Builders FirstSource Q4 sales miss due to commodity deflation

Overview

• Building materials supplier's Q4 net sales fell 12.1%, missing analyst expectations

• Adjusted EPS for Q4 missed analyst expectations

• Company attributes sales decline to below-normal starts environment and commodity deflation

Outlook

• Company projects 2026 net sales between $14.8 bln and $15.8 bln

• Builders FirstSource expects 2026 adjusted EBITDA between $1.3 bln and $1.7 bln

• Company anticipates 2026 free cash flow of approximately $0.5 bln

Result Drivers

• BELOW-NORMAL STARTS - Co attributed 12.1% decrease in net sales to a below-normal starts environment, impacting core organic net sales

• COMMODITY DEFLATION - Commodity deflation contributed to net sales decline, offset partially by acquisition growth

• GROSS MARGIN DECLINE - Gross profit margin decreased by 250 basis points to 29.8%, driven by below-normal starts environment

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 10 "strong buy" or "buy", 13 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the construction supplies & fixtures peer group is "buy."

• Wall Street's median 12-month price target for Builders FirstSource Inc is $136.50, about 19% above its February 13 closing price of $114.73

• The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 18 three months ago

Press Release: ID:nBw60y5Ksa

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