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Broker Revenue Forecasts For Builders FirstSource, Inc. (NASDAQ:BLDR) Are Surging Higher

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Simply Wall St
·3 min read
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Builders FirstSource, Inc. (NASDAQ:BLDR) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The analysts have sharply increased their revenue numbers, with a view that Builders FirstSource will make substantially more sales than they'd previously expected.

After the upgrade, the eleven analysts covering Builders FirstSource are now predicting revenues of US$11b in 2021. If met, this would reflect a major 46% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 57% to US$2.91. Previously, the analysts had been modelling revenues of US$8.9b and earnings per share (EPS) of US$2.91 in 2021. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

Check out our latest analysis for Builders FirstSource

earnings-and-revenue-growth
earnings-and-revenue-growth

Analysts increased their price target 9.4% to US$47.64, perhaps signalling that higher revenues are a strong leading indicator for Builders FirstSource's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Builders FirstSource at US$53.00 per share, while the most bearish prices it at US$37.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Builders FirstSource's past performance and to peers in the same industry. The analysts are definitely expecting Builders FirstSource's growth to accelerate, with the forecast 46% growth ranking favourably alongside historical growth of 11% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.2% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Builders FirstSource to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at Builders FirstSource.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Builders FirstSource analysts - going out to 2023, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.