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What to Expect From Builders FirstSource (BLDR) Q4 Earnings

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Builders FirstSource, Inc. (BLDR - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 26, before the opening bell.

In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 30.2% but revenues missed the same by 0.9%. On a year-over-year basis, its earnings and revenues grew 13.9% and 15.9%, respectively.

Builders FirstSource’s earnings topped the consensus mark in all the last four quarters, with the average being 53.5%.

Trend in Estimate Revision

The Zacks Consensus Estimate for earnings for the quarter to be reported has been unchanged at 91 cents per share over the past 30 days. The figure indicates a 127.5% increase from the year-ago earnings of 40 cents per share. The consensus mark for revenues is $2.69 billion, suggesting 52.7% year-over-year growth.

Builders FirstSource, Inc. Price and EPS Surprise

Builders FirstSource, Inc. Price and EPS Surprise

Builders FirstSource, Inc. price-eps-surprise | Builders FirstSource, Inc. Quote

Factors to Note

Builders FirstSource’s earnings and sales are expected to have increased in the fourth quarter. As the company’s performance is highly influenced by the housing market, solid momentum of the same is expected to benefit the upcoming results. Solid demand for new housing across the United States is likely to have helped it support the entire mix of businesses to some extent. Accelerating demand, disciplined market pricing and solid execution are expected to reflect on the company’s upcoming results. It expects core organic revenue growth to be up in mid-to-high single digit percentage year over year.

Furthermore, an opportunistic approach to acquisitions is an important part of Builders FirstSource’s growth strategy. These acquisitions broaden the company’s product portfolio, and expand geographic footprint and market share. Resilient housing market and prudent buyouts are expected to reflect on the company’s performance for the to-be-reported quarter.

However, commodity cost inflation is expected to have weighed on margins to some extent. Also, a shift in product mix toward its lower-margin commodity products owing to commodity inflation may have added to the woes. The company expects commodity revenue inflation of 25-35% for the fourth quarter. It also expects gross margin to be in line with the third-quarter level of 24.9%.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Builders FirstSource this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Worth a Look

Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Installed Building Products, Inc. (IBP - Free Report) has an Earnings ESP of +4.24% and holds a Zacks Rank #3.

Masonite International Corporation (DOOR - Free Report) has an Earnings ESP of +2.09% and a Zacks Rank #2.

Floor & Decor Holdings, Inc. (FND - Free Report) has an Earnings ESP of +9.02% and carries a Zacks Rank #2.

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