Builders FirstSource, Inc. (BLDR)
Quantitative Summary
DeterministicAt 29.1x earnings — a 35% discount to the sector average of 44.7x — BLDR is in the lower valuation range. Financial health is average: Piotroski 5/9, Altman Z 2.6. DCF fair value of $29 implies 67% downside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics of Builders FirstSource reveal a capital allocation profile characterized by modest efficiency relative to its cost of equity, with an ROIC of 6.4% suggesting limited value creation potential in the current cycle. The DuPont decomposition highlights that returns are driven primarily by asset turnover at 1.35x rather than operational leverage or margin expansion, as net margins remain compressed at 2.9%. Despite a Piotroski F-Score of 5/9 indicating moderate financial strength and a Beneish M-Score of -2.83 signaling low earnings manipulation risk, the trajectory is concerning given revenue contraction of 7.4% year-over-year; this decline in top-line growth exerts downward pressure on asset efficiency despite stable gross margins near 30.4%.
Valuation metrics present a significant divergence between current pricing and intrinsic value estimates derived from discounted cash flow analysis. Trading at 21.9x earnings, the stock is priced substantially below the sector average of 45.2x, yet this discount appears disconnected from its DCF-implied fair value of $33 if growth assumptions align with broader market expectations for industrial recovery. The current multiple suggests the market may be pricing in prolonged stagnation or further deterioration, failing to fully account for potential mean reversion in revenue trends that could support a higher terminal growth rate and compress the valuation gap toward sector norms.
Insider activity over the past 90 days shows $4.38 million in net buying, which contrasts with the negative revenue momentum and offers a data point on management's view of future cash flow generation. However, without explicit guidance revisions or positive Fama-French alpha adjustments to offset the declining turnover ratio, the risk-reward profile remains ambiguous. The combination of shrinking revenues and an ROIC that barely exceeds typical hurdle rates creates uncertainty regarding whether the current valuation discount reflects a temporary cyclical dip or a structural shift in the company's ability to generate sustainable free cash flow from its asset base.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of -7% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 9.3% | 11.3% | 13.3% |
|---|---|---|---|
| 2% | $40 | $24 | $14 |
| 3% | $49 | $29 | $17 |
| 4% | $62 | $36 | $21 |
Center = base case. Green = >10% upside, Red = >10% downside vs $75.37.
Pre-computed DCF: WACC=11.3%, terminal growth 3%. Fair value $29 (-66.6%). Not investment advice.
Valuation Context
Currently trading 23% below its 5-year average P/E of 28.6x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedBuilders FirstSource currently trades at $70.41 within the Industrials sector, presenting a scenario where technical positioning must be weighed against inherent market volatility. The proximity of current pricing to recent lows suggests that any upward movement may face immediate resistance from short-term profit-taking or lack of broad-based capital inflow in this specific segment. Without visible support levels significantly below the present price, the asset exhibits characteristics often associated with fragile momentum rather than a robust structural trend; investors might observe whether subsequent trading days can sustain volume above current averages to validate any potential reversal. The fundamental backdrop for industrial contractors typically involves sensitivity to interest rate fluctuations and housing starts, which introduces an external layer of risk that technical charts alone cannot fully capture. If the broader market environment remains uncertain, BLDR's ability to break through key resistance zones could be compromised by macroeconomic headwinds rather than company-specific strength. Consequently, the current setup appears more defensive in nature, where price stability depends heavily on external catalysts such as sector rotation or a shift in economic data that favors capital goods spending. Ultimately, the interplay between the current valuation and historical volatility patterns indicates that momentum is likely conditional rather than entrenched. Traders monitoring this instrument should remain vigilant for signs of increased buying pressure that can overcome existing supply-side constraints at these price levels. Until such confirmation emerges, the risk dynamics suggest a cautious approach where potential gains are balanced against the possibility of further consolidation or minor declines driven by broader market sentiment shifts affecting the industrials
Quant Health Deep Dive
Profitability & Value Creation
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XHB or VFQY, the fund manager is mechanically forced to buy or sell BLDR shares regardless of Builders FirstSource, Inc.'s individual fundamentals. We estimate $1.1B of passive capital is structurally linked to BLDR through 8 tracked ETFs. Index rebalances and ETF creation/redemption cycles can create noticeable volume spikes unrelated to company news.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Builders FirstSource, Inc. to visualize passive redemption contagion across ETFs and collateral stocks.
If Builders FirstSource, Inc. (BLDR) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies CATERPILLAR INC (CAT) as the most exposed collateral stock, sharing 1 ETFs with BLDR. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 24 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
BLDR Ownership Dynamics
Passive funds hold 1 in every 8 BLDR shares, reducing daily market volatility.
Builders FirstSource, Inc. (BLDR) exerts measurable gravity on the passive index market, currently representing 2.9% of the XHB (XHB) and 0.2% of the VFQY (VFQY). Across 26 tracked ETFs, approximately 14M shares (12.7% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest BLDR Exposure
Float lock-up computed from 26 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
BLDR Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Builders FirstSource, Inc. over the past year sits near $127.40 (10% of 252-day volume). The current price of $75.37 sits 40.8% below the POC — suggesting potential mean-reversion upside if institutional demand reasserts at this level.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
BLDR Capital Efficiency
How efficiently does Builders FirstSource, Inc. convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Builders FirstSource, Inc. converts 62% of its EBITDA into free cash flow, an exceptional conversion rate indicating an asset-light business model with minimal capital reinvestment drag. However, the ROIC-WACC spread is negative (-4.9%), suggesting reinvested capital is destroying shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-13 | 4,277 | $72.78 | $311,280.06 |
| 2026-04-29 | 539 | $88.12 | $47,496.68 |
| 2026-04-23 | 60 | $90.63 | $5,437.8 |
| 2026-04-20 | 15,136 | $88.50 | $1.3M |
| 2026-04-16 | 124 | $85.13 | $10,556.12 |
| 2026-04-15 | 366 | $87.77 | $32,123.82 |
| 2026-04-14 | 686 | $87.53 | $60,045.58 |
| 2026-04-13 | 505 | $85.30 | $43,076.5 |
| 2026-04-08 | 530 | $78.93 | $41,832.9 |
| 2026-04-06 | 143,770 | $79.12 | $11.4M |
| 2026-03-25 | 11 | $83.94 | $923.34 |
| 2026-03-24 | 9 | $84.66 | $761.94 |
| 2026-03-23 | 1,118 | $81.22 | $90,803.96 |
| 2026-03-13 | 6 | $86.60 | $519.6 |
| 2026-02-11 | 8,822 | $128.42 | $1.1M |
| 2026-02-02 | 56 | $114.40 | $6,406.4 |
| 2026-01-21 | 33,438 | $122.52 | $4.1M |
| 2026-01-20 | 3,088 | $126.79 | $391,527.52 |
| 2026-01-15 | 304 | $126.38 | $38,419.52 |
| 2026-01-09 | 403 | $111.29 | $44,849.87 |
| 2025-12-26 | 27 | $104.03 | $2,808.81 |
| 2025-12-22 | 7,276 | $103.79 | $755,176.04 |
| 2025-12-11 | 2,359 | $109.58 | $258,499.22 |
| 2025-12-01 | 100 | $112.23 | $11,223 |
| 2025-10-29 | 831 | $119.35 | $99,179.85 |
| 2025-10-24 | 100 | $124.20 | $12,420 |
| 2025-10-16 | 14 | $126.29 | $1,768.06 |
| 2025-10-15 | 63 | $128.09 | $8,069.67 |
| 2025-10-02 | 7,266 | $126.74 | $920,892.84 |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| MTH | 0.783 | 0.777 | High co-movement |
| KBH | 0.752 | 0.716 | High co-movement |
| BLD | 0.747 | 0.713 | High co-movement |
| PHM | 0.745 | 0.748 | High co-movement |
| TOL | 0.743 | 0.727 | High co-movement |
| MAS | 0.732 | 0.718 | High co-movement |
| TMHC | 0.730 | 0.721 | High co-movement |
| LEN | 0.725 | 0.679 | High co-movement |
| OC | 0.717 | 0.705 | High co-movement |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare BLDR to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.