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Section 1: Company Overview and Fundamentals
1.1 Company Overview:
Builders FirstSource, Inc. (NYSE: BLDR) is a major supplier of building products, prefabricated components, and value-added services to the professional market segment for new residential construction and repair and remodeling in the US. It has operations across 42 states with around 575 locations.
1.2 The Key Positives, Negatives, Investment Highlights and Risks
1.3 Top 10 Shareholders: The top 10 shareholders have been highlighted in the chart below, which together form ~53.29% of the total shareholding.
1.4 Key Metrics:
BLDR has delivered healthy 3QFY22 results with 6.9% growth in core organic sales, including nearly 20% growth in the higher margin value-added products. The company has posted an uptick in EBITDA margin to reach 19.8% in 3QFY22 from 17.7% in 3QFY21. Further, the company reported a healthy improvement in ROE to 14.2% in 3QFY22 from 11.1% in 3QFY21.
Section 2: Business Updates and Financial Highlights
2.1 Recent Updates:
2.2 Insights of 3QFY22:
Section 3: Key Risks and Outlook:
Section 4: Stock Recommendation Summary:
4.1 Price Performance and Technical Summary:
4.2 Fundamental Valuation
Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is neither an indicator nor a guarantee of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is November 29, 2022. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer
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