Is Builders FirstSource (BLDR) Stock Undervalued Right Now?

BLDR

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Builders FirstSource (BLDR - Free Report) . BLDR is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 12.63. This compares to its industry's average Forward P/E of 17.08. Over the last 12 months, BLDR's Forward P/E has been as high as 14.88 and as low as 3.62, with a median of 6.82.

Finally, our model also underscores that BLDR has a P/CF ratio of 5.44. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 12.44. Over the past 52 weeks, BLDR's P/CF has been as high as 5.70 and as low as 2.57, with a median of 3.45.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Builders FirstSource is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BLDR feels like a great value stock at the moment.

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