Is Builders FirstSource, Inc. overvalued or undervalued?

As of 12 September 2025, Builders FirstSource, Inc. moved from an expensive to a fair valuation grade. The company appears to be fairly valued based on its current metrics, with a P/E ratio of 13, an EV to EBITDA of 8.52, and a Price to Book Value of 2.82. In comparison, its peer, Beacon Roofing Supply, Inc., is considered expensive with a P/E of 20.51 and an EV to EBITDA of 12.17, indicating that Builders FirstSource is more attractively priced relative to its industry counterpart.
Despite the fair valuation, Builders FirstSource has faced significant stock price declines recently, with a 1-year return of -33.72% compared to the S&P 500's 17.14% return, although it has outperformed the index over the 3-year and 5-year periods with returns of 132.68% and 306.66%, respectively. This suggests that while the stock may be fairly valued now, its recent performance could raise concerns for potential investors.