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Builders FirstSource, Inc. (BLDR): A Bull Case Theory

By Ricardo Pillai | August 04, 2025, 3:29 PM

We came across a bullish thesis on Builders FirstSource, Inc. on Darius Dark Investing’s Substack. In this article, we will summarize the bulls’ thesis on BLDR. Builders FirstSource, Inc.'s share was trading at $135.63 as of July 28th. BLDR’s trailing and forward P/E were 17.39 and 16.86, respectively according to Yahoo Finance.

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A crane carrying heavy building materials, representing the robust civil engineering products of the company.

Builders FirstSource (BLDR), the largest supplier of structural building products and value-added services in the U.S., stands out for its integrated model, spanning lumber, engineered wood, and specialty materials, alongside custom fabrication and installation services that together represent nearly half of revenue. These high-margin offerings create deeper customer ties and insulate earnings from pure commodity price swings.

With 590 locations across 43 states, BLDR’s reach across homebuilders, commercial contractors, and remodelers provides resilience and purchasing power in a fragmented market. However, the backdrop remains challenging: U.S. housing faces affordability constraints from ~7% mortgage rates, tight inventories, and uneven construction activity, with single-family starts expected to rise modestly in 2025 even as multifamily softens.

BLDR’s Q1 2025 results reflected these pressures, with sales down 6% year-over-year to $3.7 billion, adjusted EBITDA contracting 31.7% to $369 million, and free cash flow plunging to $45 million. Guidance for 2025 implies EBITDA margins of 10.6–12.3% with acquisitions driving most top-line growth, underscoring ongoing organic headwinds. Management remains focused on a long-term strategy anchored in digital transformation, with myBLDR.com processing over $1.5 billion in orders and 42% of 2024 volume already digital, aiming to embed BLDR into customer workflows.

Aggressive M&A, such as the $828 million acquisitions of Alpine Lumber and O.C. Cluss, and an $8 billion buyback program that retired nearly half the share base since 2021, reinforce confidence in cash deployment. Trading at 12.7–13.8× earnings, BLDR’s valuation reflects cyclical risks yet offers upside if digital adoption, value-added growth, and capital returns offset housing headwinds, making the stock appealing for patient investors.

Previously, we covered a bullish thesis on Carlisle Companies Incorporated (CSL) by Max Dividends in April 2025, highlighting its dominance in commercial construction materials, operational resilience, and Vision 2030 growth targets. The stock has appreciated about 12.66% since our coverage, as the modernization cycle supports demand. The thesis still stands on solid fundamentals. Darius Dark shares a similar view but stresses BLDR’s integrated model, digital expansion, and capital allocation.

Builders FirstSource, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 58 hedge fund portfolios held BLDR at the end of the first quarter which was 59 in the previous quarter. While we acknowledge the potential of BLDR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. 

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