BLDR

Builders Firstsource Inc

Industrial/Transportation


Presented:02/02/2022
Price:$71.55
Cap:$13.70B
Current Price:$195.72
Cap:$22.79B

Presented

Date02/02/2022
Price$71.55
Market Cap$13.70B
Ent Value$13.29B
P/E Ratio9.7x
Book Value$28.14
Div Yield0%
Shares O/S191.50M
Ave Daily Vol2,816,632
Short Int3.58%

Current

Price$195.72
Market Cap$22.79B
Builders FirstSource, Inc. engages in the supply and manufacture of building materials, manufactured components and construction services to professional homebuilders, sub-contractors, remodelers and consumers. The firm operates through the following segments: Northeast, Southeast, South and West. Its products include factory-built roof and floor trusses, wall panels and stairs, vinyl windows, custom millwork and trim, as well as engineered wood. The company was founded by Kevin P. O'Meara, Donald F. McAleenan and John D. Roach in March 1998 and is headquartered in Dallas, TX.

Publicly Traded Companies Mentioned Herein: Builders FirstSource Inc (BLDR)

Highlights

The presenter is long shares of Builders FirstSource Inc (BLDR), a leading building materials distributor, viewing the company as undervalued given its potential earnings power with tailwinds in both labor and pricing. Skyrocketing lumber prices have driven earnings through the end of the year, but even as these prices stabilize, the sustainability of the company's earnings power should shine through. With a track record of accretive M&A, including $1.3B of M&A capital deployment in the last three years, management is confident in its ability to roll up the industry. These tailwinds, coupled with BLDR’s 0.8x leverage ratio (targeting 1.0x - 2.0x) and its $1.9B in FCF with 48% organic growth this past year, opens the door to a credible case for the company to rerate from ~5x EBITDA today. Taking the company’s $2.9B 2021 EBITDA and applying a 9x multiple yields a price target of $110 per share over the next couple of years, representing attractive upside from its current $70 per share.

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Idea Discussion

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