This firm's average rating is Buy from 14 analysts. Do analysts base this consensus on technical analyses? We know that typical technical analysis utilizes price momentum, patterns, and trends looking at historical prices. It aims to identify signals based on Builders Firstsource market sentiment investors' perception of the future value of Builders. Let us look at a few aspects of Builders technical analysis. The company has Profit Margin (PM) of
2.76 %, which maeans that even a very small decline in it revenue will erase profits resulting in a net loss. This is normal as compared to the sector avarege. Similarly, it shows Operating Margin (OM) of
6.68 %, which suggests for every 100 dollars of sales, it generated a net operating income of 0.07.
Using predictive
technical analysis, we can analyze different prices and returns patterns and
diagnose historical swings to determine the real value of Builders FirstSource. In general, sophisticated investors focus on analyzing Builders FirstSource stock price patterns and their correlations with different microeconomic environment and drivers. They apply predictive analytics to build Builders FirstSource's daily price indicators and compare them against related drivers such as
momentum indicators and various other types of predictive indicators. Using this methodology combined with a more conventional
technical analysis and
fundamental analysis, we attempt to find the most accurate representation of
Builders FirstSource's intrinsic value. In addition to deriving basic predictive indicators for Builders FirstSource, many experienced traders also check how macroeconomic factors affect Builders FirstSource price patterns. Please read more on our
technical analysis page or use our predictive modules below to complement your research.
Sophisticated investors, who have witnessed
many market ups and downs, anticipate that the market will even out over time. This tendency of Builders FirstSource's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Builders FirstSource. Your research has to be compared to or analyzed against Builders FirstSource's peers to derive any actionable benefits. When done correctly, Builders FirstSource's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Builders FirstSource.
How important is Builders FirstSource's Liquidity
Builders FirstSource
financial leverage refers to using borrowed capital as a funding source to finance Builders FirstSource ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Builders FirstSource financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Builders FirstSource's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Builders FirstSource's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Builders FirstSource's total debt and its cash.
Builders FirstSource Gross Profit
Builders FirstSource Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Builders FirstSource previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Builders FirstSource Gross Profit growth over the last 10 years. Please check Builders FirstSource's
gross profit and other
fundamental indicators for more details.
Closer look at Builders Firstsource Semi Variance
Builders Firstsource has current Semi Variance of 6.52. Semi-variance provides a good measure of downside volatility for equity or a portfolio. It is similar to variance, but it only looks at periods where the returns are less than the target or average level.
Semi-variance is the square of semi-deviation. Semi-variance is calculated by averaging the deviations of returns that have a result that is less than the mean.
Semi Variance | = | SUM(RET DEV)2 N(ZERO) |
| = | 6.52 |
| SUM | = | Summation notation |
| RET DEV | = | Actual return deviation over selected period |
| N(ZERO) | = | Number of points with returns less than zero |
Let's now compare Builders Firstsource Semi Variance to its closest peers:
| BLDR | 6.517451472831206 |
| DOOR | 3.73 |
| AFI | 22.62 |
| APT | 9.34 |
| AWI | 1.75 |
Anything left for Builders Firstsource after the fall?
Builders Firstsource latest downside variance advances over 7.59. Builders Firstsource currently demonstrates below-average downside deviation. It has Information Ratio of 0.06 and Jensen Alpha of 0.12. However, we advise investors to further question Builders Firstsource expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Builders Firstsource's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Builders Firstsource's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Our Final Perspective on Builders Firstsource
While many other companies under the building products & equipment industry are still a bit expensive, Builders Firstsource may offer a potential longer-term growth to retail investors. To conclude, as of the 26th of February 2021, we believe that at this point, Builders Firstsource is very steady with
low odds of distress within the next 2 years. From a slightly different point of view, the entity appears to be
undervalued. Our up-to-date 30 days recommendation on the enterprise is
Strong Hold.
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Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Builders FirstSource. Please refer to our
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