Builders FirstSource Inc. (BLDR) Sees After-Hours Surge: Examining Potential Drivers

Builders FirstSource Inc. (BLDR) showcased a strong after-hours performance, with its stock price reaching $170.00, representing a substantial gain of 6.12 points or 3.73% compared to its previous closing value. The trading volume in the after-hours session hit 35.99K, indicating notable investor interest in the company’s stocks.

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This significant uptick in BLDR’s stock price suggests that investors may respond positively to recent developments or news related to the company. It remains to be seen whether this momentum will carry forward into the regular trading session.

Recent Developments

On December 5, 2023, it was disclosed that Builders FirstSource, Inc. (NYSE: BLDR) had scheduled its 2023 Investor Day in Atlanta, commencing at 8:30 a.m. EST and expected to conclude around 11:30 a.m. EST.

Furthermore, on November 1, 2023, Builders FirstSource, Inc. (NYSE: BLDR) disclosed its financial performance for the third quarter, ending on September 30, 2023. Key highlights from the quarter, when compared to the same period the prior year, include:

  • Net sales totaling $4.5 billion, marking a 21.3% decrease, primarily attributed to a softer housing market and commodity price deflation. However, this decline was partially offset by growth resulting from acquisitions.
  • A slight reduction of 10 basis points in the gross profit margin percentage, settling at 34.9%. This dip was mainly due to the normalization of core organic margins but was partially offset by the strength observed in the Multi-Family sector.
  • Net income experienced a significant decrease of 38.8%, reaching $451.5 million, equivalent to $3.59 per diluted share, compared to $4.72 in the corresponding period of the previous year. Adjusted net income also witnessed a drop of 34.4%, reaching $533.6 million, or $4.24 per diluted share, compared to $5.20 in the prior year. These figures translate to declines of 23.9% and 18.5% in net income and adjusted net income per diluted share, respectively.
  • A notable decrease of 30.6% in adjusted EBITDA, totaling $813.3 million, primarily driven by reduced net sales. The adjusted EBITDA margin also contracted by 240 basis points to 17.9%, primarily due to lower net sales and reduced operating leverage.
  • Cash generated from operating activities amounted to $649.5 million, representing a decrease of $851.3 million compared to the corresponding period in the prior year. Additionally, free cash flow reached $537.8 million, down by $879.4 million compared to the previous year.
  • The company maintained a strong quarter-end balance sheet, with liquidity of $1.1 billion and a net debt to LTM Adjusted EBITDA ratio of 1.1x.
  • During the quarter, Builders FirstSource, Inc. repurchased 1.7 million shares of common stock at an average price of $136.22, totaling $224.9 million, inclusive of fees and taxes. Year-to-date, the company has repurchased 16.2 million shares of its common stock at an average price of $97.43 per share, amounting to $1.6 billion, inclusive of fees and taxes. As a result, the company has reduced its outstanding shares by 11.2% year-to-date.
  • The company also completed two acquisitions during the quarter. Year-to-date, Builders FirstSource, Inc. has executed five acquisitions, with combined prior-year sales approximating $350 million.