Is Builders FirstSource, Inc. overvalued or undervalued?

As of 17 October 2025, Builders FirstSource, Inc. has moved from an attractive 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 ratio 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 ratio of 20.51, indicating that Builders FirstSource may offer better value relative to its competitor.
Despite its fair valuation, Builders FirstSource has underperformed against the S&P 500 in the short term, with a 1-year stock return of -37.28% compared to the index's 14.08%. However, over the longer term, the company has shown strong performance with a 5-year return of 265.79% against the S&P 500's 91.29%, suggesting that while it may currently be fairly valued, it has the potential for significant growth.