Bear of the Day: Builders FirstSource (BLDR)

Builders FirstSource, Inc. BLDR is caught in a four-year housing recession and is waiting for it to end. Earnings of this Zacks #5 (Strong Sell) are expected to fall another 54.3% this year.

Builders FirstSource is the largest supplier of structural building products, components and services to the professional homebuilding industry for new residential construction and repair as well as remodeling.

It operates 565 distribution and manufacturing locations in 43 states and in 91 of the top 100 Core Based Statistical Areas (CBSAs).

Builders FirstSource produces factory-built roof and floor trusses, wall panels, vinyl windows, custom millwork and trim, manufactured and semi-custom modular homes, as well as engineered wood that it designs and cuts specifically for each home. It also distributes a wide range of building products, including lumber, sheet goods, windows, doors, millwork and specialty items.

Builders FirstSource Misses on Earnings in the Second Quarter of 2026

On July 30, 2026, Builders FirstSource reported second quarter 2026 results and it missed on the Zacks Consensus by $0.12. Earnings were $1.17 versus the consensus of $1.29.

This was the company’s third earnings miss in a row.

Sales fell 8.8% year-over-year to $3.9 billion primarily due to a lower housing starts environment and related headwinds. Translation, fewer houses are being built compared to 2025.

“We remain focused on the factors within our control, including managing the business with discipline, and leveraging both our technology capabilities and our value-added solutions,” said Peter Jackson, CEO.

Housing Is Not Expected to Rebound in 2026

Builders FirstSource provided some assumptions for 2026 in terms of guidance.

Within the company’s geographies, Single Family starts are projected to be down mid- to high- single digits, Multi-Family starts are projected to be down mid-single digits, and Repair & Remodel activity is projected to be down 1%.

It guided for 2026 net sales between $14 billion and $14.8 billion. The Zacks Consensus is looking for $14.3 billion, which is a decline of 5.7% from 2025 when sales were $15.2 billion.

Analysts Cut Earnings Estimates on Builders FirstSource for 2026 and 2027

Given that the housing market is not expected to bounce back in 2026, it’s not a surprise that the analysts are cutting earnings estimates for 2026 and 2027.

Six estimates were cut in the last week for 2026 pushing the Zacks Consensus down to $3.15 from $4.13. That’s an earnings decline of 54.3% as Builders FirstSource made $6.89 in 2025.

It would also be the fourth year in a row that earnings decline, if it holds. Earnings fell 22% in 2023, 20.8% in 2024, and 40.4% in 2025.

However, for 2027, analysts see the beginning of a turnaround. While six estimates were also cut for 2027 in the last week, pushing the Zacks Consensus down to $4.28 from $5.67, that is earnings growth of 36%.

Here’s what it looks like on the 5-year price and consensus chart.

Image Source: Zacks Investment Research

Shares of Builders FirstSource Tumble to 4-Year Lows

Shares of Builders FirstSource have struggled to hold onto the big gains from the pandemic, when building was booming.

Over the last year, the shares have tumbled 45%.

Image Source: Zacks Investment Research

Are they a deal?

Builders FirstSource is still trading with a price-to-earnings (P/E) ratio of 24 because, even though the shares have fallen, so have the earnings. It’s not cheap on a P/E basis. A P/E of 15 or under usually indicates value.

Builders FirstSource is shareholder friendly. While it doesn’t pay dividends, the company has had a massive share repurchase authorization that was started in August of 2021.

Since inception of that authorization, the company has repurchased 102.6 million shares, or 49.7% of its total shares, at an average price of $81.26 for a total of $8.3 billion.

It has $500 million left on the authorization.

Many believed the housing industry would start its recovery in 2026 but it didn’t happen. For investors interested in getting in, you might want to wait for Builders FirstSource’s earnings estimates to begin to rise again.

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

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