Is Builders FirstSource, Inc. overvalued or undervalued?

As of 10 October 2025, Builders FirstSource, Inc. has moved from expensive to fair in valuation. 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 to peers, Advanced Drainage Systems, Inc. has a higher P/E ratio of 27.44, while Acuity Brands, Inc. shows a significantly elevated P/E of 38.19, indicating Builders FirstSource is more attractively priced relative to these competitors.
Despite recent challenges reflected in its stock performance, with a year-to-date return of -14.29% compared to the S&P 500's gain of 11.41%, the company has shown resilience over longer periods, achieving a 5-year return of 260.29% against the S&P 500's 88.45%. This suggests that while short-term fluctuations may raise concerns, the long-term growth potential remains strong, reinforcing the notion that Builders FirstSource is fairly valued at present.