BLDR Gears Up to Report Q1 Earnings: What's in Store for the Stock?

Builders FirstSource, Inc. BLDR is slated to report first-quarter 2025 results on May 1, before market open.

In the last reported quarter, the company’s adjusted earnings per share (EPS) surpassed the Zacks Consensus Estimate, but net sales missed the same. On a year-over-year basis, both the top and bottom lines tumbled 8% and 34.9%, respectively.

BLDR’s earnings topped the consensus mark in three of the trailing four quarters and missed on the remaining occasion, with the average surprise being 5.9%.

Trend in BLDR’s Estimates

The Zacks Consensus Estimate for the company’s first-quarter EPS has moved south to $1.50 from $1.54 in the past 30 days. The estimated figure indicates a 43.4% year-over-year decline from $2.65. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)

Builders FirstSource, Inc. Price and EPS Surprise

Builders FirstSource, Inc. price-eps-surprise | Builders FirstSource, Inc. Quote

The consensus estimate for net sales is pegged at $3.69 billion, indicating a decline of 5.3% from $3.89 billion reported in the year-ago quarter.

Factors to Shape Builders FirstSource’s Q1 Results

Revenues

Builders FirstSource’s business is primarily dependent on new residential construction as well as repair and remodeling activities. The company’s first-quarter top line is expected to have declined year over year due to continued softness in the housing market. Elevated mortgage rates and persistent inflation have impacted housing affordability. This is likely to have led to lower housing starts and reduced sales volume for the company.

In addition, unfavorable weather conditions during January and February, along with uncertainty around potential policy changes, are likely to have further weighed on performance. For the first quarter, the company expects net sales between $3.5 billion and $3.8 billion, down from $3.9 billion reported in the year-ago quarter.

That said, BLDR’s focus on strategic acquisitions, digital solutions and productivity, as well as investments in innovative and value-added products, is likely to have aided its performance to some extent.

Earnings

The bottom line of BLDR is likely to have declined year over year due to labor constraints and inflation in raw materials. BLDR is also likely to have faced reduced operating leverage and continued pressure in commodity product categories despite cost-saving efforts.

For the to-be-reported quarter, the company expects adjusted EBITDA in the range of $350-$400 million, down from $540.9 million in the year-ago quarter.

The uncertainties revolving around the housing market and the inflationary pressures are not only hurting the sales growth trend but also hurting the margins.

What the Zacks Model Predicts for BLDR

Our proven model does not conclusively predict an earnings beat for Builders FirstSource this time around. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, this is not the case here, as you will see below.

BLDR’s Earnings ESP: Builders FirstSource has an Earnings ESP of -15.43%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

BLDR’s Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With the Favorable Combination

Here are some companies in the Zacks Retail-Wholesale sector which, per our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.

CAVA Group, Inc. CAVA currently has an Earnings ESP of +0.87% and a Zacks Rank of 3.

The Zacks Consensus Estimate for first-quarter 2025 EPS is pegged at 14 cents, which implies a 16.7% increase year over year. The consensus estimate for CAVA’s quarterly revenues is pegged at $330.6 million, which indicates growth of 27.6% from the figure reported in the prior-year quarter. CAVA reported an earnings surprise of almost 62.6%, on average, in the trailing four quarters.

Jack in the Box Inc. JACK has an Earnings ESP of +0.95% and a Zacks Rank of 3 at present.

In the to-be-reported quarter, Jack in the Box earnings are expected to register an 24.7% year-over-year decrease. Jack in the Box earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 7.2%.

Deckers Outdoor Corporation DECK currently has an Earnings ESP of +8.32% and a Zacks Rank of 3.

In the to-be-reported quarter, Deckers’ earnings are expected to decrease 32.5%. Deckers’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 36.8%.

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This article originally published on Zacks Investment Research (zacks.com).

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