Is Builders FirstSource, Inc. (BLDR) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $65.97, Builders FirstSource, Inc. (BLDR) sits inside our range of estimates: our valuation lenses put the business somewhere between $54.41 and $104.38 per share. For a cyclical we value through the cycle we publish a range only (peer multiples and our researched mid-cycle DCF): where in the cycle the business sits decides where in that range it lands, and a single figure would claim we know that precisely. This is an educational model, not a price target or a recommendation.
The valuation discounts Builders FirstSource, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 9.4%, with a long-run terminal growth rate of 2.5%. About 80% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, BLDR's modeled DCF value ranges from about $28.80 to $109.15 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Builders FirstSource, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of BLDR's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind BLDR's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $15,190,600,000 | Builders FirstSource FY2025 10-K (accession 0001193125-26-054643, filed 2026-02-17) + SEC companyfacts: Net sales $15,190.6M (us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax), down 7.4% from $16,400.5M in FY2024 and 33% below the FY2022 peak of $22,726.4M. The 10-K blames 'decreased single-family housing starts and decreased multi-family activity' plus lumber 'commodity price deflation', partly offset by acquisitions ($1,123M spent on deals in 2025). CROSS-CHECK: H1 2026 net sales $7,149.6M were 9.4% below H1 2025 ($7,891.6M); TTM to 2026-06-30 is $14,448.7M. The base is therefore NOT a trough - 2026 is lower again (see forecast). |
| Base EBIT margin | 5.2% | Builders FirstSource FY2025 10-K (accession 0001193125-26-054643, filed 2026-02-17) + SEC companyfacts: GAAP income from operations $786.3M / net sales $15,190.6M = 5.18% (us-gaap:OperatingIncomeLoss). It is AFTER $297.2M of acquired-intangible amortization (mostly the 2021 BMC merger; kept in EBIT - see da_pct_revenue), ~$53.5M of stock compensation and ~$100M+ of ERP 'technology implementation expense' that management excludes from Adjusted EBITDA. History on the same tag: 5.4% FY2019 and 6.4% FY2020 (legacy BLDR, before the BMC merger), 12.0% FY2021, 16.6% FY2022, 12.7% FY2023, 9.7% FY2024, 5.2% FY2025. CROSS-CHECK: H1 2026 GAAP operating income was $145.0M on $7,149.6M (2.0%), and Q2 2026 3.3% - the margin is still falling, gross margin down 260bp in Q2 to 28.1%. |
| Forecast revenue growth | -6% → 2% → 5% → 5% → 4% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. Shared by every model in this tracker. For a homebuilder supplier it bites twice: it sets the discount rate and it drives the ~6.7% mortgage rates that hold single-family starts down. |
| Beta | 1.45 | Yahoo Finance 5Y-monthly beta via yfinance, read 2026-10-06: Published 5Y-monthly beta 1.448, used AS IS - no normalization, the same policy as Masco (1.294) and CRH (1.191) in this tracker. Plausible for a lumber-exposed distributor of new-construction materials carrying 3.6x net leverage. Cost of equity 5.24% + 1.448 x 5% = 12.48%. Each 0.1 of beta moves the value ~$4.10-4.50/share (1.348 gives ~$58.91; 1.548 ~$50.27); today's price needs ~1.42. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability. Applied to 2030 - a year modelled as mid-recovery, not peak - so it neither capitalizes a boom nor a trough. BLDR's own long-run record mixes acquisition-led growth (sales $7.3B FY2019 -> $15.2B FY2025, mostly the BMC merger) with sharp lumber and starts cycles; 2.5% assumes no further structural share gain. 3.0% adds ~$6.45/share; 2.0% takes ~$5.55 off. |
| Diluted shares | 108M | Builders FirstSource Q2 2026 10-Q (accession 0001193125-26-325451, filed 2026-07-30) Note 4 (EPS): Q2 2026 weighted-average diluted shares 107,564K. Because Q2 was a net loss, diluted equals basic: 1,265K antidilutive and contingent RSUs were excluded (in Q2 2025, dilutive awards added 274K). Including ~0.3M dilutive awards would take ~$0.15/share off - immaterial. 107,596,457 shares were outstanding on 2026-07-23. THE COUNT HAS STOPPED FALLING: BLDR retired ~50% of its shares since 2021 ($8.3B at an average $81.26), and bought 3.3M more in Q1 2026 at ~$92, but bought back only ~$3.5M in Q2 as leverage rose to 3.6x; $500M of authorization remains. |
| Market price | $65.97 | Delayed quote · as of 2026-11-10 05:27 UTC |
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Most undervalued stocks (per our valuation) · Undervalued Industrials stocks · All valued stocks · Interactive BLDR valuation & downloadable modelTickerWorth is an educational DCF tool, not a licensed investment adviser. Figures are estimates derived from public filings and market data and can be wrong.