Investment Case Updated: April 7, 2026

Price: $78.93 (4/7/26)
Market Capitalization: $8.7B
Enterprise Value: $13.6B

What the Company Does

BLDR is a leading supplier of building products and services to professional homebuilders in the United States. Management has been focused on growing “value-added” products and services to builders, which means that BLDR provides labor or services that could have otherwise been done by the contractor. These bundled solutions, which now comprise roughly half of all revenues, often help customers shorten build times while improving efficiency and profitability for BLDR while potentially increasing the stickiness of BLDR’s offerings.

Why We Own It

BLDR is a dominant player in a fragmented industry at a compelling valuation with ample room for growth. Management estimates a total market size of $110B for new single-family materials alone, implying that BLDR’s market share of ~10% has plenty of room to take share from or acquire smaller players, potentially providing more pricing power in the future. New single-family construction represented ~66% of BLDR’s 4Q25 revenues, while multi-family and remodel market segments were 10% and 24% of revenues, respectively, in even larger addressable markets. Over the past five years, BLDR has averaged a return on equity of 36%, implying a high-quality business.  Although the company continues to navigate a volatile macroeconomic backdrop that is pressuring both top-line growth and profitability in the near-term, management expects to maintain double-digit EBITDA margins in its base business this year despite single-family housing starts slumping back to pre-pandemic levels (when BLDR’s margins ranged between 6-9%). BLDR appears to be materially under-earning in the current environment, as management’s “normalized” framework implies $18.0B of revenue with $2.3B of Adjusted EBITDA (12.5% margin), well above FY26 guidance for revenue of $15.3B and Adjusted EBITDA of $1.5B (9.8% margin), as temporary volume deleveraging overshadows ongoing tech investments and capacity adjustments which continue to improve per-unit productivity.

Despite the high business quality, strong industry position and room for continued profitable growth, BLDR’s valuation implies little growth ahead at a trailing-twelve-month free cash flow yield of 10.0%. BLDR trades at a forward (FY27) EV/EBITDA multiple of 8.2x, while other leading distribution companies (FAST, FERG, GWW, WSO, POOL) trade between 12x and 23x next year’s EBITDA estimates.

How Management Allocates Capital

Management has four priorities – 1) Maintain a strong balance sheet with a leverage ratio between 1.0x and 2.0x EBITDA, 2) Grow organically, 3) Buy others, 4) Repurchase shares. Although leverage is currently above (2.7x) the upper end of management’s leverage target range, management remains committed to returning capital to shareholders and investing in growth. Of the $6.6B of capital deployed since the start of 2023, roughly 56% has gone toward share repurchases, representing approximately 22% of the average market cap over the same period, and BLDR had $500MM of remaining buyback authorization as of year-end (5.7% of market cap). Management has historically utilized M&A as an accelerator of the company’s growth strategy, completing 40 acquisitions since its merger with BMC in January 2021, accumulating $2.3B in annual revenue for the company, including 8 bolt-on acquisitions in 2025.

We originally posted our investment case for BLDR on February 6, 2024.