Builders FirstSource (BLDR) Outperforms Broader Market: What You Need to Know

In the latest close session, Builders FirstSource (BLDR) was up +1.75% at $85.41. This change outpaced the S&P 500's 0.54% gain on the day. Meanwhile, the Dow experienced a rise of 0.66%, and the technology-dominated Nasdaq saw an increase of 0.77%.

Shares of the construction supply company have depreciated by 23.47% over the course of the past month, underperforming the Retail-Wholesale sector's loss of 4.96%, and the S&P 500's loss of 4.71%.

Market participants will be closely following the financial results of Builders FirstSource in its upcoming release. It is anticipated that the company will report an EPS of $0.45, marking a 70.2% fall compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $3.17 billion, indicating a 13.31% downward movement from the same quarter last year.

BLDR's full-year Zacks Consensus Estimates are calling for earnings of $5.85 per share and revenue of $14.97 billion. These results would represent year-over-year changes of -15.09% and -1.44%, respectively.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Builders FirstSource. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.84% lower. Builders FirstSource is currently a Zacks Rank #3 (Hold).

Investors should also note Builders FirstSource's current valuation metrics, including its Forward P/E ratio of 14.35. This expresses no noticeable deviation compared to the average Forward P/E of 14.35 of its industry.

It is also worth noting that BLDR currently has a PEG ratio of 2.03. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Building Products - Retail industry was having an average PEG ratio of 1.28.

The Building Products - Retail industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 235, positioning it in the bottom 5% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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