% |
| UFP Industries Inc | 13.77 | 2.49 | 0.94 | 4.45% | $0.21 | $0.36 | -21.32% |
| The AZEK Co Inc | 58.19 | 4.93 | 4.96 | 1.84% | $0.09 | $0.09 | 11.18% |
| AAON Inc | 38.40 | 9.37 | 5.85 | 7.16% | $0.08 | $0.12 | 28.59% |
| Zurn Elkay Water Solutions Corp | 56.36 | 3.57 | 3.85 | 0.86% | $0.05 | $0.16 | 4.85% |
| Armstrong World Industries Inc | 20.92 | 7.89 | 3.67 | 12.06% | $0.13 | $0.14 | 6.86% |
| CSW Industrials Inc | 36.40 | 5.98 | 4.54 | 1.57% | $0.03 | $0.07 | 2.26% |
| Griffon Corp | 49.67 | 12.16 | 1.35 | 14.05% | $0.1 | $0.24 | 0.28% |
| Hayward Holdings Inc | 42.26 | 2.19 | 2.98 | 0.92% | $0.04 | $0.11 | -10.18% |
| Gibraltar Industries Inc | 27.62 | 2.92 | 1.94 | 4.51% | $0.06 | $0.11 | -0.14% |
| Resideo Technologies Inc | 15.48 | 0.96 | 0.41 | 0.79% | $0.07 | $0.42 | -3.96% |
| PGT Innovations Inc | 21.53 | 3.64 | 1.64 | 5.99% | $0.08 | $0.16 | 3.65% |
| Tecnoglass Inc | 11.47 | 4.47 | 2.72 | 9.23% | $0.07 | $0.09 | 4.44% |
| Average | 29.71 | 8.06 | 3.14 | 8.75% | $0.23 | $0.44 | 2.39% |
Upon closer analysis of Builders FirstSource, the following trends become apparent:
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A Price to Earnings ratio of 15.52 significantly below the industry average by 0.52x suggests undervaluation. This can make the stock appealing for those seeking growth.
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The current Price to Book ratio of 4.99, which is 0.62x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
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With a relatively low Price to Sales ratio of 1.44, which is 0.46x the industry average, the stock might be considered undervalued based on sales performance.
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The company has a higher Return on Equity (ROE) of 10.12%, which is 1.37% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $780 Million is 3.39x above the industry average, highlighting stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $1.58 Billion, which indicates 3.59x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of -21.3% is significantly below the industry average of 2.39%. This suggests a potential struggle in generating increased sales volume.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to equity.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
By analyzing Builders FirstSource in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
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When considering the debt-to-equity ratio, Builders FirstSource exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.85, which can be perceived as a positive aspect by investors.
Key Takeaways
The valuation analysis for Builders FirstSource in the Building Products industry indicates that the company has a low PE ratio, suggesting that its stock price is relatively low compared to its earnings. The low PB ratio indicates that the company's stock is undervalued based on its book value. The low PS ratio suggests that the company's stock is trading at a lower price relative to its sales. On the other hand, the high ROE, EBITDA, gross profit, and low revenue growth indicate that Builders FirstSource is performing well compared to its peers in terms of profitability and operational efficiency.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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