Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Builders FirstSource, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -1.1% to -6.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 37, DPO 26, DIO 39). At a 8.1% WACC with mid-year discounting, the terminal value (84% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 20.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $288.06 per share, suggesting BLDR is undervalued by 249.9% at the current price of $82.32.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 1,521 | 1,616 | 1,717 | 1,798 | 1,681 | 1,723 |
| (−) Net Interest | 168 | 178 | 190 | 199 | 186 | 190 |
| (+) D&A | 358 | 373 | 370 | 343 | 339 | 347 |
| EBITDA | 2,047 | 2,167 | 2,276 | 2,339 | 2,205 | 2,260 |
| (−) Tax | 323 | 343 | 364 | 382 | 357 | — |
| (−) CapEx | 305 | 323 | 344 | 360 | 336 | — |
| (−) ΔWC | -19 | 117 | 125 | 100 | -145 | — |
| Free Cash Flow (FCF) | 1,439 | 1,383 | 1,443 | 1,498 | 1,657 | — |
| Peers' EBITDA Multiple | 20.6x | |||||
| Terminal Value | 46,493 | |||||
| WACC / Discount Rate | 8.06% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,384 | 1,232 | 1,188 | 1,142 | 1,169 | 31,560 |
| Enterprise Value | 37,675 | |||||
| Projection Period | 6,115 | 16.2% | ||||
| Terminal Value | 31,560 | 83.8% | ||||
| (−) Current Net Debt | 5,466 | |||||
| Equity Value | 32,209 | |||||
| (÷) Outstanding Shares | 112M | |||||
| Fair Price | $288 | +250.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 16.6x | 18.6x | 20.6x | 22.6x | 24.6x |
|---|---|---|---|---|---|
| 6.1% | $258 | $288 | $318 | $348 | $379 |
| 7.1% | $245 | $274 | $303 | $331 | $360 |
| 8.1% | $233 | $261 | $288 | $316 | $343 |
| 9.1% | $222 | $248 | $274 | $300 | $327 |
| 10.1% | $211 | $236 | $261 | $286 | $311 |
Current price: $82.32. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.