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Builders FirstSource (BLDR) Buys Trussway, Expands in Multifamily
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Builders FirstSource, Inc. (BLDR - Free Report) continues its acquisition spree with its latest Trussway buyout. However, the terms of the transaction have been kept under wraps.
Shares of Builders FirstSource gained by a meager 0.3% during yesterday’s trading session but slipped 1.2% during the after-hour trading session on Sep 1, 2022.
Trussway is one of the leading providers of pre-fabricated roof and floor trusses and value-added building components and services. It provides roof and floor truss offerings to multifamily clients, thereby enhancing Builders FirstSource’s value-added portfolio and accelerating growth.
Based in Houston, Trussway, with annualized revenues of $340 million, serves more than 340 customer accounts in the United States. Trussway has a unique innovative in-house estimating, design and engineering approach that will complement Builders FirstSource. Notably, Builders FirstSource has also acquired Trussway’s integrated network of six strategically located manufacturing facilities across the country.
Strategic Acquisitions
Acquisitions are an important part of Builders FirstSource growth strategy to supplement its organic growth and expand extensively across vast geographic boundaries. Notably, net sales for second-quarter 2022 were $6.9 billion, a 24.2% increase from a year ago. Core organic sales increased by 12.2%, acquisitions contributed net sales growth of 8.1% and commodity price inflation contributed 3.9%.
The company expects acquisitions that have been completed within the last 12 months to add net sales growth of 6% to 7%.
Among the latest buyouts, on Apr 1, 2022, the company made two transactions to acquire Texas Panel Truss Businesses and Valley Truss Co., Inc. for $169.4 million in cash and $31.2 million in cash, respectively.
On Jul 1, it made a tuck-in acquisition of HomCo Lumber and Hardware. HomCo is a highly-profitable distributor in the attractive Flagstaff, AZ market, with low customer concentration and a diverse product mix. HomCo generated approximately $44 million in sales in 2021.
The price performance was backed by a solid earnings surprise history. The company's earnings surpassed the Zacks Consensus Estimate in the trailing 16 quarters. Earnings estimates for 2022 have moved higher to $15.34 per share from $12.61 over the past 30 days, depicting analysts’ optimism over BLDR’s prospects. The company currently has a VGM Score of A, supported by a Value, Growth and Momentum Score of A each.
Key Picks
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Tecnoglass Inc. (TGLS - Free Report) , Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) and Arcos Dorados Holdings Inc. (ARCO - Free Report) .
Tecnoglass sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 24.4%, on average. Shares of the company have declined 1.4% in the past year.
The Zacks Consensus Estimate for Tecnoglass 2022 sales and earnings per share (EPS) suggests growth of 28.2% and 47.7%, respectively, from the year-ago period’s levels.
Cracker Barrel carries a Zacks Rank #2 (Buy). Cracker Barrel has a long-term earnings growth of 6.9%. Shares of the company have decreased 24% in the past year.
The Zacks Consensus Estimate for Cracker Barrel’s 2022 sales and EPS suggests growth of 16.3% and 15.4%, respectively, from the year-ago period’s levels.
Arcos Dorados carries a Zacks Rank #2. Arcos Dorados has a long-term earnings growth of 34.4%. Shares of the company have risen 31.3% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2022 sales and EPS suggests growth of 27.1% and 104.2%, respectively, from the year-ago period’s levels.
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Builders FirstSource (BLDR) Buys Trussway, Expands in Multifamily
Builders FirstSource, Inc. (BLDR - Free Report) continues its acquisition spree with its latest Trussway buyout. However, the terms of the transaction have been kept under wraps.
Shares of Builders FirstSource gained by a meager 0.3% during yesterday’s trading session but slipped 1.2% during the after-hour trading session on Sep 1, 2022.
Trussway is one of the leading providers of pre-fabricated roof and floor trusses and value-added building components and services. It provides roof and floor truss offerings to multifamily clients, thereby enhancing Builders FirstSource’s value-added portfolio and accelerating growth.
Based in Houston, Trussway, with annualized revenues of $340 million, serves more than 340 customer accounts in the United States. Trussway has a unique innovative in-house estimating, design and engineering approach that will complement Builders FirstSource. Notably, Builders FirstSource has also acquired Trussway’s integrated network of six strategically located manufacturing facilities across the country.
Strategic Acquisitions
Acquisitions are an important part of Builders FirstSource growth strategy to supplement its organic growth and expand extensively across vast geographic boundaries. Notably, net sales for second-quarter 2022 were $6.9 billion, a 24.2% increase from a year ago. Core organic sales increased by 12.2%, acquisitions contributed net sales growth of 8.1% and commodity price inflation contributed 3.9%.
The company expects acquisitions that have been completed within the last 12 months to add net sales growth of 6% to 7%.
Among the latest buyouts, on Apr 1, 2022, the company made two transactions to acquire Texas Panel Truss Businesses and Valley Truss Co., Inc. for $169.4 million in cash and $31.2 million in cash, respectively.
On Jul 1, it made a tuck-in acquisition of HomCo Lumber and Hardware. HomCo is a highly-profitable distributor in the attractive Flagstaff, AZ market, with low customer concentration and a diverse product mix. HomCo generated approximately $44 million in sales in 2021.
Share Price Performance
Image Source: Zacks Investment Research
Shares of this Zacks Rank #3 (Hold) manufacturer and supplier of building materials have gained 7.9% over a year versus the industry’s 8.6% decline and the Zacks Retail-Wholesale sector’s 25.3% fall. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The price performance was backed by a solid earnings surprise history. The company's earnings surpassed the Zacks Consensus Estimate in the trailing 16 quarters. Earnings estimates for 2022 have moved higher to $15.34 per share from $12.61 over the past 30 days, depicting analysts’ optimism over BLDR’s prospects. The company currently has a VGM Score of A, supported by a Value, Growth and Momentum Score of A each.
Key Picks
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Tecnoglass Inc. (TGLS - Free Report) , Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) and Arcos Dorados Holdings Inc. (ARCO - Free Report) .
Tecnoglass sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 24.4%, on average. Shares of the company have declined 1.4% in the past year.
The Zacks Consensus Estimate for Tecnoglass 2022 sales and earnings per share (EPS) suggests growth of 28.2% and 47.7%, respectively, from the year-ago period’s levels.
Cracker Barrel carries a Zacks Rank #2 (Buy). Cracker Barrel has a long-term earnings growth of 6.9%. Shares of the company have decreased 24% in the past year.
The Zacks Consensus Estimate for Cracker Barrel’s 2022 sales and EPS suggests growth of 16.3% and 15.4%, respectively, from the year-ago period’s levels.
Arcos Dorados carries a Zacks Rank #2. Arcos Dorados has a long-term earnings growth of 34.4%. Shares of the company have risen 31.3% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2022 sales and EPS suggests growth of 27.1% and 104.2%, respectively, from the year-ago period’s levels.