Price to Operating Profit (P/OP)
since 2005
Calculation
Builders FirstSource Inc., P/OP, long-term trends, calculation
| P/OP | = | Share price1, 2, 3 | ÷ | Operating profit per share1 | Operating profit per share1 | = | Income (loss) from operations1 (in thousands) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 28, 2023 | 3.10 | = | 84.78 | ÷ | 27.32 | 27.32 | = | 3,770,206 | ÷ | 138,012,302 | |
| Mar 1, 2022 | 5.41 | = | 73.05 | ÷ | 13.51 | 13.51 | = | 2,387,424 | ÷ | 176,772,541 | |
| Feb 26, 2021 | 16.42 | = | 43.27 | ÷ | 2.63 | 2.63 | = | 543,854 | ÷ | 206,431,681 | |
| Feb 21, 2020 | 7.90 | = | 26.69 | ÷ | 3.38 | 3.38 | = | 392,306 | ÷ | 116,130,284 | |
| Mar 1, 2019 | 4.39 | = | 14.03 | ÷ | 3.20 | 3.20 | = | 368,968 | ÷ | 115,359,616 | |
| Mar 1, 2018 | 8.48 | = | 21.19 | ÷ | 2.50 | 2.50 | = | 285,103 | ÷ | 114,120,308 | |
| Mar 1, 2017 | 6.89 | = | 14.54 | ÷ | 2.11 | 2.11 | = | 236,336 | ÷ | 112,040,464 | |
| Mar 11, 2016 | 11.77 | = | 9.69 | ÷ | 0.82 | 0.82 | = | 90,617 | ÷ | 110,073,332 | |
| Mar 3, 2015 | 11.82 | = | 6.02 | ÷ | 0.51 | 0.51 | = | 50,018 | ÷ | 98,225,978 | |
| Feb 28, 2014 | 17.55 | = | 8.61 | ÷ | 0.49 | 0.49 | = | 48,042 | ÷ | 97,950,006 | |
| Mar 1, 2013 | — | = | 6.04 | ÷ | -0.09 | -0.09 | = | -8,703 | ÷ | 96,876,244 | |
| Mar 2, 2012 | — | = | 3.09 | ÷ | -0.39 | -0.39 | = | -37,475 | ÷ | 96,612,914 | |
| Mar 3, 2011 | — | = | 2.45 | ÷ | -0.66 | -0.66 | = | -63,733 | ÷ | 96,768,427 | |
| Mar 4, 2010 | — | = | 3.04 | ÷ | -0.63 | -0.63 | = | -60,667 | ÷ | 96,708,529 | |
| Mar 2, 2009 | — | = | 1.51 | ÷ | -3.46 | -3.46 | = | -124,996 | ÷ | 36,106,079 | |
| Mar 5, 2008 | — | = | 6.63 | ÷ | -0.36 | -0.36 | = | -12,875 | ÷ | 36,030,411 | |
| Mar 12, 2007 | 4.34 | = | 17.15 | ÷ | 3.95 | 3.95 | = | 139,848 | ÷ | 35,370,923 | |
| Mar 13, 2006 | 5.99 | = | 22.43 | ÷ | 3.75 | 3.75 | = | 125,172 | ÷ | 33,421,304 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Builders FirstSource Inc. Annual Report.
The financial trajectory from 2006 to 2023 is characterized by three distinct phases: a period of severe contraction, a stabilization and recovery phase, and a recent era of exponential growth in both valuation and profitability.
- Share Price Trends
- A significant devaluation occurred between 2006 and 2009, with the share price falling from 22.43 USD to a low of 1.51 USD. This was followed by a gradual recovery period leading up to 2018, where the price returned to 21.19 USD. A second, more aggressive growth phase began in 2020, resulting in a peak value of 84.78 USD by February 2023.
- Operating Profit per Share Analysis
- Operating profitability experienced a total collapse between 2007 and 2008, shifting from 3.95 USD to -0.36 USD. Negative operating profits persisted for six consecutive years, reaching a nadir of -3.46 USD in 2009. A return to profitability was achieved in 2014 (0.49 USD), after which operating profit per share grew consistently, accelerating sharply in 2022 and 2023 to reach 27.32 USD.
- Price to Operating Profit (P/OP) Ratio Interpretation
- The P/OP ratio was non-calculable between 2008 and 2013 due to negative operating profits. Upon the return to profitability in 2014, the ratio spiked to 17.55, reflecting a market valuation that significantly exceeded current operating earnings. Between 2015 and 2019, the ratio generally trended downward, reaching 4.39 in 2019. While a temporary surge to 16.42 occurred in 2021, the ratio declined sharply to 3.10 by 2023. This final decline is notable because it occurred despite rising share prices, indicating that the growth in operating profit vastly outpaced the increase in the stock price during the final two years of the period.
The divergence between share price growth and the P/OP ratio in the final period suggests a transition from a valuation driven by speculation or recovery toward one supported by fundamental operating strength.
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Comparison to Competitors
Builders FirstSource Inc., P/OP, long-term trends, comparison to competitors
| Builders FirstSource Inc. | Boeing Co. | Caterpillar Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|
| Feb 28, 2023 | 3.10 | — | 16.25 | 14.06 | 26.48 |
| Mar 1, 2022 | 5.41 | — | 15.87 | 11.56 | 28.68 |
| Feb 26, 2021 | 16.42 | — | 24.23 | 10.63 | — |
| Feb 21, 2020 | 7.90 | — | 9.08 | 14.49 | 15.07 |
| Mar 1, 2019 | 4.39 | 19.08 | 9.20 | 11.62 | 12.16 |
| Mar 1, 2018 | 8.48 | 19.69 | 21.70 | 16.47 | 11.53 |
| Mar 1, 2017 | 6.89 | 17.20 | 116.61 | 13.51 | 10.86 |
| Mar 11, 2016 | 11.77 | 10.36 | 11.66 | 12.17 | 9.71 |
| Mar 3, 2015 | 11.82 | 13.96 | 9.71 | 10.89 | 11.15 |
| Feb 28, 2014 | 17.55 | 14.75 | 10.94 | 11.62 | 10.88 |
| Mar 1, 2013 | — | 9.09 | 7.30 | 6.40 | 10.73 |
| Mar 2, 2012 | — | 9.69 | 10.41 | 7.21 | 9.40 |
| Mar 3, 2011 | — | 10.76 | 16.44 | 6.84 | 10.86 |
| Mar 4, 2010 | — | 20.91 | 63.07 | 6.47 | 9.67 |
| Mar 2, 2009 | — | 7.87 | 3.61 | 5.31 | 5.88 |
| Mar 5, 2008 | — | 11.17 | 9.03 | 9.48 | 9.95 |
| Mar 12, 2007 | 4.34 | 23.81 | 8.83 | 10.84 | 11.11 |
| Mar 13, 2006 | 5.99 | 20.69 | 12.95 | 10.66 | 11.11 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).