Is Builders FirstSource, Inc. overvalued or undervalued?

As of 24 October 2025, Builders FirstSource, Inc. has moved from a fair to an expensive valuation grade. The company appears to be overvalued based on its current metrics, including a P/E ratio of 13, a Price to Book Value of 2.82, and an EV to EBITDA of 8.52. In comparison to peers, Advanced Drainage Systems, Inc. has a P/E of 27.44, while Acuity Brands, Inc. shows a significantly higher P/E of 38.19, indicating that Builders FirstSource is trading at a lower valuation relative to its industry counterparts.
Despite a strong return over the last five years of 279.85%, the company's year-to-date return of -13.20% and one-year return of -31.71% significantly lag behind the S&P 500's returns of 15.47% and 16.90%, respectively. This underperformance further supports the conclusion that Builders FirstSource, Inc. is currently overvalued.