Builders FirstSource’s first quarter results were met with a negative market reaction, reflecting investor concerns about continued sales declines and margin pressure. Management attributed the 6% year-on-year revenue decrease to persistent softness in single-family and multifamily housing starts, as well as commodity deflation and severe weather disruptions. CEO Peter Jackson highlighted, “Our team’s ability to drive resilient results, despite external headwinds, reflects our focus on execution, operational rigor and customer success.” The quarter was further shaped by normalization in margins following heightened levels during recent industry upswings, with operating margin dropping to 5%.
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Builders FirstSource (BLDR) Q1 CY2025 Highlights:
- Revenue: $3.66 billion vs analyst estimates of $3.67 billion (6% year-on-year decline, in line)
- Adjusted EPS: $1.51 vs analyst estimates of $1.42 (6.4% beat)
- Adjusted EBITDA: $369.2 million vs analyst estimates of $377.5 million (10.1% margin, 2.2% miss)
- The company dropped its revenue guidance for the full year to $16.55 billion at the midpoint from $17 billion, a 2.6% decrease
- EBITDA guidance for the full year is $1.9 billion at the midpoint, below analyst estimates of $2.04 billion
- Operating Margin: 5%, down from 9.6% in the same quarter last year
- Market Capitalization: $12.82 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Builders FirstSource’s Q1 Earnings Call
- Matthew Bouley (Barclays) pressed on the balance between market share and margin discipline. CEO Peter Jackson stated that management is "always trying to increase our share" but acknowledged competitive pressures require daily trade-offs.
- Michael Dahl (RBC Capital Markets) questioned how the company will manage leverage and capital allocation given earnings compression and large share repurchases. CFO Pete Beckmann emphasized a commitment to a 1–2x leverage target and disciplined capital deployment.
- Charles Perron-Piche (Goldman Sachs) asked about the impact of higher lumber prices and digital adoption rates. Management noted that commodity price movements have mixed effects and reported ongoing positive feedback and adoption for digital tools.
- Keith Hughes (Truist Securities) inquired about the decline in value-added products and the outlook for stabilization in multifamily. Management explained that the multifamily headwind is expected to flatten out by the end of the year.
- Philip Ng (Jefferies) focused on the ability to pass through tariff costs and the timing of these impacts. Management stated the intention to pass on costs but acknowledged market dynamics and inventory lags may delay full realization.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) signs of stabilization or improvement in single-family and multifamily housing starts, (2) the ability to sustain margin discipline amid competitive and tariff-related pressures, and (3) continued progress toward digital sales adoption and integration of recent acquisitions. Execution against these priorities, alongside management’s capital allocation decisions, will be key indicators of Builders FirstSource’s ability to navigate a challenging market environment.
Builders FirstSource currently trades at $115.52, down from $119.33 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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