The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Builders FirstSource (NYSE:BLDR) and the rest of the home construction materials stocks fared in Q3.
Traditionally, home construction materials companies have built economic moats with expertise in specialized areas, brand recognition, and strong relationships with contractors. More recently, advances to address labor availability and job site productivity have spurred innovation that is driving incremental demand. However, these companies are at the whim of residential construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of home construction materials companies.
The 12 home construction materials stocks we track reported a mixed Q3. As a group, revenues missed analysts’ consensus estimates by 0.9%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.4% since the latest earnings results.
Builders FirstSource (NYSE:BLDR)
Headquartered in Irving, TX, Builders FirstSource (NYSE:BLDR) is a construction materials manufacturer that offers a variety of lumber and lumber-related building products.
Builders FirstSource reported revenues of $4.23 billion, down 6.7% year on year. This print fell short of analysts’ expectations by 4.8%. Overall, it was a slower quarter for the company with a miss of analysts’ Windows, doors & millwork revenue estimates and full-year revenue guidance missing analysts’ expectations.
“I'm proud of our resilient third quarter performance as we maintained a mid-teens EBITDA margin by leveraging our distinct competitive advantages and differentiated business model,” commented Dave Rush, CEO of Builders FirstSource.
Unsurprisingly, the stock is down 6.5% since reporting and currently trades at $161.21.
Read our full report on Builders FirstSource here, it’s free.
Best Q3: Trex (NYSE:TREX)
Addressing the demand for aesthetically-pleasing and unique outdoor living spaces, Trex Company (NYSE:TREX) makes wood-alternative decking, railing, and patio furniture.
Trex reported revenues of $233.7 million, down 23.1% year on year, outperforming analysts’ expectations by 3.7%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates.
Trex scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 7.2% since reporting. It currently trades at $71.26.
Is now the time to buy Trex? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: JELD-WEN (NYSE:JELD)
Founded in the 1960s as a general wood-making company, JELD-WEN (NYSE:JELD) manufactures doors, windows, and other related building products.
JELD-WEN reported revenues of $934.7 million, down 13.2% year on year, falling short of analysts’ expectations by 5.6%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
JELD-WEN delivered the weakest full-year guidance update in the group. As expected, the stock is down 33.9% since the results and currently trades at $9.35.
Read our full analysis of JELD-WEN’s results here.
Gibraltar (NASDAQ:ROCK)
Gibraltar (NASDAQ:ROCK) makes renewable energy, agriculture technology and infrastructure products. Its mission statement is to make everyday living more sustainable.
Gibraltar reported revenues of $361.2 million, down 7.6% year on year. This number was in line with analysts’ expectations. More broadly, it was a mixed quarter as it also logged full-year EPS guidance slightly topping analysts’ expectations but EBITDA in line with analysts’ estimates.
The stock is down 5.6% since reporting and currently trades at $61.46.
Read our full, actionable report on Gibraltar here, it’s free.
Griffon (NYSE:GFF)
Initially in the defense industry, Griffon (NYSE:GFF) is a now diversified company specializing in home improvement, professional equipment, and building products.
Griffon reported revenues of $659.7 million, up 2.9% year on year. This result beat analysts’ expectations by 2.9%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.
The stock is up 15.1% since reporting and currently trades at $78.40.
Read our full, actionable report on Griffon here, it’s free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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