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Why Is Builders FirstSource (BLDR) Down 24% Since Last Earnings Report?
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A month has gone by since the last earnings report for Builders FirstSource (BLDR - Free Report) . Shares have lost about 24% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Builders FirstSource due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.
Builders FirstSource's Q4 Earnings & Sales Lag, Margins Down Y/Y
Builders FirstSource delivered tepid fourth-quarter 2025 results, with adjusted earnings and net sales missing the Zacks Consensus Estimate and declining on a year-over-year basis.
The quarterly performance reflects hurdles faced due to the weak housing market. Slow housing starts due to ongoing affordability challenges pulled back the quarter’s growth, with deflated commodity prices adding to the headwinds.
However, BLDR’s efforts in supply-chain optimization and operational excellence aided its bottom-line growth. Going forward, the company expects to continue investing in enhancing its capabilities and expanding its geographic footprint to manage near-term uncertainties and offer long-term value to the shareholders.
BLDR’s Q4 Earnings & Revenue Discussion
The company reported adjusted earnings per share of $1.12, which missed the Zacks Consensus Estimate of $1.30 by 13.9% and declined 51.5% year over year, owing to lower adjusted net income, partially offset by share repurchases.
Net sales of $3.36 billion missed the consensus mark of $3.44 billion by 2.3% and fell 12.1% on a year-over-year basis. Core organic net sales declined 14% from the prior-year quarter, with a commodity deflation of 1.9%. These declines were partially offset by 3.8% year-over-year growth from acquisitions.
Core organic net sales in Single-Family and Multi-Family decreased 15.4% and 20.4%, respectively. In Repair and Remodel (R&R)/Other, the metric also declined 6.5%. On a weighted basis, net sales in Single-Family, Multi-Family and R&R/Other declined 10.3%, 2.4% and 1.3%, respectively.
Builders FirstSource’s Sales per Product Category
Value-Added Products: In the fourth quarter, net sales of value-added products (comprising 48.3% of the quarterly net sales) were $1.62 billion, down 15% from the prior year.
Within this product category, sales from Manufactured products totaled $749.9 million and Windows, doors & millwork were $873.7 million, down year over year by 17.6% and 12.6%, respectively.
Specialty Building Products & Services: Net sales from this product category (comprising 27.6% of the quarterly net sales) declined 2.1% from the year-ago quarter to $923.5 million.
Lumber & Lumber Sheet Goods: For the quarter, this product category’s net sales (comprising 24.1% of the quarterly net sales) decreased 16.1% year over year to $810.8 million.
Operating Highlights of BLDR
Gross margin of 29.8% contracted 250 basis points (bps) due to a below-normal housing starts environment. As a percentage of net sales, adjusted selling, general and administrative expenses increased 370 bps to 28%, mainly due to reduced operating leverage.
Adjusted EBITDA fell 44.3% on a year-over-year basis to $274.9 million. Adjusted EBITDA margin also contracted 470 bps year over year to 8.2%, owing to lower gross profit margins and reduced operating leverage.
In 2025, BLDR delivered approximately $48 million in productivity savings, with about $15 million of productivity savings delivered in the fourth quarter related to operational excellence and supply-chain initiatives.
Glance at Builders FirstSource’s 2025
During the year, Builders FirstSource’s net sales were down year over year by 7.4% to $15.19 billion, with core organic net sales down 10.3%.
Gross margin was down 240 bps to 30.4% and adjusted EBITDA margin was 10.4%, decreasing 380 bps year over year.
Adjusted EPS was $6.89, down 40.4% year over year from $11.56 reported in 2024.
Financial Details of BLDR
As of 2025, Builders FirstSource had cash and cash equivalents of $181.8 million, up from $153.6 million at 2024-end. The company had liquidity of approximately $1.7 billion as of Dec. 31, 2025, including $1.5 billion in net borrowing available under the revolving credit facility.
Long-term debt (net of current portion, discounts and issuance costs) was $4.43 billion, up from $3.7 billion at 2024-end. As of 2025-end, the net debt to trailing 12-month adjusted EBITDA ratio was 2.7x compared with 1.5x in the prior year.
During 2025, net cash from operations was $1.22 billion compared with $1.87 billion a year ago. Free cash flow was $874 million as of the fourth quarter-end, down from $1.51 billion a year ago.
In 2025, BLDR repurchased 3.4 million shares of its common stock at an average price of $118.65 per share for $0.4 billion.
Builders FirstSource Reveals 2026 Outlook
For 2026, the company expects net sales between $14.8 billion and $15.8 billion. Acquisitions completed within the last 12 months are projected to contribute about 1% to net sales growth. There are no changes in selling days in 2026 compared with 2025.
Single-Family and Multi-Family starts are expected to remain flat year over year. R&R activity is anticipated to be up 1% compared with the previous year.
Gross margin is expected to be in the range of 28.5-30%. Adjusted EBITDA is expected to be between $1.3 billion and $1.7 billion, with adjusted EBITDA margin projected within the range of 8.8-10.8%.
For 2026, BLDR expects to deliver $50-$70 million in productivity savings.
Free cash flow is expected to be approximately $0.5 billion, assuming average commodity prices in the range of $365-$385 per thousand board foot (mbf).
The company expects interest expense in the range of $270-$280 million and total capital expenditures within $250-$300 million. Depreciation and amortization expenses are estimated to be between $525 million and $575 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -30.29% due to these changes.
VGM Scores
At this time, Builders FirstSource has a subpar Growth Score of D, a score with the same score on the momentum front. However, the stock has a score of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Builders FirstSource has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Builders FirstSource (BLDR) Down 24% Since Last Earnings Report?
A month has gone by since the last earnings report for Builders FirstSource (BLDR - Free Report) . Shares have lost about 24% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Builders FirstSource due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.
Builders FirstSource's Q4 Earnings & Sales Lag, Margins Down Y/Y
Builders FirstSource delivered tepid fourth-quarter 2025 results, with adjusted earnings and net sales missing the Zacks Consensus Estimate and declining on a year-over-year basis.
The quarterly performance reflects hurdles faced due to the weak housing market. Slow housing starts due to ongoing affordability challenges pulled back the quarter’s growth, with deflated commodity prices adding to the headwinds.
However, BLDR’s efforts in supply-chain optimization and operational excellence aided its bottom-line growth. Going forward, the company expects to continue investing in enhancing its capabilities and expanding its geographic footprint to manage near-term uncertainties and offer long-term value to the shareholders.
BLDR’s Q4 Earnings & Revenue Discussion
The company reported adjusted earnings per share of $1.12, which missed the Zacks Consensus Estimate of $1.30 by 13.9% and declined 51.5% year over year, owing to lower adjusted net income, partially offset by share repurchases.
Net sales of $3.36 billion missed the consensus mark of $3.44 billion by 2.3% and fell 12.1% on a year-over-year basis. Core organic net sales declined 14% from the prior-year quarter, with a commodity deflation of 1.9%. These declines were partially offset by 3.8% year-over-year growth from acquisitions.
Core organic net sales in Single-Family and Multi-Family decreased 15.4% and 20.4%, respectively. In Repair and Remodel (R&R)/Other, the metric also declined 6.5%. On a weighted basis, net sales in Single-Family, Multi-Family and R&R/Other declined 10.3%, 2.4% and 1.3%, respectively.
Builders FirstSource’s Sales per Product Category
Value-Added Products: In the fourth quarter, net sales of value-added products (comprising 48.3% of the quarterly net sales) were $1.62 billion, down 15% from the prior year.
Within this product category, sales from Manufactured products totaled $749.9 million and Windows, doors & millwork were $873.7 million, down year over year by 17.6% and 12.6%, respectively.
Specialty Building Products & Services: Net sales from this product category (comprising 27.6% of the quarterly net sales) declined 2.1% from the year-ago quarter to $923.5 million.
Lumber & Lumber Sheet Goods: For the quarter, this product category’s net sales (comprising 24.1% of the quarterly net sales) decreased 16.1% year over year to $810.8 million.
Operating Highlights of BLDR
Gross margin of 29.8% contracted 250 basis points (bps) due to a below-normal housing starts environment. As a percentage of net sales, adjusted selling, general and administrative expenses increased 370 bps to 28%, mainly due to reduced operating leverage.
Adjusted EBITDA fell 44.3% on a year-over-year basis to $274.9 million. Adjusted EBITDA margin also contracted 470 bps year over year to 8.2%, owing to lower gross profit margins and reduced operating leverage.
In 2025, BLDR delivered approximately $48 million in productivity savings, with about $15 million of productivity savings delivered in the fourth quarter related to operational excellence and supply-chain initiatives.
Glance at Builders FirstSource’s 2025
During the year, Builders FirstSource’s net sales were down year over year by 7.4% to $15.19 billion, with core organic net sales down 10.3%.
Gross margin was down 240 bps to 30.4% and adjusted EBITDA margin was 10.4%, decreasing 380 bps year over year.
Adjusted EPS was $6.89, down 40.4% year over year from $11.56 reported in 2024.
Financial Details of BLDR
As of 2025, Builders FirstSource had cash and cash equivalents of $181.8 million, up from $153.6 million at 2024-end. The company had liquidity of approximately $1.7 billion as of Dec. 31, 2025, including $1.5 billion in net borrowing available under the revolving credit facility.
Long-term debt (net of current portion, discounts and issuance costs) was $4.43 billion, up from $3.7 billion at 2024-end. As of 2025-end, the net debt to trailing 12-month adjusted EBITDA ratio was 2.7x compared with 1.5x in the prior year.
During 2025, net cash from operations was $1.22 billion compared with $1.87 billion a year ago. Free cash flow was $874 million as of the fourth quarter-end, down from $1.51 billion a year ago.
In 2025, BLDR repurchased 3.4 million shares of its common stock at an average price of $118.65 per share for $0.4 billion.
Builders FirstSource Reveals 2026 Outlook
For 2026, the company expects net sales between $14.8 billion and $15.8 billion. Acquisitions completed within the last 12 months are projected to contribute about 1% to net sales growth. There are no changes in selling days in 2026 compared with 2025.
Single-Family and Multi-Family starts are expected to remain flat year over year. R&R activity is anticipated to be up 1% compared with the previous year.
Gross margin is expected to be in the range of 28.5-30%. Adjusted EBITDA is expected to be between $1.3 billion and $1.7 billion, with adjusted EBITDA margin projected within the range of 8.8-10.8%.
For 2026, BLDR expects to deliver $50-$70 million in productivity savings.
Free cash flow is expected to be approximately $0.5 billion, assuming average commodity prices in the range of $365-$385 per thousand board foot (mbf).
The company expects interest expense in the range of $270-$280 million and total capital expenditures within $250-$300 million. Depreciation and amortization expenses are estimated to be between $525 million and $575 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -30.29% due to these changes.
VGM Scores
At this time, Builders FirstSource has a subpar Growth Score of D, a score with the same score on the momentum front. However, the stock has a score of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Builders FirstSource has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.