Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
Current Valuation Ratios
Builders FirstSource Inc., current price multiples
| Builders FirstSource Inc. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | Capital Goods | Industrials | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||
| Current share price (P) | $117.47 | ||||||||||||
| No. shares of common stock outstanding | 123,346,775 | ||||||||||||
| Growth rate (g) | 44.37% | ||||||||||||
| Earnings per share (EPS) | $22.29 | ||||||||||||
| Next year expected EPS | $32.18 | ||||||||||||
| Operating profit per share | $30.57 | ||||||||||||
| Sales per share | $184.25 | ||||||||||||
| Book value per share (BVPS) | $40.23 | ||||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||||
| Price to earnings (P/E) | 5.27 | — | 18.12 | 36.44 | 43.62 | 24.28 | 19.13 | 43.48 | 62.02 | 50.78 | |||
| Price to next year expected earnings | 3.65 | — | 14.50 | 34.17 | 42.98 | 21.10 | 13.34 | 42.86 | 63.15 | 48.80 | |||
| Price-earnings-growth (PEG) | 0.12 | — | 0.72 | 5.49 | 29.31 | 1.61 | 0.44 | 30.03 | — | 12.52 | |||
| Price to operating profit (P/OP) | 3.84 | — | 14.96 | 29.84 | 34.97 | 18.62 | 14.56 | 31.75 | 38.86 | 27.97 | |||
| Price to sales (P/S) | 0.64 | 2.65 | 3.19 | 5.56 | 8.14 | 3.60 | 1.44 | 2.57 | 3.22 | 2.54 | |||
| Price to book value (P/BV) | 2.92 | — | 10.03 | 7.48 | 14.79 | 7.44 | 16.12 | 3.45 | 8.19 | 7.75 | |||
Based on: 10-K (reporting date: 2022-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Builders FirstSource Inc., historical price multiples
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).
- Price to Earnings (P/E) Ratio
- The P/E ratio exhibited notable fluctuations over the analyzed periods. It increased significantly from 7.89 in 2018 to a peak of 28.49 in 2020, indicating a rapid rise in market valuation relative to earnings during that year. Subsequently, the ratio declined sharply to 7.48 in 2021 and further to 4.26 in 2022, suggesting a contraction in market expectations or potential improvement in earnings, making the stock appear more undervalued or reasonably priced in the later years.
- Price to Operating Profit (P/OP) Ratio
- A pattern similar to the P/E ratio was observed in the P/OP ratio. Starting at 4.39 in 2018, it almost doubled to 7.90 in 2019, followed by a more than twofold increase to 16.42 in 2020. After 2020, the ratio decreased sharply to 5.41 in 2021 and declined further to 3.10 in 2022. This suggests that the market initially assigned higher values to operating profits before reducing these valuations substantially in the last two years.
- Price to Sales (P/S) Ratio
- The P/S ratio showed a general upward trend from 0.21 in 2018 to 1.04 in 2020, reflecting increasing market valuation relative to sales. However, following the 2020 peak, the P/S ratio declined to 0.65 in 2021 and slightly decreased again to 0.51 in 2022. This pattern indicates a correction in investor enthusiasm or a relative adjustment of the enterprise value compared to revenue.
- Price to Book Value (P/BV) Ratio
- The P/BV ratio rose from 2.71 in 2018 to a high of 7.75 in 2020, indicating an escalating market premium over the book value. In 2021 and 2022, the ratio dropped to 2.69 and 2.36 respectively, showing a reduction in market valuation relative to the company’s net asset value. This decline following the peak suggests either a market reassessment of asset value or increased book values relative to stock price.
- Overall Trend Analysis
- All valuation multiples (P/E, P/OP, P/S, and P/BV) experienced significant growth reaching their highest levels around 2020. This uniform peak signals strong market optimism or inflated valuation metrics during that year. Following 2020, a consistent downward trend across all ratios is evident through 2022, indicating a possible market correction, lowered growth expectations, or improved financial performance affecting the multiples. The declining ratios in recent years imply the company’s stock became more attractively priced relative to earnings, operating profits, sales, and book value.
Price to Earnings (P/E)
Builders FirstSource Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 138,012,302 | 176,772,541 | 206,431,681 | 116,130,284 | 115,359,616 | |
| Selected Financial Data (US$) | ||||||
| Net income (in thousands) | 2,749,369) | 1,725,416) | 313,537) | 221,809) | 205,191) | |
| Earnings per share (EPS)2 | 19.92 | 9.76 | 1.52 | 1.91 | 1.78 | |
| Share price1, 3 | 84.78 | 73.05 | 43.27 | 26.69 | 14.03 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 4.26 | 7.48 | 28.49 | 13.97 | 7.89 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 19.15 | 16.82 | 36.80 | — | — | |
| Eaton Corp. plc | 27.93 | 27.77 | 37.46 | — | — | |
| GE Aerospace | — | — | 19.67 | — | — | |
| Honeywell International Inc. | 26.97 | 23.14 | 29.63 | — | — | |
| Lockheed Martin Corp. | 20.48 | 16.70 | 13.44 | — | — | |
| RTX Corp. | 27.59 | 36.79 | — | — | — | |
| P/E Ratio, Sector | ||||||
| Capital Goods | 40.21 | 57.31 | 123.55 | — | — | |
| P/E Ratio, Industry | ||||||
| Industrials | 36.06 | 35.59 | — | — | — | |
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).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= 2,749,369,000 ÷ 138,012,302 = 19.92
3 Closing price as at the filing date of Builders FirstSource Inc. Annual Report.
4 2022 Calculation
P/E ratio = Share price ÷ EPS
= 84.78 ÷ 19.92 = 4.26
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a consistent upward trend from 2018 to 2022. Beginning at $14.03 in 2018, it increased steadily each year, reaching $84.78 by the end of 2022. This reflects a strong appreciation in market value over the five-year period.
- Earnings Per Share (EPS)
- EPS showed moderate fluctuations before a significant increase in recent years. From $1.78 in 2018, EPS slightly rose to $1.91 in 2019 but then dipped to $1.52 in 2020. However, from 2020 onwards, EPS increased sharply, reaching $9.76 in 2021 and further rising to $19.92 in 2022, indicating a substantial improvement in profitability.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio experienced volatility, initially rising from 7.89 in 2018 to a peak of 28.49 in 2020. Subsequently, it decreased markedly to 7.48 in 2021 and further declined to 4.26 in 2022. The sharp decline in the P/E ratio during the last two years suggests that the market valuation grew at a slower pace relative to earnings, likely due to the substantial increase in EPS.
Price to Operating Profit (P/OP)
Builders FirstSource Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 138,012,302 | 176,772,541 | 206,431,681 | 116,130,284 | 115,359,616 | |
| Selected Financial Data (US$) | ||||||
| Income from operations (in thousands) | 3,770,206) | 2,387,424) | 543,854) | 392,306) | 368,968) | |
| Operating profit per share2 | 27.32 | 13.51 | 2.63 | 3.38 | 3.20 | |
| Share price1, 3 | 84.78 | 73.05 | 43.27 | 26.69 | 14.03 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 3.10 | 5.41 | 16.42 | 7.90 | 4.39 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 16.25 | 15.87 | 24.23 | — | — | |
| Eaton Corp. plc | 22.78 | 19.33 | 25.83 | — | — | |
| GE Aerospace | 19.88 | 17.46 | 25.64 | — | — | |
| Honeywell International Inc. | 20.84 | 20.68 | 24.86 | — | — | |
| Lockheed Martin Corp. | 14.06 | 11.56 | 10.63 | — | — | |
| RTX Corp. | 26.48 | 28.68 | — | — | — | |
| P/OP Ratio, Sector | ||||||
| Capital Goods | 25.20 | 22.96 | 70.31 | — | — | |
| P/OP Ratio, Industry | ||||||
| Industrials | 19.86 | 22.38 | 68.31 | — | — | |
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).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
Operating profit per share = Income from operations ÷ No. shares of common stock outstanding
= 3,770,206,000 ÷ 138,012,302 = 27.32
3 Closing price as at the filing date of Builders FirstSource Inc. Annual Report.
4 2022 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 84.78 ÷ 27.32 = 3.10
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a consistent upward trajectory across the reported periods, beginning at $14.03 at the end of 2018 and escalating steadily to reach $84.78 by the end of 2022. This represents a substantial increase, suggesting strong market confidence or positive developments influencing the company's valuation.
- Operating Profit per Share
- The operating profit per share demonstrated mixed trends. Initially, there was a slight increase from $3.20 in 2018 to $3.38 in 2019. However, this was followed by a decline to $2.63 in 2020. Subsequently, a marked improvement is observed, with operating profits surging to $13.51 in 2021 and further increasing to $27.32 in 2022. This sharp rise in the latter two years indicates a significant enhancement in operational profitability.
- Price to Operating Profit Ratio (P/OP)
- The P/OP ratio showed considerable fluctuation over the period. Starting at a modest 4.39 in 2018, it nearly doubled to 7.90 in 2019 before spiking to 16.42 in 2020, indicating the share price was high relative to operating profits that year. The ratio then decreased substantially, falling to 5.41 in 2021 and further to 3.10 in 2022, reflecting either a rise in operating profits, a relative decrease in share price valuation, or both. The low ratio in 2022 suggests the stock became more attractively priced relative to earnings at that time.
- Overall Insights
- The overall trend points to a company experiencing significant growth in market valuation and operational profitability in the latter half of the period under review. The sharp increase in operating profit per share coupled with a declining P/OP ratio towards the end of the period indicates improved earnings performance being acknowledged by the market, potentially reflecting effective management strategies or favorable market conditions.
Price to Sales (P/S)
Builders FirstSource Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 138,012,302 | 176,772,541 | 206,431,681 | 116,130,284 | 115,359,616 | |
| Selected Financial Data (US$) | ||||||
| Net sales (in thousands) | 22,726,418) | 19,893,856) | 8,558,874) | 7,280,431) | 7,724,771) | |
| Sales per share2 | 164.67 | 112.54 | 41.46 | 62.69 | 66.96 | |
| Share price1, 3 | 84.78 | 73.05 | 43.27 | 26.69 | 14.03 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 0.51 | 0.65 | 1.04 | 0.43 | 0.21 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Boeing Co. | 1.90 | 1.87 | 1.96 | — | — | |
| Caterpillar Inc. | 2.27 | 2.26 | 2.83 | — | — | |
| Eaton Corp. plc | 3.31 | 3.03 | 2.96 | — | — | |
| GE Aerospace | 1.20 | 1.50 | 1.41 | — | — | |
| Honeywell International Inc. | 3.78 | 3.73 | 4.34 | — | — | |
| Lockheed Martin Corp. | 1.78 | 1.57 | 1.40 | — | — | |
| RTX Corp. | 2.14 | 2.21 | 1.95 | — | — | |
| P/S Ratio, Sector | ||||||
| Capital Goods | 2.09 | 2.09 | 2.11 | — | — | |
| P/S Ratio, Industry | ||||||
| Industrials | 1.80 | 2.07 | 2.14 | — | — | |
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).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
Sales per share = Net sales ÷ No. shares of common stock outstanding
= 22,726,418,000 ÷ 138,012,302 = 164.67
3 Closing price as at the filing date of Builders FirstSource Inc. Annual Report.
4 2022 Calculation
P/S ratio = Share price ÷ Sales per share
= 84.78 ÷ 164.67 = 0.51
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited a consistent upward trajectory over the five-year period. Starting at $14.03 at the end of 2018, it nearly doubled by 2019 to $26.69, followed by continued growth to $43.27 in 2020. The upward trend accelerated in 2021 reaching $73.05 and further increased to $84.78 by the end of 2022. This indicates strong investor confidence and increased market valuation over the period examined.
- Sales per Share Trend
- Sales per share showed significant fluctuations in the observed years, starting at $66.96 in 2018 and decreasing to $62.69 in 2019. A notable decline occurred in 2020 when sales per share dropped sharply to $41.46. However, this was followed by a substantial recovery in 2021, with an increase to $112.54, and a further rise to $164.67 in 2022. The data suggests variability in revenue generation per share, with strong growth in the latter years.
- Price-to-Sales (P/S) Ratio Analysis
- The P/S ratio demonstrates volatility but overall decreased after peaking in 2020. It began at 0.21 in 2018, rose to 0.43 in 2019, and reached its highest value of 1.04 in 2020. Subsequently, the ratio declined to 0.65 in 2021 and further to 0.51 in 2022. This trend indicates that despite growth in sales per share and share price, the market's valuation relative to sales became more conservative after 2020.
Price to Book Value (P/BV)
Builders FirstSource Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 138,012,302 | 176,772,541 | 206,431,681 | 116,130,284 | 115,359,616 | |
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity (in thousands) | 4,962,566) | 4,802,481) | 1,152,783) | 824,953) | 596,338) | |
| Book value per share (BVPS)2 | 35.96 | 27.17 | 5.58 | 7.10 | 5.17 | |
| Share price1, 3 | 84.78 | 73.05 | 43.27 | 26.69 | 14.03 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 2.36 | 2.69 | 7.75 | 3.76 | 2.71 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 8.09 | 6.62 | 7.20 | — | — | |
| Eaton Corp. plc | 4.04 | 3.63 | 3.54 | — | — | |
| GE Aerospace | 2.43 | 2.64 | 2.89 | — | — | |
| Honeywell International Inc. | 8.02 | 6.91 | 8.07 | — | — | |
| Lockheed Martin Corp. | 12.67 | 9.62 | 15.27 | — | — | |
| RTX Corp. | 1.97 | 1.95 | 1.53 | — | — | |
| P/BV Ratio, Sector | ||||||
| Capital Goods | 5.31 | 4.77 | 5.05 | — | — | |
| P/BV Ratio, Industry | ||||||
| Industrials | 5.50 | 5.44 | 5.89 | — | — | |
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).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
BVPS = Stockholders’ equity ÷ No. shares of common stock outstanding
= 4,962,566,000 ÷ 138,012,302 = 35.96
3 Closing price as at the filing date of Builders FirstSource Inc. Annual Report.
4 2022 Calculation
P/BV ratio = Share price ÷ BVPS
= 84.78 ÷ 35.96 = 2.36
5 Click competitor name to see calculations.
- Share price trend
- The share price has demonstrated a consistent and significant upward trajectory over the observed period. Starting at $14.03 in 2018, it nearly doubled to $26.69 in 2019, increased substantially to $43.27 in 2020, followed by further rises in 2021 and 2022, reaching $73.05 and $84.78 respectively. This reflects strong market confidence and positive investor sentiment toward the company.
- Book value per share (BVPS) movement
- Book value per share showed initial growth from $5.17 in 2018 to $7.10 in 2019. A decline was observed in 2020 to $5.58, followed by a pronounced and sharp increase in 2021 and 2022, with BVPS rising dramatically to $27.17 and then to $35.96. This suggests a significant improvement in the company's net asset value per share during the most recent years.
- Price-to-Book value ratio (P/BV) analysis
- The P/BV ratio started at 2.71 in 2018, increased moderately to 3.76 in 2019 and surged to a peak of 7.75 in 2020. Subsequently, the ratio decreased notably to 2.69 in 2021 and further to 2.36 in 2022. This movement indicates that although the share price has increased consistently, the growth in book value especially from 2021 onwards has outpaced the price appreciation, leading to a lower valuation multiple. The elevated P/BV in 2020 suggests a period when the stock was priced far above its book value, possibly reflecting high market expectations or speculative factors during that year.