The construction products and supplier and manufacturer is down -1.2% to $7.29 in early trading on Thursday.
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TheStreet Ratings team rates BUILDERS FIRSTSOURCE as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate BUILDERS FIRSTSOURCE (BLDR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, generally higher debt management risk and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 5.5%. Since the same quarter one year prior, revenues slightly increased by 8.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- BUILDERS FIRSTSOURCE reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BUILDERS FIRSTSOURCE continued to lose money by earning -$0.44 versus -$0.58 in the prior year. This year, the market expects an improvement in earnings ($0.41 versus -$0.44).
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The debt-to-equity ratio is very high at 28.11 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, BLDR's quick ratio is somewhat strong at 1.36, demonstrating the ability to handle short-term liquidity needs.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Building Products industry and the overall market, BUILDERS FIRSTSOURCE's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: BLDR Ratings Report