Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Builders FirstSource (NYSE:BLDR) and the best and worst performers in the home construction materials industry.
Traditionally, home construction materials companies have built economic moats with expertise in specialized areas, brand recognition, and strong relationships with contractors. More recently, advances to address labor availability and job site productivity have spurred innovation that is driving incremental demand. However, these companies are at the whim of residential construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of home construction materials companies.
The 10 home construction materials stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 0.6%.
In light of this news, share prices of the companies have held steady as they are up 4.4% on average since the latest earnings results.
Builders FirstSource (NYSE:BLDR)
Headquartered in Irving, TX, Builders FirstSource (NYSE:BLDR) is a construction materials manufacturer that offers a variety of lumber and lumber-related building products.
Builders FirstSource reported revenues of $3.66 billion, down 6% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a miss of analysts’ Windows, doors & millwork revenue estimates and full-year EBITDA guidance missing analysts’ expectations.
"Given the current environment, I'm proud of our resilient results in the first quarter. These results reflect the strength of our differentiated product portfolio and our focus on operational excellence. While macro and industry dynamics continue to be unsettled, we remain confident in our ability to navigate any challenges by staying rooted in our strategy and focusing on the factors within our control. During these uncertain times, our role as trusted partners is vital as we help customers address affordability challenges and increase efficiency. We are laying the groundwork for future growth, and as the market recovers, we expect to outperform," commented Peter Jackson, CEO of Builders FirstSource.
Builders FirstSource delivered the weakest full-year guidance update of the whole group. The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $119.60.
Read our full report on Builders FirstSource here, it’s free.
Best Q1: Trex (NYSE:TREX)
Addressing the demand for aesthetically-pleasing and unique outdoor living spaces, Trex Company (NYSE:TREX) makes wood-alternative decking, railing, and patio furniture.
Trex reported revenues of $340 million, down 9% year on year, outperforming analysts’ expectations by 3.5%. The business performed better than its peers, but it was unfortunately a mixed quarter with a narrow beat of analysts’ adjusted operating income estimates.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $58.72.
Is now the time to buy Trex? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Masco (NYSE:MAS)
Headquartered just outside of Detroit, MI, Masco (NYSE:MAS) designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets.
Masco reported revenues of $1.80 billion, down 6.5% year on year, falling short of analysts’ expectations by 2%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
Interestingly, the stock is up 13.3% since the results and currently trades at $69.50.
Read our full analysis of Masco’s results here.
Griffon (NYSE:GFF)
Initially in the defense industry, Griffon (NYSE:GFF) is a now diversified company specializing in home improvement, professional equipment, and building products.
Griffon reported revenues of $611.7 million, down 9.1% year on year. This print missed analysts’ expectations by 1%. Taking a step back, it was still a strong quarter as it logged an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ EPS estimates.
The stock is up 7.6% since reporting and currently trades at $72.93.
Read our full, actionable report on Griffon here, it’s free.
JELD-WEN (NYSE:JELD)
Founded in the 1960s as a general wood-making company, JELD-WEN (NYSE:JELD) manufactures doors, windows, and other related building products.
JELD-WEN reported revenues of $776 million, down 19.1% year on year. This number beat analysts’ expectations by 0.8%. It was an exceptional quarter as it also produced a solid beat of analysts’ organic revenue and adjusted operating income estimates.
JELD-WEN had the slowest revenue growth among its peers. The stock is down 22.4% since reporting and currently trades at $4.35.
Read our full, actionable report on JELD-WEN here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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