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yesterday

Bullish Thesis Flags Upside for Builders FirstSource on Scale and Offsite Strategy

Modeling normalized margins with housing starts yields a $155–$185 value range versus a price in the $130s–$140s.

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Overview

  • A ValueInvestorsClub analysis by John Kimble, summarized by Insider Monkey and Yahoo Finance, outlines a bullish case for BLDR.
  • Builders FirstSource reported $16.4 billion in 2024 net sales with roughly 71% tied to new single‑family homes.
  • The thesis credits past roll‑ups, including BLDR+ProBuild and BMC+SBS, with creating synergies, local pricing power, and margin durability.
  • Offsite assembly and value‑added services help address labor constraints and capture about 10% of the materials cost per new single‑family home.
  • Assumptions include normalized EBITDA margins of roughly 11–11.5% and 4–5% annual inorganic growth from tuck‑in deals, with catalysts from homebuilding activity, interest‑rate relief, and further M&A offset by housing‑cycle and rate risks.