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What's in Store for Builders FirstSource's (BLDR) Q1 Earnings?
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Builders FirstSource, Inc. (BLDR - Free Report) is scheduled to release first-quarter 2021 results on May 6, before the opening bell.
In the last reported quarter, the company delivered an earnings surprise of 37%. We note that its earnings outperformed the Zacks Consensus Estimate in the trailing five quarters, the average surprise being 45.2%.
Trend in Estimate Revision
The Zacks Consensus Estimate for first-quarter earnings is pegged at 81 cents, suggesting a rise of 138.2% from the year-ago quarter’s reported figure. Moreover, the consensus estimate for current-quarter earnings has moved up 3.8% over the past 30 days. The consensus mark for quarterly revenues is pegged at $3.79 billion, indicating 112.2% growth from the year-ago period’s reported figure.
Key Factors to Note
Builders FirstSource has been witnessing growth in value-added product volume, led by strong demand for Windows, Doors and Millwork products. The repair and remodel/other category has also been adding to the positives.
Also, 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.
Furthermore, an opportunistic approach to acquisitions is an important part of Builders FirstSource’s growth strategy. These acquisitions (like the merger with BMC) broaden the company’s product portfolio, and expand geographic footprint and market share. A resilient housing market and prudent buyouts are expected to reflect on the company’s performance for the to-be-reported quarter.
Additionally, the company is leveraging its sales growth with emphasis on cost management, operational excellence and productivity initiatives that may drive profitability in the quarter to be reported. Furthermore, Builders FirstSource is focused on investing in innovation and enhancing digital solutions for its customers. The standardization and automation processes and technology-based workflows will help minimize costs, thereby driving its bottom line, expanding margins and boosting profitability.
However, the company has been witnessing inflation related to variable costs of input that are likely to have hurt the company’s bottom line in the first quarter. It is facing supply-related challenges with respect to some of the products, including OSB, plywood, lumber and particleboard. This is likely to put pressure on margins to some extent.
Our proven model predicts an earnings beat for Builders FirstSource this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: The Earnings ESP for Builders FirstSource is +7.41%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other companies in the Zacks Construction sector, which according to our model have the right combination of elements to post earnings beat in their respective quarters to be reported.
Lowe's Companies, Inc. (LOW - Free Report) has an Earnings ESP of +2.3% and a Zacks Rank #2.
Big Lots, Inc. (BIG - Free Report) has an Earnings ESP of + 58.3% and a Zacks Rank #2.
The Home Depot, Inc. (HD - Free Report) has an Earnings ESP of +16.6% and a Zacks Rank #2.
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What's in Store for Builders FirstSource's (BLDR) Q1 Earnings?
Builders FirstSource, Inc. (BLDR - Free Report) is scheduled to release first-quarter 2021 results on May 6, before the opening bell.
In the last reported quarter, the company delivered an earnings surprise of 37%. We note that its earnings outperformed the Zacks Consensus Estimate in the trailing five quarters, the average surprise being 45.2%.
Trend in Estimate Revision
The Zacks Consensus Estimate for first-quarter earnings is pegged at 81 cents, suggesting a rise of 138.2% from the year-ago quarter’s reported figure. Moreover, the consensus estimate for current-quarter earnings has moved up 3.8% over the past 30 days. The consensus mark for quarterly revenues is pegged at $3.79 billion, indicating 112.2% growth from the year-ago period’s reported figure.
Key Factors to Note
Builders FirstSource has been witnessing growth in value-added product volume, led by strong demand for Windows, Doors and Millwork products. The repair and remodel/other category has also been adding to the positives.
Also, 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.
Furthermore, an opportunistic approach to acquisitions is an important part of Builders FirstSource’s growth strategy. These acquisitions (like the merger with BMC) broaden the company’s product portfolio, and expand geographic footprint and market share. A resilient housing market and prudent buyouts are expected to reflect on the company’s performance for the to-be-reported quarter.
Additionally, the company is leveraging its sales growth with emphasis on cost management, operational excellence and productivity initiatives that may drive profitability in the quarter to be reported. Furthermore, Builders FirstSource is focused on investing in innovation and enhancing digital solutions for its customers. The standardization and automation processes and technology-based workflows will help minimize costs, thereby driving its bottom line, expanding margins and boosting profitability.
However, the company has been witnessing inflation related to variable costs of input that are likely to have hurt the company’s bottom line in the first quarter. It is facing supply-related challenges with respect to some of the products, including OSB, plywood, lumber and particleboard. This is likely to put pressure on margins to some extent.
Builders FirstSource, Inc. Price and EPS Surprise
Builders FirstSource, Inc. price-eps-surprise | Builders FirstSource, Inc. Quote
What Our Model Indicates
Our proven model predicts an earnings beat for Builders FirstSource this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: The Earnings ESP for Builders FirstSource is +7.41%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks With Favorable Combination
Here are some other companies in the Zacks Construction sector, which according to our model have the right combination of elements to post earnings beat in their respective quarters to be reported.
Lowe's Companies, Inc. (LOW - Free Report) has an Earnings ESP of +2.3% and a Zacks Rank #2.
Big Lots, Inc. (BIG - Free Report) has an Earnings ESP of + 58.3% and a Zacks Rank #2.
The Home Depot, Inc. (HD - Free Report) has an Earnings ESP of +16.6% and a Zacks Rank #2.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
Today, Download Marijuana Moneymakers FREE >>