Is Builders FirstSource, Inc. overvalued or undervalued?

As of 20 May 2025, the valuation grade for Builders FirstSource, Inc. has moved from very expensive to fair. The company is currently fairly valued based on its financial metrics. Key ratios include a P/E ratio of 13, an EV to EBITDA of 8.52, and a ROE of 20.93%.
In comparison to its peers, Builders FirstSource's P/E ratio of 13 is significantly lower than The Home Depot, Inc., which has a P/E of 41.45, indicating that Builders FirstSource is more attractively priced relative to its earnings. Lowe's Companies, Inc. has a P/E of 17.75, further supporting the notion that Builders FirstSource is fairly valued in its industry context. Additionally, the company's recent stock performance shows a 1-week return of 6.64%, outperforming the S&P 500's slight decline, which reinforces the positive valuation outlook.