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Posted by Defense World Staff on Apr 25th, 2026

Cwm LLC cut its position in shares of Sixth Street Specialty Lending, Inc. (NYSE:TSLX – Free Report) by 31.9% during the 4th quarter, according to its most recent disclosure with the Securities and Exchange Commission (SEC). The fund owned 92,325 shares of the financial services provider’s stock after selling 43,177 shares during the quarter. Cwm LLC owned 0.10% of Sixth Street Specialty Lending worth $2,005,000 at the end of the most recent reporting period.

A number of other hedge funds have also recently added to or reduced their stakes in TSLX. Harbor Investment Advisory LLC raised its stake in Sixth Street Specialty Lending by 673.2% during the fourth quarter. Harbor Investment Advisory LLC now owns 1,732 shares of the financial services provider’s stock worth $38,000 after acquiring an additional 1,508 shares during the period. Advisory Services Network LLC acquired a new position in Sixth Street Specialty Lending in the third quarter valued at approximately $75,000. Redmont Wealth Advisors LLC bought a new position in shares of Sixth Street Specialty Lending during the third quarter valued at approximately $79,000. State of Alaska Department of Revenue bought a new position in shares of Sixth Street Specialty Lending during the third quarter valued at approximately $98,000. Finally, Farther Finance Advisors LLC raised its position in shares of Sixth Street Specialty Lending by 604.6% during the 3rd quarter. Farther Finance Advisors LLC now owns 4,700 shares of the financial services provider’s stock worth $107,000 after purchasing an additional 4,033 shares during the period. Institutional investors and hedge funds own 70.25% of the company’s stock.

Analysts Set New Price Targets Several analysts recently issued reports on the company. Citizens Jmp cut their price target on Sixth Street Specialty Lending from $25.00 to $24.00 and set a “market outperform” rating on the stock in a report on Wednesday. Weiss Ratings lowered Sixth Street Specialty Lending from a “buy (b-)” rating to a “hold (c+)” rating in a research report on Friday, February 20th. Truist Financial cut their target price on Sixth Street Specialty Lending from $24.00 to $22.00 and set a “buy” rating on the stock in a research note on Tuesday, February 17th. Wall Street Zen raised shares of Sixth Street Specialty Lending from a “sell” rating to a “hold” rating in a report on Saturday, April 4th. Finally, JPMorgan Chase & Co. lowered their price target on shares of Sixth Street Specialty Lending from $21.00 to $18.50 and set a “neutral” rating for the company in a research report on Friday, March 13th. One analyst has rated the stock with a Strong Buy rating, six have given a Buy rating and two have assigned a Hold rating to the company’s stock. According to data from MarketBeat, Sixth Street Specialty Lending currently has an average rating of “Moderate Buy” and an average price target of $21.81.

View Our Latest Stock Analysis on TSLX

Sixth Street Specialty Lending Stock Performance TSLX opened at $18.67 on Friday. The company has a current ratio of 2.83, a quick ratio of 2.83 and a debt-to-equity ratio of 1.08. The business’s 50 day moving average is $18.31 and its 200-day moving average is $20.51. The stock has a market cap of $1.77 billion, a PE ratio of 10.32 and a beta of 0.66. Sixth Street Specialty Lending, Inc. has a twelve month low of $16.99 and a twelve month high of $25.17.

Sixth Street Specialty Lending (NYSE:TSLX – Get Free Report) last issued its quarterly earnings data on Thursday, February 12th. The financial services provider reported $0.30 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.50 by ($0.20). Sixth Street Specialty Lending had a return on equity of 12.71% and a net margin of 37.99%.The business had revenue of $108.25 million during the quarter, compared to the consensus estimate of $107.11 million. During the same period last year, the company earned $0.61 earnings per share. On average, analysts predict that Sixth Street Specialty Lending, Inc. will post 1.97 earnings per share for the current year.

Sixth Street Specialty Lending Cuts Dividend The firm also recently declared a quarterly dividend, which was paid on Tuesday, March 31st. Stockholders of record on Monday, March 16th were paid a $0.01 dividend. The ex-dividend date of this dividend was Monday, March 16th. This represents a $0.04 annualized dividend and a dividend yield of 0.2%. Sixth Street Specialty Lending’s dividend payout ratio is presently 101.66%.

Insider Activity at Sixth Street Specialty Lending In other Sixth Street Specialty Lending news, VP Alan Waxman purchased 200,000 shares of the stock in a transaction dated Monday, March 9th. The shares were bought at an average cost of $18.18 per share, with a total value of $3,636,000.00. Following the completion of the acquisition, the vice president owned 500,000 shares of the company’s stock, valued at approximately $9,090,000. This trade represents a 66.67% increase in their ownership of the stock. The purchase was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Insiders acquired 545,000 shares of company stock worth $9,997,150 over the last quarter. 3.22% of the stock is currently owned by company insiders.

About Sixth Street Specialty Lending (Free Report)

Sixth Street Specialty Lending Inc (NYSE: TSLX) is a closed-end, externally managed business development company that provides flexible debt financing solutions to middle-market companies. The fund primarily targets senior secured loans, unitranche facilities, mezzanine debt, second-lien financings and equity co-investment opportunities. By structuring tailored capital solutions, Sixth Street Specialty Lending seeks to support growth initiatives, recapitalizations and refinancings across a diverse set of industries, including technology, healthcare and business services.

As an affiliate of Sixth Street Partners, a global alternative investment firm, the company leverages the broader platform’s credit research, operational expertise and industry relationships.

Further Reading Five stocks we like better than Sixth Street Specialty Lending Want to see what other hedge funds are holding TSLX? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Sixth Street Specialty Lending, Inc. (NYSE:TSLX – Free Report).

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SaaS-related fears have driven significant discounts in BDCs, especially those with higher SaaS exposure. Market concerns center on AI disruption, weak SaaS recovery rates, and skepticism around leveraged SaaS LBOs. I believe SaaS default fears are overblown; established SaaS firms with strong moats and cash flow are more resilient.

Sixth Street (TSLX - Free Report) came out with quarterly earnings of $0.42 per share, missing the Zacks Consensus Estimate of $0.49 per share. This compares to earnings of $0.58 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of -13.85%. A quarter ago, it was expected that this business development company would post earnings of $0.5 per share when it actually produced earnings of $0.52, delivering a surprise of +4%.

Over the last four quarters, the company has surpassed consensus EPS estimates three times.

Sixth St, which belongs to the Zacks Financial - SBIC & Commercial Industry industry, posted revenues of $93.4 million for the quarter ended March 2026, missing the Zacks Consensus Estimate by 10.68%. This compares to year-ago revenues of $116.35 million. The company has topped consensus revenue estimates two times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Sixth St shares have lost about 9% since the beginning of the year versus the S&P 500's gain of 5.2%.

What's Next for Sixth St?While Sixth St has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Sixth St was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.48 on $104.14 million in revenues for the coming quarter and $1.97 on $420.4 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - SBIC & Commercial Industry is currently in the bottom 17% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the same industry, Carlyle Secured Lending, Inc. (CGBD - Free Report) , has yet to report results for the quarter ended March 2026. The results are expected to be released on May 10.

This company is expected to post quarterly earnings of $0.35 per share in its upcoming report, which represents a year-over-year change of -14.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Carlyle Secured Lending, Inc.'s revenues are expected to be $43.07 million, up 18.8% from the year-ago quarter.

Sixth Street Specialty Lending, Inc. (TSLX) Q1 2026 Earnings Call Transcript

Sixth Street Specialty Lending remains a hold due to declining earnings, a downward-trending NAV, and limited growth catalysts despite a recent dividend reduction. TSLX's premium to NAV has widened to 10.47% but remains below its five-year average, offering relative valuation appeal if BDC market conditions improve. Q1 2026 net investment income fell to $0.42 per share, with interest income and NAV both declining, while non-accruals rose to 1.4% of portfolio value.

Higher interest rates are generally favorable for BDCs. However, some BDCs can suffer from higher rates that could potentially result in painful dividend cuts. In this article, I explain how we as BDC investors could digest the current rate regime and its implications on dividends.

Total assets under management reach a record $907.1 billion Money market assets reach a record $684.7 billion Equity assets reach a record $100.8 billion Q1 2026 earnings per diluted share of $1.27 Quarterly dividend increased by 11.8% from previous quarter to $0.38 per share , /PRNewswire/ -- Federated Hermes, Inc. (NYSE: FHI), a global leader in active investing, today reported earnings per diluted share (EPS) of $1.27 for Q1 2026, compared to $1.25 for the same quarter last year, on net income of $96.4 million for Q1 2026, compared to $101.1 million for Q1 2025. Federated Hermes' Q1 2025 results included a $12.9 million decrease in other operating expense, or $0.15 per diluted share, resulting from a value-added tax (VAT) refund received as part of amended VAT filings in the U.K.

Federated Hermes' total managed assets were a record $907.1 billion at March 31, 2026, up $67.3 billion or 8% from $839.8 billion at March 31, 2025 and up $4.5 billion from $902.6 billion at Dec. 31, 2025. Total average managed assets for Q1 2026 were $915.6 billion, up $72.4 billion or 9% from $843.2 billion for Q1 2025 and up $41.9 billion or 5% from $873.7 billion for Q4 2025.

"In the first quarter, we saw record gross sales and positive net flows in our equity offerings as we continued momentum from the previous year, with investor interest in a range of our offering types," said J. Christopher Donahue, president and chief executive officer. "Separate accounts reached new record assets on overall demand for our MDT suite of quantitative investment solutions, led by our MDT All Cap Core and MDT Mid Cap Growth offerings. Investors with interest in capital preservation and liquidity continued to rely on our money market offerings and—for those interested in moving further out the yield curve in the pursuit of higher yields than money market products—our ultrashort funds."

Federated Hermes' board of directors declared a dividend of $0.38 per share, which was an increase of $0.04 or 11.8% from the previous quarter. The dividend is payable on May 15, 2026 to shareholders of record as of May 8, 2026. During Q1 2026, Federated Hermes purchased 1,191,300 shares of Federated Hermes class B common stock for $66.0 million.

Equity assets were a record $100.8 billion at March 31, 2026, up $19.9 billion or 25% from $80.9 billion at March 31, 2025 and up $2.9 billion or 3% from $97.9 billion at Dec. 31, 2025. Top-selling equity funds during Q1 2026 on a net basis were Federated Hermes MDT Mid Cap Growth Fund, Federated Hermes MDT Large Cap Growth Fund, Federated Hermes MDT All Cap Core Fund, Federated Hermes MDT US Equity Fund and Federated Hermes MDT Small Cap Core Fund.

Fixed-income assets were $99.8 billion at March 31, 2026, up $0.3 billion from $99.5 billion at March 31, 2025 and down $0.3 billion from $100.1 billion at Dec. 31, 2025. Top-selling fixed-income funds during Q1 2026 on a net basis were Federated Hermes Ultrashort Bond Fund, Federated Hermes Total Return Bond ETF, Federated Hermes Municipal Ultrashort Fund, Federated Hermes Government Ultrashort Fund and Federated Hermes Short-Term Income Fund.

Alternative/private markets assets were $19.0 billion at March 31, 2026, down $0.4 billion or 2% from $19.4 billion at March 31, 2025 and down $0.1 billion or 1% from $19.1 billion at Dec. 31, 2025.

Money market assets were a record $684.7 billion at March 31, 2026, up $47.6 billion or 7% from $637.1 billion at March 31, 2025 and up $2.1 billion from $682.6 billion at Dec. 31, 2025. Money market fund assets were $502.8 billion at March 31, 2026, up $37.9 billion or 8% from $464.9 billion at March 31, 2025 and down $5.6 billion or 1% from $508.4 billion at Dec. 31, 2025.

Financial Summary

Q1 2026 vs. Q1 2025

Revenue increased $55.4 million or 13% primarily due to an increase in revenue due to higher average money market and equity assets. This increase was partially offset by a decrease in performance fees and carried interest of $5.6 million, which includes a decrease of $1.0 million in carried interest from consolidated carried interest vehicles, which is largely offset in compensation expense.

During Q1 2026, Federated Hermes derived 54% of its revenue from money market assets, 45% from long-term assets (30% from equity, 10% from fixed-income, and 5% from alternative/private markets and multi-asset) and 1% from sources other than managed assets.

Operating expenses increased $60.9 million or 21% primarily due to a $26.7 million increase in distribution expenses resulting primarily from higher average money market fund assets, an $18.2 million increase in other expense primarily due to a value added tax (VAT) refund received in Q1 2025 related to amended VAT filings in the U.K. and fluctuations in foreign currency exchange rates, and a $10.8 million increase in compensation and related expense primarily due to higher incentive compensation.

Nonoperating income (expenses), net for Q1 2026 decreased $0.8 million due primarily to lower net gains on securities.

Q1 2026 vs. Q4 2025

Revenue decreased $3.9 million or 1% primarily due to a $10.5 million decrease in revenue resulting from two fewer days in Q1 2026 and a decrease in development fees of $8.6 million. These decreases were partially offset by an increase in revenue due to higher average money market and equity assets.

Operating expenses increased $5.4 million or 2% primarily due to a $9.1 million increase in compensation and related expense  primarily from higher stock-based compensation expense, partially offset by a $3.4 million decrease in Other expense primarily due to lower charitable contributions.

Nonoperating income (expenses), net decreased $1.3 million due primarily to lower net gains on securities .

Earnings call information

Federated Hermes will host an earnings conference call at 9 a.m. Eastern on Friday, May 1, 2026. Investors are invited to listen to the earnings teleconference by calling 888-506-0062 (domestic) or 973-528-0011 (international) prior to the 9 a.m. start time. To listen online, go to the About section of FederatedHermes.com/us to register and join the call. A replay will be available at approximately 12:30 p.m. Eastern on May 1, 2026. To access the telephone replay, dial 877-481-4010 (domestic) or 919-882-2331 (international) and enter access code 53870. The online replay will be available via FederatedHermes.com/us for one year.

About Federated Hermes

Federated Hermes, Inc. is a global leader in active investment management, with $907.1 billion in assets under management1. We deliver investment solutions that help investors target a broad range of outcomes and provide equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies to more than 11,000 institutions and intermediaries worldwide. Our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated Hermes has more than 2,000 employees in London, New York, Boston and offices worldwide.

Federated Hermes ranks in the top 5% of equity fund managers, the top 8% of money market fund managers and the top 11% of fixed-income fund managers2 in the industry. Federated Hermes also ranks as the 10th-largest manager of model-delivered separately managed accounts3. For more information, including an analyst presentation, which is updated periodically, visit FederatedHermes.com/us.

###

1) As of March 31, 2026.
2) Morningstar, March 31, 2026. Based on U.S. fund flows rankings.
3) Money Management Institute/Cerulli,Q4 2025.
Federated Securities Corp. is distributor of the Federated Hermes funds.
Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling, Federated MDTA LLC, Hermes Fund Managers Ireland Limited, Hermes Investment Management Limited, and Hermes GPE LLP, each a registered investment advisor in one or more of the U.S., U.K. or Ireland.

Cautionary statements

Certain statements in this press release, such as those related to performance, investment strategies, opportunities to meet client needs, investor preferences and demand, asset flows and asset mix constitute or may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the company, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements can include statements that do not relate strictly to historical or current facts and are typically identified by words or phrases such as "trend," "forecast," "project," "predict," "potential," "approximate," "opportunity," "believe," "expect," "anticipate," "current," "intention," "estimate," "position," "projection," "plan," "assume," "continue," "remain," "maintain," "sustain," "seek," "achieve," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "can," "may," and similar expressions. Any forward-looking statement, and Federated Hermes' level of business activity and financial results, are inherently subject to significant business, market, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond Federated Hermes' control. Other risks and uncertainties include the ability of the company to predict the level of fee waivers and expenses in future quarters, predict whether performance fees or carried interest will be earned and retained, the ability of the company to sustain product demand, the timing and level of product sales and redemptions, market appreciation or depreciation, revenues, and asset levels, flows and mix, which could vary significantly depending on various factors, such as market conditions, investment performance and investor behavior. Other risks and uncertainties include the risk factors discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and neither the company nor any other person assumes responsibility for the accuracy and completeness, or updating, of such statements in the future.

Unaudited Condensed Consolidated Statements of Income

(in thousands, except per share data)

Quarter Ended

%
Change
Q1 2025
to Q1
2026

Quarter Ended

%
Change
Q4 2025
to Q1
2026

March 31, 2026

March 31, 2025

Dec. 31, 2025

Revenue

Investment advisory fees, net

$        319,408

$        287,460

11 %

$       313,975

2 %

Administrative service fees, net—affiliates

110,285

101,109

9

109,759

0

Other service fees, net

49,264

34,971

41

59,099

(17)

Total Revenue

478,957

423,540

13

482,833

(1)

Operating Expenses

Compensation and related

154,119

143,270

8

144,981

6

Distribution

125,745

99,085

27

122,339

3

Systems and communications

26,463

24,226

9

24,719

7

Professional service fees

21,336

18,548

15

23,399

(9)

Office and occupancy

10,062

9,952

1

9,704

4

Advertising and promotional

4,098

4,576

(10)

7,001

(41)

Travel and related

3,850

3,553

8

4,677

(18)

Intangible asset related

3,422

3,196

7

3,475

(2)

Other

3,531

(14,638)

(124)

6,964

(49)

Total Operating Expenses

352,626

291,768

21

347,259

2

Operating Income

126,331

131,772

(4)

135,574

(7)

Nonoperating Income (Expenses)

Investment income (loss), net

6,653

7,475

(11)

7,886

(16)

Debt expense

(3,185)

(3,179)

0

(3,201)

0

Other, net

(30)

(27)

(11)

73

(141)

Total Nonoperating Income (Expenses), net

3,438

4,269

(19)

4,758

(28)

Income before income taxes

129,769

136,041

(5)

140,332

(8)

Income tax provision

33,823

32,165

5

32,899

3

Net income including the noncontrolling interests in subsidiaries

95,946

103,876

(8)

107,433

(11)

Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries

(432)

2,742

(116)

394

(210)

Net Income

$         96,378

$        101,134

(5) %

$        107,039

(10) %

Amounts Attributable to Federated Hermes, Inc.

Earnings Per Share1

Basic and diluted

$            1.27

$            1.25

2 %

$            1.39

(9) %

Weighted-Average Shares Outstanding

Basic

72,648

77,541

73,795

Diluted

72,650

77,542

73,795

Dividends Declared Per Share

$            0.34

$            0.31

$            0.34

1)

Unvested share-based awards that receive non-forfeitable dividend rights are deemed participating securities and are required to be considered in the computation of earnings per share under the "two-class method." As such, total net income of $4.4 million, $4.5 million and $4.8 million available to unvested restricted Federated Hermes shareholders for the quarterly periods ended March 31, 2026, March 31, 2025 and Dec. 31, 2025, respectively, was excluded from the computation of earnings per share.

 Unaudited Condensed Consolidated Balance Sheets

(in thousands)

March 31, 2026

Dec. 31, 2025

Assets

  Cash and other investments

$          645,417

$           724,297

  Other current assets

143,153

139,495

  Intangible assets, net, including goodwill

1,173,986

1,183,612

  Other long-term assets

181,251

181,933

  Total Assets

$        2,143,807

$         2,229,337

Liabilities, Redeemable Noncontrolling Interests and Equity

  Current liabilities

$          240,680

$           314,141

  Long-term debt

348,434

348,369

  Other long-term liabilities

291,853

303,350

  Redeemable noncontrolling interests

58,520

66,529

Equity excluding treasury stock

2,133,825

2,070,162

Treasury stock

(929,505)

(873,214)

  Total Liabilities, Redeemable Noncontrolling Interests and Equity

$        2,143,807

$         2,229,337

Unaudited Changes in Long-Term Assets - By Asset Class

(in millions)

Quarter Ended

March 31, 2026

Dec. 31, 2025

March 31, 2025

Equity

Beginning assets

$        97,898

$        94,656

$        79,423

Sales1

9,091

8,949

7,412

Redemptions1

(6,878)

(7,431)

(5,993)

Net sales (redemptions)1

2,213

1,518

1,419

Net exchanges

(139)

139

(114)

Impact of foreign exchange2

(287)

107

754

Market gains and (losses)3

1,147

1,478

(569)

Ending assets

$       100,832

$        97,898

$        80,913

Fixed Income

Beginning assets

$       100,127

$       101,813

$        98,059

Sales1

5,927

5,891

5,944

Redemptions1

(6,349)

(8,687)

(6,288)

Net sales (redemptions)1

(422)

(2,796)

(344)

Net exchanges

148

15

101

Impact of foreign exchange2

(40)

6

85

Market gains and (losses)3

(15)

1,089

1,585

Ending assets

$        99,798

$       100,127

$        99,486

Alternative/Private Markets

Beginning assets

$        19,101

$        19,024

$        18,864

Sales1

629

724

1,085

Redemptions1

(547)

(592)

(1,024)

Net sales (redemptions)1

82

132

61

Net exchanges

0

0

1

Impact of foreign exchange2

(275)

35

532

Market gains and (losses)3

83

(90)

(32)

Ending assets

$        18,991

$        19,101

$        19,426

Multi-asset

Beginning assets

$         2,854

$         2,940

$         2,883

Sales1

58

59

63

Redemptions1

(94)

(92)

(105)

Net sales (redemptions)1

(36)

(33)

(42)

Net exchanges

1

(121)

2

Market gains and (losses)3

(41)

68

(17)

Ending assets

$         2,778

$         2,854

$         2,826

Total Long-term Assets

Beginning assets

$       219,980

$       218,433

$       199,229

Sales1

15,705

15,623

14,504

Redemptions1

(13,868)

(16,802)

(13,410)

Net sales (redemptions)1

1,837

(1,179)

1,094

Net exchanges

10

33

(10)

Impact of foreign exchange2

(602)

148

1,371

Market gains and (losses)3

1,174

2,545

967

Ending assets

$       222,399

$       219,980

$       202,651

1)

For certain accounts, including separately managed accounts, institutional accounts, certain sub-advised funds and other managed offerings, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.

2)

Reflects the impact of translating non-U.S. dollar denominated assets under management (AUM) into U.S. dollars for reporting purposes.

3)

Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.

Unaudited Changes in Long-Term Assets - By Asset Class and Offering Type

(in millions)

Quarter Ended

March 31, 2026

Equity

Fixed Income

Alternative / Private
Markets

Multi-asset

Total

Funds

Separate
Accounts1

Funds

Separate
Accounts1

Funds

Separate
Accounts1

Funds

Separate
Accounts1

Funds.

Separate
Accounts1

Beginning assets

$   54,988

$   42,910

$   45,973

$   54,154

$  12,085

$   7,016

$    2,850

$       4

$ 115,896

$  104,084

Sales

5,855

3,236

3,985

1,942

609

20

58

0

10,507

5,198

Redemptions

(4,561)

(2,317)

(3,993)

(2,356)

(318)

(229)

(94)

0

(8,966)

(4,902)

Net sales (redemptions)

1,294

919

(8)

(414)

291

(209)

(36)

0

1,541

296

Net exchanges

(169)

30

148

0

0

0

1

0

(20)

30

Impact of foreign exchange2

(158)

(129)

(26)

(14)

(159)

(116)

0

0

(343)

(259)

Market gains and (losses)3

(767)

1,914

(166)

151

122

(39)

(41)

0

(852)

2,026

Ending assets

$   55,188

$   45,644

$   45,921

$   53,877

$  12,339

$   6,652

$    2,774

$       4

$ 116,222

$  106,177

1)

Includes separately managed accounts, institutional accounts, certain sub-advised funds and other managed offerings. For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.

2)

Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.

3)

Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.

Unaudited Changes in Long-Term Assets - By Offering Type

(in millions)

Quarter Ended

March 31, 2026

Dec. 31, 2025

March 31, 2025

Total Fund Assets

Beginning assets

$       115,896

$       115,215

$       103,567

Sales

10,507

10,419

9,279

Redemptions

(8,966)

(10,835)

(8,763)

Net sales (redemptions)

1,541

(416)

516

Net exchanges

(20)

33

0

Impact of foreign exchange1

(343)

34

685

Market gains and (losses)2

(852)

1,030

(479)

Ending assets

$       116,222

$       115,896

$       104,289

Total Separate Account Assets3

Beginning assets

$       104,084

$       103,218

$        95,662

Sales4

5,198

5,204

5,225

Redemptions4

(4,902)

(5,967)

(4,647)

Net sales (redemptions)4

296

(763)

578

Net exchanges

30

0

(10)

Impact of foreign exchange1

(259)

114

686

Market gains and (losses)2

2,026

1,515

1,446

Ending assets

$       106,177

$       104,084

$        98,362

Total Long-term Assets3

Beginning assets

$       219,980

$       218,433

$       199,229

Sales4

15,705

15,623

14,504

Redemptions4

(13,868)

(16,802)

(13,410)

Net sales (redemptions)4

1,837

(1,179)

1,094

Net exchanges

10

33

(10)

Impact of foreign exchange1

(602)

148

1,371

Market gains and (losses)2

1,174

2,545

967

Ending assets

$       222,399

$       219,980

$       202,651

1)

Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.

2)

Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.

3)

Includes separately managed accounts, institutional accounts, certain sub-advised funds and other managed offerings.

4)

For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.

Unaudited Managed Assets

(in millions)

March 31, 2026

Dec. 31, 2025

Sept. 30, 2025

June 30, 2025

March 31, 2025

By Asset Class

Equity

$       100,832

$         97,898

$         94,656

$         88,994

$         80,913

Fixed-Income

99,798

100,127

101,813

98,687

99,486

Alternative / Private Markets

18,991

19,101

19,024

20,738

19,426

Multi-Asset

2,778

2,854

2,940

2,856

2,826

Total Long-Term Assets

222,399

219,980

218,433

211,275

202,651

Money Market

684,748

682,604

652,767

634,400

637,122

Total Managed Assets

$       907,147

$       902,584

$       871,200

$       845,675

$       839,773

By Offering Type

Funds:

Equity

$         55,188

$         54,988

$         54,110

$         49,359

$         43,910

Fixed-Income

45,921

45,973

46,478

45,415

45,800

Alternative / Private Markets

12,339

12,085

11,814

12,905

11,879

Multi-Asset

2,774

2,850

2,813

2,730

2,700

Total Long-Term Assets

116,222

115,896

115,215

110,409

104,289

Money Market

502,775

508,403

492,701

468,044

464,912

Total Fund Assets

$       618,997

$       624,299

$       607,916

$       578,453

$       569,201

Separate Accounts:

Equity

$         45,644

$         42,910

$         40,546

$         39,635

$         37,003

Fixed-Income

53,877

54,154

55,335

53,272

53,686

Alternative / Private Markets

6,652

7,016

7,210

7,833

7,547

Multi-Asset

4

4

127

126

126

Total Long-Term Assets

106,177

104,084

103,218

100,866

98,362

Money Market

181,973

174,201

160,066

166,356

172,210

Total Separate Account Assets

$       288,150

$       278,285

$       263,284

$       267,222

$       270,572

Total Managed Assets

$       907,147

$       902,584

$       871,200

$       845,675

$       839,773

Unaudited Average Managed Assets

Quarter Ended

(in millions)

March 31, 2026

Dec. 31, 2025

Sept. 30, 2025

June 30, 2025

March 31, 2025

By Asset Class

Equity

$       102,037

$         96,404

$         92,436

$         83,564

$         82,105

Fixed-Income

100,996

100,855

99,206

98,365

99,360

Alternative / Private Markets

19,232

18,971

19,862

20,053

19,012

Multi-Asset

2,859

2,836

2,895

2,779

2,900

Total Long-Term Assets

225,124

219,066

214,399

204,761

203,377

Money Market

690,450

654,635

645,092

632,543

639,827

Total Avg. Managed Assets

$       915,574

$       873,701

$       859,491

$       837,304

$       843,204

By Offering Type

Funds:

Equity

$         56,987

$         55,101

$         51,828

$         45,965

$         45,260

Fixed-Income

46,096

46,116

45,743

44,972

45,715

Alternative / Private Markets

12,254

11,871

12,347

12,370

11,610

Multi-Asset

2,855

2,833

2,770

2,654

2,774

Total Long-Term Assets

118,192

115,921

112,688

105,961

105,359

Money Market

507,752

493,355

482,237

462,683

463,727

Total Avg. Fund Assets

$       625,944

$       609,276

$       594,925

$       568,644

$       569,086

Separate Accounts:

Equity1

$         45,050

$         41,303

$         40,608

$         37,599

$         36,845

Fixed-Income

54,900

54,739

53,463

53,393

53,645

Alternative / Private Markets

6,978

7,100

7,515

7,683

7,402

Multi-Asset1

4

3

125

125

126

Total Long-Term Assets

106,932

103,145

101,711

98,800

98,018

Money Market

182,698

161,280

162,855

169,860

176,100

Total Avg. Separate Account Assets

$       289,630

$       264,425

$       264,566

$       268,660

$       274,118

Total Avg. Managed Assets

$       915,574

$       873,701

$       859,491

$       837,304

$       843,204

1) A Separate Account was reclassified from Multi-Asset to Equity effective October 1, 2025.

SOURCE Federated Hermes, Inc.

Federated Hermes (FHI - Free Report) came out with quarterly earnings of $1.27 per share, beating the Zacks Consensus Estimate of $1.2 per share. This compares to earnings of $1.1 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of +5.97%. A quarter ago, it was expected that this one of the nation's largest managers of money market funds would post earnings of $1.2 per share when it actually produced earnings of $1.39, delivering a surprise of +15.83%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Federated Hermes, which belongs to the Zacks Financial - Investment Management industry, posted revenues of $478.96 million for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 0.17%. This compares to year-ago revenues of $423.54 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Federated Hermes shares have added about 8.2% since the beginning of the year versus the S&P 500's gain of 4.2%.

What's Next for Federated Hermes?While Federated Hermes has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Federated Hermes was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.21 on $484.37 million in revenues for the coming quarter and $5.08 on $1.95 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Investment Management is currently in the bottom 19% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the same industry, Affiliated Managers Group (AMG - Free Report) , has yet to report results for the quarter ended March 2026. The results are expected to be released on May 1.

This asset manager is expected to post quarterly earnings of $8.10 per share in its upcoming report, which represents a year-over-year change of +55.8%. The consensus EPS estimate for the quarter has been revised 0% lower over the last 30 days to the current level.

Affiliated Managers Group's revenues are expected to be $543.02 million, up 9.4% from the year-ago quarter.

Federated Hermes, Inc. (FHI) Q1 2026 Earnings Call Transcript

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

Cash flow can come from bond interest, interest from other types of investments, and, of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Headquartered in Pittsburgh, Federated Hermes (FHI - Free Report) is a Finance stock that has seen a price change of 4.36% so far this year. The one of the nation's largest managers of money market funds is currently shelling out a dividend of $0.34 per share, with a dividend yield of 2.5%. This compares to the Financial - Investment Management industry's yield of 2.61% and the S&P 500's yield of 1.43%.

Looking at dividend growth, the company's current annualized dividend of $1.36 is up 2.3% from last year. Over the last 5 years, Federated Hermes has increased its dividend 3 times on a year-over-year basis for an average annual increase of 0.78%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Federated Hermes's current payout ratio is 26%, meaning it paid out 26% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, FHI expects solid earnings growth. The Zacks Consensus Estimate for 2026 is $5.08 per share, which represents a year-over-year growth rate of 2.01%.

Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide a quarterly payout.

High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, FHI is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).

, /PRNewswire/ -- Federated Hermes, Inc. (NYSE: FHI), a global leader in active investing, today announced that monthly fund composition and performance data for Federated Hermes Premier Municipal Income Fund (NYSE: FMN) as of April 30, 2026, is now available in the Products section of FederatedHermes.com/us. To order hard copies of this data or to be placed on a mailing list, call 800-245-0242 x5587538, email [email protected] or write to Federated Hermes, 1001 Liberty Avenue, Floor 23, Pittsburgh, PA 15222.

Federated Hermes, Inc. (NYSE: FHI) is a global leader in active, responsible investment management, with $907.1 billion in assets under management, as of March 31, 2026. We deliver investment solutions that help investors target a broad range of outcomes and provide equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies to more than 11,000 institutions and intermediaries worldwide. Our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated Hermes has more than 2,000 employees in London, New York, Boston and offices worldwide. For more information, visit FederatedHermes.com/us.

###

SOURCE Federated Hermes, Inc.

My 'Buy' rating for Federated Hermes (FHI) remains intact, after assessing the stock's future growth and diversification potential. FHI hired Kevin Barr from BNY to head its digital asset arm; this business's outlook is positive with expectations of a rising institutional adoption rate for tokenized money market funds. Internal promotions in equities and fixed income ensure leadership continuity and support the firm's push for a more balanced asset mix.

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Federated Hermes (FHI - Free Report) is headquartered in Pittsburgh, and is in the Finance sector. The stock has seen a price change of 5.26% since the start of the year. Currently paying a dividend of $0.38 per share, the company has a dividend yield of 2.77%. In comparison, the Financial - Investment Management industry's yield is 2.92%, while the S&P 500's yield is 1.42%.

Looking at dividend growth, the company's current annualized dividend of $1.52 is up 14.3% from last year. Over the last 5 years, Federated Hermes has increased its dividend 3 times on a year-over-year basis for an average annual increase of 0.78%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Federated Hermes's current payout ratio is 26%, meaning it paid out 26% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for FHI for this fiscal year. The Zacks Consensus Estimate for 2026 is $5.10 per share, representing a year-over-year earnings growth rate of 2.41%.

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers its shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, FHI is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).

Federated Hermes Money Market Management Digital Treasury Fund is structured to meet reserve and liquidity requirements supporting collateral management for payment-stablecoin issuers Builds on 50-year legacy of money market innovation , /PRNewswire/ -- Federated Hermes, Inc. (NYSE: FHI), a global leader in active investing, today introduced Federated Hermes Money Market Management Digital Treasury Fund–Reserve Shares (NASDAQ: OFFXX).

Federated Hermes Money Market Management Digital Treasury Fund seeks to provide current income consistent with stability of principal by investing in a portfolio of US dollar cash and US Treasury investments that mature within 93 days and overnight repurchase agreements fully collateralized by US Treasury securities. In pursuing its investment objective and implementing its investment strategies, the fund intends to comply with Rule 2a-7 under the Investment Company Act of 1940.

The fund is Federated Hermes' first product designed to satisfy the requirements for eligible reserve assets that payment-stablecoin issuers are required to maintain under the Guiding and Establishing National Innovation for US Stablecoins Act, or GENIUS Act, which was passed in July 2025. The Act provides a regulatory framework for stablecoins, a type of digital asset, to be backed by high-quality liquid assets on a 1:1 basis. While the fund itself does not employ blockchain technology with respect to the Reserve Shares, fund shares are expected to be used primarily by participants in the broader blockchain ecosystem. Reserve Shares of the fund may be purchased and held by individuals, payment-stablecoin issuers, and institutional investors directly or through intermediaries, including intermediaries that use blockchain technology to maintain a record of share ownership for their customers. In the future, the fund may seek to employ blockchain technology to maintain a record of share ownership with respect to the Reserve Shares or additional share classes.

For more than 50 years, Federated Hermes has been a leader in money market innovation, launching the first fund to include "money market" in its name in 1974. Drawing on that experience, the fund is managed by Susan Hill, CFA, senior portfolio manager and head of government liquidity group, and John Wyda, CFA, senior portfolio manager and senior investment analyst. The firm manages a record $684.7 billion in money market assets as of March 31, 2026.

"Liquidity management is a core business of Federated Hermes and we offer one of the largest menus of targeted solutions," said Paul A. Uhlman, president and chief executive officer of the Federated Advisory Companies. "Federated Hermes is proud to advance strategic initiatives that bring together the strength of money market investments and our management expertise. As the industry continues to explore the digital space and tokenized money market offerings, we continue to vet opportunities that employ the efficiency and transparency of blockchain technology."

Federated Hermes, Inc. (NYSE: FHI) is a global leader in active investment management, with $907.1 billion in assets under management as of March 31, 2026. We deliver investment solutions that help investors target a broad range of outcomes and provide equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies to more than 11,000 institutions and intermediaries worldwide. Our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated Hermes has more than 2,000 employees in London, New York, Boston and offices worldwide. For more information, visit FederatedHermes.com/us.

# # #

You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund's sponsor is not required to reimburse the fund for losses, and you should not expect that the sponsor will provide financial support to the fund at any time, including during periods of market stress. Government money market funds are not required to adopt a liquidity fee framework.

Since the fund's principal investment strategy limits its investments to eligible reserve assets in which payment stablecoin issuers are permitted to maintain under the GENIUS Act, the fund's yield may be lower than other money market funds that are permitted to invest in a wider universe of investments.

Investors should carefully consider the fund's investment objectives, risks, charges and expenses before investing. To obtain a summary prospectus or prospectus containing this and other information, contact us at 1-800-341-7400 or visit FederatedHermes.com/us. Please carefully read the summary prospectus or the prospectus before investing.

Federated Securities Corp. is Distributor of the Federated Hermes mutual funds.

SOURCE Federated Hermes, Inc.

Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

Cash flow can come from bond interest, interest from other types of investments, and, of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Based in Pittsburgh, Federated Hermes (FHI - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 10.72%. The one of the nation's largest managers of money market funds is currently shelling out a dividend of $0.38 per share, with a dividend yield of 2.64%. This compares to the Financial - Investment Management industry's yield of 2.67% and the S&P 500's yield of 1.45%.

Looking at dividend growth, the company's current annualized dividend of $1.52 is up 14.3% from last year. Over the last 5 years, Federated Hermes has increased its dividend 3 times on a year-over-year basis for an average annual increase of 0.78%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Federated Hermes's current payout ratio is 26%, meaning it paid out 26% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, FHI expects solid earnings growth. The Zacks Consensus Estimate for 2026 is $5.10 per share, with earnings expected to increase 2.41% from the year ago period.

From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.

Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, FHI is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).

Key Takeaways BLDR to post Q1 on April 30 premarket, with consensus EPS of 39 cents and net sales of $3.17B, both down Y/Y.BLDR sales may slump on soft residential demand, smaller homes and muted multifamily; value-added demand weak.BLDR's margins face low commodity pricing plus rent/insurance inflation, partly offset by $100M SG&A actions. Builders FirstSource, Inc. (BLDR - Free Report) is slated to report first-quarter 2026 results on April 30, before market open.

In the last reported quarter, the company’s adjusted earnings per share (EPS) and net sales missed the Zacks Consensus Estimate by 13.9% and 2.3%, respectively. On a year-over-year basis, both top and bottom lines tumbled 12.1% and 51.5%, respectively.

BLDR’s earnings topped the consensus mark in three of the trailing four quarters and missed on one occasion, the average surprise being negative 0.2%.

Trend in Estimate Revision of BLDRThe Zacks Consensus Estimate for Builders FirstSource’s first-quarter EPS has moved south to 39 cents from 41 cents in the past 30 days. The estimated figure indicates a 74.2% year-over-year decline from EPS of $1.51 reported in the year-ago quarter.

The consensus estimate for net sales is pegged at $3.17 billion, indicating a decline of 13.3% from $3.66 billion reported in the year-ago quarter.

Factors to Shape Builders FirstSource’s Q1 ResultsNet Sales

BLDR’s top-line performance in the to-be-reported quarter is expected to remain under pressure due to continued softness in residential construction markets. The company is likely to have been affected by weak housing affordability, muted consumer confidence and cautious builder activity, all of which weighed on demand exiting 2025. Single-family revenues may remain soft as builders pivot toward smaller, less complex homes to incentivize affordability, thereby reducing the sales dollars per start for BLDR. Furthermore, management anticipates that multifamily activity will remain muted, with meaningful improvements unlikely to materialize until the latter half of 2026.

BLDR’s value-added product category (representing approximately 47.7% of full-year 2025 net sales), which includes manufactured components and windows, doors and millwork, is likely to have been pressured by softer single-family activity, reduced home size and lower structural complexity, limiting demand for higher-content solutions.

On the other hand, relatively stable contributions from Specialty building products & services (about 26.8% of net sales) and Lumber & lumber sheet goods (around 25.5%) are expected to have provided some offset, supported by steady repair and remodel activity. However, commodity deflation — particularly in lumber — remains a key headwind, weighing on overall pricing and top-line performance.

BLDR’s continued focus on strategic acquisitions, disciplined cost management, productivity initiatives and expanding digital capabilities is expected to have supported performance to some extent, helping mitigate the impact of pricing pressure and moderating demand in a seasonally softer quarter.

Margins

Margins are likely to have remained under pressure in the first quarter due to lower operating leverage and a challenging commodity pricing environment. Management noted that the commodity composite exited 2025 below $350 per thousand board feet and forecasted a 2026 average of $365 to $385, which remains significantly below historical norms.

Additionally, ongoing inflationary pressures on rent and insurance, highlighted by a year-end insurance true-up, remain key areas of focus. To cushion these impacts, BLDR has initiated $100 million in SG&A-related cost actions, including $75 million in direct year-over-year reductions through facility consolidations, tighter discretionary spending and optimized labor management. These measures are intended to support profitability as the benefits materialize throughout the year.

What the Zacks Model Predicts for BLDROur proven model does not conclusively predict an earnings beat for Builders FirstSource this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, this is not the case here, as you will see below.

BLDR’s Earnings ESP: BLDR has an Earnings ESP of +10.01%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank of BLDR: The company currently carries a Zacks Rank of #4 (Sell).

Stocks With the Favorable CombinationHere are some companies in the Zacks Retail-Wholesale sector, which, per our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.

CAVA Group, Inc. (CAVA - Free Report) currently has an Earnings ESP of +11.61% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the to-be-reported quarter, CAVA’s earnings are expected to decline 22.7%. CAVA's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 26.5%.

The Cheesecake Factory Incorporated (CAKE - Free Report) currently has an Earnings ESP of +3.38% and a Zacks Rank of 3.

In the to-be-reported quarter, Cheesecake Factory’s earnings are expected to register a 10.8% year-over-year rise. Cheesecake Factory’s earnings surpassed estimates in each of the trailing four quarters, with an average beat of 9.9%.

Chipotle Mexican Grill, Inc. (CMG - Free Report) has an Earnings ESP of +1.80% and a Zacks Rank of 3 at present.

In the to-be-reported quarter, Chipotle’s earnings are expected to register a 17.2% year-over-year decline. Chipotle’s earnings surpassed estimates in each of the trailing four quarters, with an average beat of 3.6%.

IRVING, Texas--(BUSINESS WIRE)--Builders FirstSource, Inc. (NYSE: BLDR) today reported its results for the first quarter ended March 31, 2026.

First Quarter 2026 Highlights

All Year-Over-Year Comparisons Unless Otherwise Noted:

Net sales were $3.3 billion, a 10.1% decrease, primarily due to a lower starts environment. The decline reflects lower core organic net sales and commodity deflation, partially offset by growth from acquisitions. Gross profit was $0.9 billion, a decrease of 16.7%. Gross profit margin percentage decreased 220 basis points to 28.3%, primarily driven by a lower starts environment. Net income (loss) was $(47.4) million, or diluted EPS of $(0.43) compared to diluted EPS of $0.84 in the prior year period. Net income (loss) as a percent of net sales decreased by 400 basis points to (1.4)%. Adjusted EBITDA decreased 42.1% to $213.8 million, primarily driven by lower gross profit. Adjusted EBITDA margin declined by 360 basis points to 6.5%, attributable to lower gross margin and reduced operating leverage. Cash provided by operating activities was $87.5 million, a decrease of $44.9 million compared to the prior year period. The Company's free cash flow was $42.7 million, a decrease of 5.1%, compared to $45.0 million in the prior year period. The decrease was primarily driven by lower net income. The Company repurchased 3.3 million shares of its common stock at an average price of $92.25 per share for $302.9 million, inclusive of applicable fees and taxes. “Our first quarter results reflect the adaptability of our operating model as we delivered strong strategic share growth in a weak housing market. Across the organization, we remain focused on the factors within our control, including serving our customers, expanding our differentiated portfolio of value-added solutions, and leveraging technology to accelerate growth and drive operational excellence. This disciplined approach continues to strengthen our leading position as a trusted, full-service partner to homebuilders,” commented Peter Jackson, CEO of Builders FirstSource.

Mr. Jackson continued, “By continuing to invest in innovation and the capabilities that matter most to our customers, we are reinforcing our role as a preferred provider and extending our competitive advantages. Our strategy enables us to outperform as the market normalizes and to deliver sustainable, long-term value for our shareholders.”

Pete Beckmann, CFO of Builders FirstSource, added, “Our first quarter performance demonstrates our disciplined execution and focus on cost and working capital management. We are generating strong cash flow through the cycle, investing selectively in high-return opportunities, and maintaining a strong balance sheet. This balanced approach enables us to navigate the current environment while compounding shareholder value over time.”

First Quarter 2026 Financial Performance Highlights

All Year-Over-Year Comparisons Unless Otherwise Noted:

Net Sales

Net sales were $3.3 billion, a 10.1% decrease, primarily due to a lower starts environment. The decrease reflects an 8.3% decline in core organic net sales, as well as commodity deflation of 3.3%, partially offset by growth from acquisitions of 1.5%. Core organic net sales declined 8.3%. Single Family declined 11.1%, Multi-Family declined 1.4%, and Repair and Remodel (“R&R”)/Other declined 1.3%. On a weighted basis, Single Family lowered net sales by 7.9%, R&R/Other by 0.3%, and Multi-Family by 0.1%. Gross Profit

Gross profit was $0.9 billion, a decrease of 16.7%. Gross profit margin percentage decreased 220 basis points to 28.3%, primarily driven by a lower starts environment. Selling, General and Administrative Expenses

SG&A was $912.5 million, a decrease of $18.4 million, or 2.0%, primarily driven by lower variable compensation due to lower core organic sales, partially offset by additional expenses from operations acquired within the last twelve months. As a percentage of net sales, total SG&A increased by 240 basis points to 27.8%, primarily attributable to reduced operating leverage. Net Interest Expense

Net interest expense increased $9.5 million to $74.4 million, primarily due to higher average debt balances. Income Tax Expense (Benefit)

Income tax was $(10.5) million, compared to $23.2 million in the prior year period, primarily driven by a decrease in income before income taxes. The effective tax rate in the first quarter decreased 130 basis points year-over-year to 18.1%, primarily related to an increase in stock-based compensation benefit. Net Income (Loss)

Net income (loss) was $(47.4) million, or $(0.43) earnings per diluted share, compared to net income of $96.3 million, or $0.84 earnings per diluted share, in the same period a year ago. The decrease in net income was primarily driven by lower gross profit and higher net interest expense, partially offset by lower SG&A and an income tax benefit. Net income (loss) as a percentage of net sales was (1.4)%, a decrease of 400 basis points from the prior year period, primarily due to lower gross profit margins and higher net interest expense, partially offset by lower SG&A and an income tax benefit. Adjusted Net Income

Adjusted net income was $30.0 million, a decrease of 82.6%, primarily driven by lower gross profit and higher net interest expense, partially offset by lower SG&A and income tax expenses. Adjusted Earnings Per Diluted Share

Adjusted earnings per diluted share was $0.27, compared to $1.51 in the same period a year ago. The 82.1% decrease was primarily driven by lower adjusted net income, partially offset by share repurchases. Adjusted EBITDA

Adjusted EBITDA decreased 42.1% to $213.8 million, primarily driven by lower gross profit. Adjusted EBITDA margin declined by 360 basis points from the prior year period to 6.5%, primarily due to lower gross profit margins and reduced operating leverage. Capital Structure, Leverage, and Liquidity Information

For the three months ended March 31, 2026, cash provided by operating activities was $87.5 million, and cash used in investing activities was $57.8 million. The Company's free cash flow was $42.7 million, compared to $45.0 million in the prior year period, largely the result of lower net income as well as lower capital expenditures. Liquidity as of March 31, 2026, was approximately $1.5 billion, consisting of $1.4 billion in net borrowing availability under the revolving credit facility and $0.1 billion of cash on hand. As of March 31, 2026, LTM Adjusted EBITDA was $1.4 billion and net debt was $4.6 billion, resulting in a net debt to LTM Adjusted EBITDA ratio of 3.2x, compared to 2.0x in the prior year period. In the first quarter, the Company repurchased 3.3 million shares of its common stock at an average price of $92.25 per share for $302.9 million, inclusive of applicable fees and taxes. On April 29, 2026, the Board of Directors authorized the repurchase of up to $500 million of the Company’s outstanding shares of common stock, which includes the approximately $200 million remaining under its prior April 2025 authorization. Since the inception of its buyback program in August 2021, the Company has repurchased 102.6 million shares of its common stock, or 49.7% of its total shares outstanding, at an average price of $81.26 per share for a total cost of $8.3 billion, inclusive of applicable fees and taxes. Productivity Savings From Operational Excellence

For the first quarter, the Company delivered approximately $6 million in productivity savings related to operational excellence and supply chain initiatives. The Company expects to deliver $50 million to $70 million in productivity savings in 2026. 2026 Full Year Total Company Outlook

For 2026, the Company expects to achieve the financial performance highlighted below. Projected Net Sales and Adjusted EBITDA include the expected impact of price, commodities, and margins. We are not providing a quantitative reconciliation of our forward-looking guidance of adjusted EBITDA, adjusted EBITDA margin, or free cash flow because we are unable to predict with reasonable certainty all the components required to provide such reconciliation without unreasonable efforts, which are uncertain and could have a material impact on GAAP reported results for the guidance period. See “Non-GAAP Financial Measures” for additional information.

Net Sales to be in a range of $14.6 billion to $15.6 billion. Gross Profit margin to be in a range of 27.5% to 29%. Adjusted EBITDA to be in a range of $1.1 billion to $1.5 billion. Adjusted EBITDA margin to be in a range of 7.5% to 9.6%. Free cash flow of approximately $0.4 billion to $0.5 billion, assuming average commodity prices in the range of $390 to $410 per thousand board foot (mbf). 2026 Full Year Assumptions

The Company’s anticipated 2026 performance is based on several assumptions for the full year, including the following:

Within the Company’s geographies, Single Family starts are projected to be down low-single digits, Multi-Family starts are projected to be down low-single digits, and R&R is projected to be down 1%. Acquisitions completed within the last twelve months are projected to add net sales growth of approximately 1%. Total capital expenditures in the range of $225 million to $275 million. Interest expense in the range of $275 million to $285 million. An effective tax rate of 20% to 22%. Depreciation and amortization expenses in the range of $525 million to $575 million. No change in selling days versus 2025. Conference Call

Builders FirstSource will host a conference call and webcast on Thursday, April 30, 2026, to discuss the Company’s financial results and other business matters. The teleconference will begin at 8:00 a.m. Central Time and will be hosted by Peter Jackson, Chief Executive Officer, and Pete Beckmann, Chief Financial Officer.

The live webcast, archived replay, and the accompanying presentation can be accessed on the Company's investor relations website at investors.bldr.com under the Events and Presentations section. The online archive of the webcast will be available for approximately 90 days.

To participate in the teleconference, please dial into the call a few minutes before the start time at 833-316-2483 (U.S. and Canada) or 785-838-9284 (international), Conference ID: BLDRQ126.

Upcoming Events

Management will participate in investor meetings at the Oppenheimer Industrial Growth Conference (virtually) on May 4, 2026, the KeyBanc Industrials and Basic Materials Conference in Boston on May 28, and the Wells Fargo Industrials and Materials Conference in Chicago on June 9.

About Builders FirstSource

Builders FirstSource (NYSE: BLDR), headquartered in Irving, Texas, is the nation's leading provider of building materials for professional builders in new residential construction and repair and remodeling. We deliver integrated homebuilding solutions by manufacturing, supplying, and installing a full range of structural and related building products. With approximately 570 locations across 43 states, we serve 48 of the top 50 and 94 of the top 100 Core Based Statistical Areas (CBSAs), ensuring broad geographic coverage and enhancing our ability to partner with our customers. Our leading network of strategically located manufacturing facilities produces factory-built roof and floor trusses, wall panels, vinyl windows, custom millwork and trim, manufactured and semi-custom modular homes, as well as engineered wood that we design and cut specifically for each home. We also assemble interior and exterior doors into pre-hung units for easy installation. Additionally, we distribute a wide range of building products, including lumber, sheet goods, windows, doors, millwork, and specialty items. Our services, which vary by market, include professional installation, turnkey framing, and shell construction. Supported by the latest construction innovations and digital solutions, we help drive greater efficiency across homebuilding. Learn more at www.bldr.com

Forward-Looking Statements

Statements in this news release and the schedules hereto that are not purely historical facts or that necessarily depend upon future events, including statements about expected market share gains, forecasted financial performance, industry and business outlook or other statements about anticipations, beliefs, expectations, hopes, synergies, intentions or strategies for the future, may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on forward-looking statements. In addition, oral statements made by the Company’s directors, officers and employees to the investor and analyst communities, media representatives and others, depending upon their nature, may also constitute forward-looking statements. As with the forward-looking statements included in this release, these forward-looking statements are by nature inherently uncertain, and actual results or events may differ materially as a result of many factors. All forward-looking statements are based upon information available to Builders FirstSource on the date this release was submitted. Builders FirstSource undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements involve risks and uncertainties, many of which are beyond the Company’s control or may be currently unknown to the Company, that could cause actual events or results to differ materially from the events or results described in the forward-looking statements; such risks or uncertainties include those related to the Company’s growth strategies, including acquisitions, organic growth and digital and technology strategies, including the Company’s ability to drive growth by incorporating artificial intelligence and machine learning solutions into its platform, or the dependence of the Company’s revenues and operating results on, among other things, the homebuilding industry and, to a lesser extent, repair and remodel activity, which in each case is dependent on economic conditions, including inflation, interest rates, home size and affordability, consumer confidence, labor and supply shortages, tariffs and duties, and also lumber and other commodity prices. The Company may not succeed in addressing these and other risks. Further information regarding factors that could affect our financial and other results can be found in the risk factors section of Builders FirstSource’s most recent annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) and may also be described from time to time in the other reports Builders FirstSource files with the SEC. Consequently, all forward-looking statements in this release are qualified by the factors, risks and uncertainties contained therein.

Non-GAAP Financial Measures

The financial measures entitled Adjusted EBITDA, LTM Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, Adjusted net income as a percent of net sales, basic Adjusted net income per share, diluted Adjusted net income per share, Adjusted SG&A, Adjusted SG&A as a percent of net sales, and Free cash flow are not financial measures recognized under GAAP and are therefore non-GAAP financial measures. The Company believes that these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and operating results.

Adjusted EBITDA is defined as GAAP net income before depreciation and amortization expense, net interest expense, income tax expense and other non-cash or special items including stock compensation expense, acquisition and related expense, technology implementation expense, debt issuance and refinancing costs, severance and gain on sale of assets and other one-time costs partially offset by the tax effect of those adjustments to net income. LTM Adjusted EBITDA is defined as Adjusted EBITDA for the last twelve consecutive months. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net sales. Adjusted net income is defined as GAAP net income before non-cash or special items including acquisition and related expense, technology implementation expense, debt issuance and refinancing cost and amortization expense partially offset by the tax effect of those adjustments to net income. Adjusted net income as a percent of net sales is defined as Adjusted net income divided by net sales. Basic Adjusted net income per share is defined as Adjusted net income divided by weighted average basic common shares outstanding while diluted Adjusted net income per share is defined as Adjusted net income divided by weighted average diluted common shares outstanding. Adjusted SG&A is defined as GAAP SG&A expense before non-cash or special items including depreciation expense, amortization expense, stock compensation expense, acquisition and related expense, and technology implementation expense. Adjusted SG&A as a percent of sales is defined as Adjusted SG&A divided by net sales. Free cash flow is defined as GAAP net cash from operating activities less capital expenditures, net of proceeds from the sale of property, plant and equipment.

Company management uses Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, Adjusted net income as a percent of net sales, basic Adjusted net income per share and diluted Adjusted net income per share as supplemental measures in its evaluation of the Company’s business, including for trend analysis, purposes of determining management incentive compensation and budgeting and planning purposes. Company management believes that these measures provide a meaningful measure of the Company’s performance and a better baseline for comparing financial performance across periods because these measures eliminate the effects of period to period changes, in the case of Adjusted EBITDA and Adjusted EBITDA margin, in taxes, costs associated with capital investments, net interest expense, stock compensation expense, and other non-cash and non-recurring items and, in the case of Adjusted net income, Adjusted net income as a percent of sales, and Adjusted net income per diluted share, in certain non-recurring items. Company management also uses free cash flow as a supplemental measure in its evaluation of the Company’s business, including for purposes of its internal liquidity assessments. Company management believes that free cash flow provides a meaningful evaluation of the Company’s liquidity.

The Company believes that these non-GAAP financial measures provide additional tools for investors to use in evaluating ongoing operating results, cash flows and trends and in comparing the Company’s financial measures with other companies in the Company’s industry, which may present similar non-GAAP financial measures to investors. However, the Company’s calculations of these financial measures are not necessarily comparable to similarly titled measures reported by other companies. Company management does not consider these financial measures in isolation or as alternatives to financial measures determined in accordance with GAAP. Furthermore, items that are excluded and other adjustments and assumptions that are made in calculating these non-GAAP financial measures are significant components in understanding and assessing the Company’s financial performance. These non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, the Company’s GAAP financial measures. Further, because these non-GAAP financial measures are not determined in accordance with GAAP and are thus susceptible to varying calculations, the non-GAAP financial measures, as presented, may not be comparable to other similarly titled measures of other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables below.

The Company’s Adjusted EBITDA outlook, free cash flow and full-year forecast for its effective tax rate on operations exclude the impact of certain income and expense items that management believes are not part of underlying operations. These items may include, but are not limited to, loss on early extinguishment of debt, restructuring charges, certain tax items, and charges associated with non-recurring costs such as professional and legal fees associated with our acquisitions and enterprise resource planning (ERP) program. The Company’s management cannot estimate on a forward-looking basis without unreasonable effort the impact these income and expense items will have on its reported net income, operating cash flow and its reported effective tax rate because these items, which could be significant, are difficult to predict and may be highly variable. As a result, the Company does not provide a reconciliation to the most comparable GAAP financial measure for its Adjusted EBITDA or free cash flow outlook or its effective tax rate on operations forecast. Please see the Forward-Looking Statements section of this release for a discussion of certain risks relevant to the Company’s outlook.

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(unaudited)

  Three Months Ended
March 31,

(in thousands, except per share amounts)

2026

2025

Net sales

$

3,287,077

$

3,657,496

Cost of sales

2,358,111

2,542,255

Gross margin

928,966

1,115,241

Selling, general and administrative expenses

912,450

930,800

Income from operations

16,516

184,441

Interest expense, net

74,392

64,892

Income (loss) before income taxes

(57,876

)

119,549

Income tax expense (benefit)

(10,462

)

23,245

Net income (loss)

$

(47,414

)

$

96,304

Net income (loss) per share:

Basic

$

(0.43

)

$

0.85

Diluted

$

(0.43

)

$

0.84

Weighted average common shares:

Basic

109,870

113,675

Diluted

109,870

114,339

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

  Three Months Ended
March 31,

(in thousands)

2026

2025

Cash flows from operating activities:

Net income (loss)

$

(47,414

)

$

96,304

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

148,360

145,031

Deferred income taxes

51,054

(10,638

)

Stock-based compensation expense

13,628

14,238

Other non-cash adjustments

1,919

(6,774

)

Changes in assets and liabilities, net of assets acquired and liabilities assumed:

Receivables

(157,768

)

30,599

Inventories, net

(88,382

)

(82,503

)

Contract assets

(17,600

)

(10,851

)

Other current assets

(2,141

)

(15,013

)

Other assets and liabilities

550

(16,213

)

Accounts payable

211,270

142,891

Accrued liabilities

(37,744

)

(166,294

)

Contract liabilities

11,722

11,551

Net cash provided by operating activities

87,454

132,328

Cash flows from investing activities:

Cash used for acquisitions, net of cash acquired

(12,407

)

(824,795

)

Purchases of property, plant and equipment

(46,745

)

(99,974

)

Proceeds from sale of property, plant and equipment

1,969

12,713

Cash used for equity investments

(664

)

—

Net cash used in investing activities

(57,847

)

(912,056

)

Cash flows from financing activities:

Borrowings under revolving credit facility

240,000

1,142,000

Repayments under revolving credit facility

(40,000

)

(367,000

)

Repayments of long-term debt and other loans

(679

)

(754

)

Payments of acquisition-related deferred and contingent consideration

(900

)

(322

)

Tax withholdings on and exercises of equity awards

(11,372

)

(20,102

)

Repurchase of common stock

(300,067

)

(12,347

)

Net cash provided by (used in) financing activities

(113,018

)

741,475

Net change in cash and cash equivalents

(83,411

)

(38,253

)

Cash and cash equivalents at beginning of period

181,753

153,624

Cash and cash equivalents at end of period

$

98,342

$

115,371

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(unaudited)

  (in thousands, except par value amounts)

March 31,
2026

December 31,
2025

ASSETS

Current assets:

Cash and cash equivalents

$

98,342

$

181,753

Accounts receivable, less allowances of $43,461 and $42,511, respectively

1,163,011

1,061,011

Other receivables

385,779

330,013

Inventories, net

1,189,402

1,094,684

Contract assets

150,611

133,011

Other current assets

128,958

126,811

Total current assets

3,116,103

2,927,283

Property, plant and equipment, net

2,155,071

2,204,184

Operating lease right-of-use assets, net

616,612

622,188

Goodwill

4,139,898

4,137,377

Intangible assets, net

1,112,852

1,183,793

Deferred income taxes

23,662

23,000

Other assets, net

138,896

139,705

Total assets

$

11,303,094

$

11,237,530

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

924,611

$

714,710

Accrued liabilities

531,002

566,325

Contract liabilities

180,543

168,440

Current portion of operating lease liabilities

111,423

111,132

Current maturities of long-term debt

24,285

14,334

Total current liabilities

1,771,864

1,574,941

Noncurrent portion of operating lease liabilities

542,933

547,772

Long-term debt, net of current maturities, discounts and issuance costs

4,613,278

4,427,033

Deferred income taxes

229,691

177,975

Other long-term liabilities

141,108

157,558

Total liabilities

7,298,874

6,885,279

Commitments and contingencies (Note 11)

Stockholders’ equity:

Preferred stock, $0.01 par value, 10,000 shares authorized; zero shares issued and outstanding

—

—

Common stock, $0.01 par value, 300,000 shares authorized; 107,518 and 110,585 shares issued and outstanding, respectively

1,075

1,106

Additional paid-in capital

4,003,145

4,197,279

Retained earnings

—

153,866

Total stockholders’ equity

4,004,220

4,352,251

Total liabilities and stockholders’ equity

$

11,303,094

$

11,237,530

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

Reconciliation of GAAP Net Income to Adjusted Net Income

(unaudited)

  Three Months Ended

Twelve Months Ended

March 31,

March 31,

(in millions, except per share amounts)

2026

2025

2026

Reconciliation to Adjusted Net Income:

GAAP net income (loss)

$

(47.4

)

$

96.3

$

291.5

Acquisition and related expense

1.4

3.4

5.4

Technology implementation expense

27.5

24.1

139.1

Debt issuance and refinancing cost

—

—

0.2

Amortization expense

72.9

73.3

296.8

Tax-effect of adjustments to net income (loss)

(24.4

)

(24.2

)

(106.0

)

Adjusted net income

$

30.0

$

172.9

$

627.0

Adjusted net income as a % of sales

0.9

%

4.7

%

4.2

%

GAAP common shares outstanding

109.9

113.7

GAAP diluted common shares outstanding

109.9

114.3

Basic adjusted net income per share:

$

0.27

$

1.52

Diluted adjusted net income per share:

$

0.27

$

1.51

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

Reconciliation of GAAP Net Income to Adjusted EBITDA

(unaudited)

  Three Months Ended

Twelve Months Ended

March 31,

March 31,

(in millions)

2026

2025

2026

Reconciliation to Adjusted EBITDA:

GAAP net income (loss)

$

(47.4

)

$

96.3

$

291.5

Interest expense, net

74.4

64.9

283.3

Income tax expense

13.9

47.4

149.3

Depreciation expense

75.5

71.7

298.0

Amortization expense

72.9

73.3

296.8

Stock compensation expense

13.6

14.2

52.9

Acquisition and related expense

1.4

3.4

5.4

Technology implementation expense

27.5

24.1

139.1

Debt issuance and refinancing cost

—

—

0.2

Tax-effect of adjustments to net income (loss)

(24.4

)

(24.2

)

(106.0

)

Other management-identified adjustments (1)

6.4

(1.9

)

17.9

Adjusted EBITDA

$

213.8

$

369.2

$

1,428.4

Adjusted EBITDA margin

6.5

%

10.1

%

9.6

%

(1) Primarily relates to severance, net gain/loss on sale of assets, and other one-time costs.

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

Reconciliation of GAAP Selling, General & Administrative Expenses to Adjusted Selling, General & Administrative Expenses

(unaudited)

  Three Months Ended

March 31,

(in millions)

2026

2025

Reconciliation to Adjusted SG&A Expense:

GAAP SG&A expense

$

912.5

$

930.8

Depreciation expense

(53.7

)

(49.4

)

Amortization expense

(70.2

)

(70.6

)

Stock compensation expense

(13.6

)

(14.2

)

Acquisition and related expense

(1.4

)

(3.4

)

Technology implementation expense

(27.5

)

(24.1

)

Other management-identified adjustments (1)

(6.4

)

1.9

Adjusted SG&A expense

$

739.7

$

771.0

GAAP SG&A expense as a % of sales

27.8

%

25.4

%

Adjusted SG&A expense as a % of sales

22.5

%

21.1

%

(1) Primarily relates to severance, net gain/loss on sale of assets, and other one-time costs.

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

Interest Reconciliation

(unaudited)

  Three Months Ended

March 31, 2026

(in millions)

Interest
Expense

Net Debt
Outstanding

Revolving credit facility @ 4.70% weighted average interest rate

$

1.8

$

200.0

2032 Unsecured notes @ 4.25%

13.8

1,300.0

2034 Unsecured notes @ 6.375%

15.9

1,000.0

2035 Unsecured notes @ 6.75%

12.7

750.0

2032 Unsecured notes @ 6.375%

11.2

700.0

2030 Unsecured notes @ 5.00%

6.9

550.0

Amortization of debt issuance costs, discount and premium

2.0

—

Finance leases and other finance obligations

10.7

179.9

Cash

—

(98.3

)

Total (1)

$

75.0

$

4,581.6

(1) Total interest expense does not include interest income of approximately $0.6 million received during the three month period.

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

Free Cash Flow

(unaudited)

  Three Months Ended

(in millions)

March 31, 2026

Free Cash Flow

Operating activities

$

87.5

Less: Capital expenditures, net of proceeds

(44.8

)

Free cash flow

$

42.7

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

Sales by Product Category

(unaudited)

  Three Months Ended March 31,

2026

2025

(in millions)

Net Sales

% of
Net Sales

Net Sales

% of
Net Sales

% Change

Manufactured products

$

734.5

22.3

%

$

850.8

23.3

%

(13.7

)%

Windows, doors & millwork

853.8

26.0

%

934.4

25.5

%

(8.6

)%

Value-added products

1,588.3

48.3

%

1,785.2

48.8

%

(11.0

)%

Specialty building products & services

853.4

26.0

%

903.8

24.7

%

(5.6

)%

Lumber & lumber sheet goods

845.4

25.7

%

968.5

26.5

%

(12.7

)%

Total net sales

$

3,287.1

100.0

%

$

3,657.5

100.0

%

(10.1

)%

More News From Builders FirstSource, Inc.

Builders FirstSource (BLDR - Free Report) came out with quarterly earnings of $0.27 per share, missing the Zacks Consensus Estimate of $0.39 per share. This compares to earnings of $1.51 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of -30.93%. A quarter ago, it was expected that this construction supply company would post earnings of $1.3 per share when it actually produced earnings of $1.12, delivering a surprise of -13.85%.

Over the last four quarters, the company has surpassed consensus EPS estimates two times.

Builders FirstSource, which belongs to the Zacks Building Products - Retail industry, posted revenues of $3.29 billion for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 4.48%. This compares to year-ago revenues of $3.66 billion. The company has topped consensus revenue estimates two times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Builders FirstSource shares have lost about 19% since the beginning of the year versus the S&P 500's gain of 4.2%.

What's Next for Builders FirstSource?While Builders FirstSource has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Builders FirstSource was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.84 on $4.03 billion in revenues for the coming quarter and $5.58 on $14.93 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Building Products - Retail is currently in the bottom 1% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Tecnoglass (TGLS - Free Report) , another stock in the same industry, has yet to report results for the quarter ended March 2026. The results are expected to be released on May 7.

This architectural glass maker is expected to post quarterly earnings of $0.72 per share in its upcoming report, which represents a year-over-year change of -21.7%. The consensus EPS estimate for the quarter has been revised 41.4% lower over the last 30 days to the current level.

Tecnoglass' revenues are expected to be $243 million, up 9.3% from the year-ago quarter.

Key Takeaways BLDR Q1 adjusted EPS fell 82% to $0.27, missing estimates despite net sales topping consensus.Lower starts and commodity deflation cut core organic sales by 8.3%, with Single-Family down 11.1%.BLDR trims 2026 guidance. It repurchases $303M stock and adds a $500M buyback authorization. Builders FirstSource, Inc. (BLDR - Free Report) first-quarter 2026 adjusted earnings missed the Zacks Consensus Estimate, while net sales beat the same. However, both metrics declined on a year-over-year basis.

The top-line pullback was due to lower activity across end markets and commodity price pressure. Management attributed the year-over-year decline primarily to a lower starts environment, which reduced core organic net sales and added a commodity deflation headwind.

However, BLDR’s efforts in supply-chain optimization and operational excellence aided its bottom-line growth. Going forward, the company expects to continue investing in enhancing its capabilities and expanding its geographic footprint to manage near-term uncertainties and offer long-term value to the shareholders.

BLDR’s Q1 Earnings & Revenue DiscussionThe company reported adjusted earnings per share of 27 cents, which declined 82.1% year over year and missed the Zacks Consensus Estimate of 39 cents by 30.8%.

Net sales were $3.29 billion, down 10.1% from the year-ago quarter. Sales, however, came ahead of the $3.15 billion consensus mark by 4.5%. The quarter reflected a softer start environment and commodity deflation, partly offset by acquisition-related growth.

BLDR’s End-Market Trends Remained SoftCore organic net sales declined 8.3% year over year in the first quarter, reflecting broad-based pressure across end markets. Single-Family was the biggest drag, with core organic net sales down 11.1% on lower start activity and lower value per start.

Multi-Family and Repair and Remodel (R&R)/Other were more resilient but still negative, declining 1.4% and 1.3%, respectively. On a weighted basis, Single-Family lowered total net sales by 7.9%, while R&R/Other and Multi-Family reduced net sales by 0.3% and 0.1%, respectively, underscoring how BLDR’s sales exposure remains concentrated in Single-Family demand.

Builders FirstSource’s Product Categories Skewed LowerResults were broadly weaker across the company’s major product groupings.

Value-Added Products: In the first quarter, net sales of value-added products (comprising 48.3% of quarterly net sales) were $1.59 billion, down 11% from the prior-year quarter.

Within this product category, sales from Manufactured products totaled $734.5 million and Windows, doors & millwork were $853.8 million, down 13.7% and 8.6% year over year, respectively.

Specialty Building Products & Services: Net sales from this product category (comprising 26% of quarterly net sales) declined 5.6% from the year-ago quarter to $853.4 million.

Lumber & Lumber Sheet Goods: For the quarter, this product category’s net sales (comprising 25.7% of quarterly net sales) decreased 12.7% year over year to $845.4 million.

BLDR’s Cost Structure Dented ProfitabilityMargins compressed as volumes softened and operating leverage deteriorated. Gross profit declined 16.7% year over year to $929 million, with gross margin contracting 220 basis points to 28.3% on the lower starts environment.

Selling, general and administrative expenses (SG&A) decreased 2% to $912.5 million, but SG&A as a percentage of net sales increased 240 basis points to 27.8% due to reduced operating leverage.

The margin pressure flowed through to earnings power. Adjusted EBITDA decreased 42.1% to $213.8 million, and adjusted EBITDA margin declined 360 basis points to 6.5%, reflecting lower gross margin and reduced operating leverage.

Builders FirstSource’s Cash Flow Stayed PositiveDespite the earnings shortfall, the company remained cash-generative in the quarter. Cash provided by operating activities was $87.5 million, down $44.9 million year over year. Free cash flow was $42.7 million compared with $45 million in the prior-year period, with the decrease primarily tied to lower net income.

Capital deployment remained active. Builders FirstSource repurchased 3.3 million shares for $302.9 million at an average price of $92.25 per share. The board also authorized an additional $500 million repurchase program on April 29, 2026, which includes roughly $200 million remaining under the prior authorization.

Builders FirstSource’s 2026 View Turned More CautiousBLDR updated its 2026 full-year outlook, framing expectations around the current price and demand environment. The company now expects net sales of $14.6-$15.6 billion, compared with the prior $14.8-$15.8 billion range, while keeping its assumption of ~1% net sales growth from acquisitions completed within the last 12 months and no change in selling days versus 2025.

Profitability expectations moved down. BLDR now sees gross profit margin of 27.5%-29%, versus the prior 28.5%-30% range, and adjusted EBITDA of $1.1-$1.5 billion, down from the earlier $1.3-$1.7 billion view. Accordingly, adjusted EBITDA margin is now projected at 7.5%-9.6%, compared with the prior 8.8%-10.8% range.

Cash generation expectations also reflect updated commodity assumptions. BLDR now expects free cash flow of approximately $0.4-$0.5 billion versus the prior expectation of about $0.5 billion, and it raised its assumed average commodity price range to $390-$410 per thousand board foot from $365-$385. On the cost and investment side, the company lowered its capital expenditure view to $225-$275 million from $250-$300 million, while interest expense is now expected to be $275-$285 million versus $270-$280 million previously. The effective tax rate (20%-22%) and depreciation and amortization ($525-$575 million) ranges were maintained.

BLDR’s Zacks Rank & Key PicksBuilders FirstSource currently carries a Zacks Rank #4 (Sell).

Here are some better-ranked stocks from the Zacks Retail-Wholesale sector:

FIGS, Inc. (FIGS - Free Report) sports a Zacks Rank of 1 (Strong Buy) at present. The company delivered a trailing four-quarter earnings surprise of 187.5%, on average. FIGS stock has surged 101.5% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for FIGS’ 2026 sales and EPS indicates growth of 11.9% and 26.3%, respectively, from the prior-year levels.

Five Below, Inc. (FIVE - Free Report) presently sports a Zacks Rank #1. The company delivered a trailing four-quarter earnings surprise of 63.4%, on average. FIVE stock has rallied 45% in the past six months.

The Zacks Consensus Estimate for Five Below’s 2026 sales and EPS indicates growth of 11.3% and 19.2%, respectively, from the year-ago period’s levels.

Dutch Bros Inc. (BROS - Free Report) carries a Zacks Rank of 2 (Buy) at present. The company delivered a trailing four-quarter earnings surprise of 41.6%, on average. BROS stock has declined 0.3% in the past six months.

The Zacks Consensus Estimate for Dutch Bros’ 2026 sales and EPS indicates growth of 24.6% and 19.7%, respectively, from the prior-year levels.

On May 01, 2026, Builders FirstSource Inc (BLDR) shares fell 4.3% to $75.72. The stock has experienced significant volatility, trading within a 52-week range of

Key Takeaways Builders FirstSource missed on earnings in Q1 2026. It was the second miss in a row.The company cut full year guidance and analysts slashed 2026-2027 earnings estimates.Shares of Builders FirstSource have fallen to multi-year lows in 2026. Builders FirstSource, Inc. (BLDR - Free Report) is not seeing a turnaround in home building this year. This Zacks Rank #5 (Strong Sell) is expected to see another year of declining earnings in 2026.

Builders FirstSource provides building materials for professional builders in new residential construction, repair and remodeling. It has approximately 570 locations across 43 states.

It distributes a wide range of building products, including lumber, sheet goods, windows, doors, millwork, and specialty items.

Builders FirstSource Misses on Earnings in the First Quarter 2026On Apr 30, 2026, Builders FirstSource reported first quarter 2026 results and missed on the Zacks Consensus by $0.12. Earnings were $0.27 compared to the Zacks Consensus of $0.39.

It was the second earnings miss in a row.

Net sales fell 10.1% to $3.3 billion, primarily due to a lower starts environment. The builders aren’t building at the same rate as prior years.  

Gross profit margin decreased 220 basis points to 28.3%, also driven by a lower starts environment.

Builders FirstSource Lowers 2026 GuidanceThe company has gotten more bearish since February, when it first gave its 2026 guidance.

It now expects net sales in the range of $14.6 billion to $14.8 billion, down from the previous guidance range of $14.8 billion to $15.8 billion.

Gross profit margins also fell to a range of 27.5% to 29% from 28.5% to 30%.

Analysts Slash 2026 and 2027 Earnings EstimatesIt’s not surprising, given the headwinds the company faces, that the analysts are also bearish.

Five estimates were cut for 2026 in the last week, which pushed the Zacks Consensus down to $4.49 from $5.58. That’s an earnings decline of 34.8%.

It would be the fourth year in a row of earnings declines. The Federal Reserve began raising interest rates, which slowed the housing market, in 2022.

Four estimates were also cut for 2027 which pushed the Zacks Consensus down to $5.94 from $7.20.

Here’s what it looks like on the price and consensus chart.

Image Source: Zacks Investment Research

Shares Plunge in 2026The shares are now trading at multi-year lows but they have plunged further in 2026.

Image Source: Zacks Investment Research

It has a low forward price-to-earnings (P/E) ratio of just 16.4. However, a P/E under 15 usually indicates the company is a value.

Builders FirstSource is shareholder friendly. While it’s not paying a dividend, the company has a share repurchase program. In the first quarter, Builders FirstSource repurchased 3.3 million shares for $302.9 million.

On Apr 29, 2026, the Board of Directors authorized the repurchase of an additional $500 million of shares, which includes the approximately $200 million remaining under the April 2025 authorization.

Since the inception of the share buyback program in Aug 2021, it has repurchased 49.7% of its total shares outstanding for a total cost of $8.3 billion.

The new home market is not going to rebound this year.

Investors might want to wait for green shoots in the 2027 earnings estimates before jumping in.

On May 12, 2026, Builders FirstSource Inc (BLDR) shares fell 3.3% to a current price of $74.88. This price is situated within a 52-week range of $73.40 to $151.

-

Chief Operating Officer Steve Herron to Retire

Mike Hiller Appointed Chief Operating Officer-Designate

Coley O’Brien Appointed Chief Human Resources Officer

IRVING, Texas--(BUSINESS WIRE)--Builders FirstSource, Inc. (NYSE: BLDR) announced today that as part of a planned leadership transition, Mike Hiller has been appointed Chief Operating Officer-Designate, succeeding Steve Herron, who will retire on December 31, 2026.

“This succession plan reflects both the bench depth of quality leadership within our company and our ability to attract top talent from outside our industry,” said Peter Jackson, CEO of Builders FirstSource. “The timeline will support a smooth transition for our team members, enabling them to stay focused on providing our customers with best-in-class service.”

Mr. Herron joined the Company as part of the 2015 acquisition of ProBuild Holdings. He has more than 40 years of experience in the industry, including senior management roles at HD Supply Holdings, The Home Depot, Lowe’s and Williams Brothers Lumber. Prior to his 2023 appointment as COO, he was President of the Company’s East Division.

“Humility and humor are the hallmarks of Steve’s style,” Jackson said. “We are grateful to him for his leadership and wish him a wonderful retirement.”

Mr. Hiller has more than 25 years of experience in business development, finance and operational leadership in the building materials industry. Prior to the 2021 merger of Builders FirstSource and BMC Stock Holdings, he was vice president of BMC’s Intermountain Region. He later became president of the Company’s Central Division, and most recently served as Chief Talent Officer.

“Mike is a thoughtful leader who puts people first while maintaining high standards of operational excellence,” Jackson said. “He is the right choice to lead our operations during this transformative time for the industry.”

Coley O’Brien has been appointed Chief Human Resources Officer, succeeding Mr. Hiller in leading the Company’s human resources functions. Mr. O’Brien has more than 25 years of experience in human resources and operations training. He joins the Company from The Wendy’s Company, where he held leadership roles in human resources and operations training since 2007. Most recently, he served as Chief People Officer, leading global HR strategy, innovation and people systems.

"Coley has a proven track record of building and executing talent strategies that support strong corporate culture and business outcomes," Jackson said. "His operational mindset, deep understanding of people systems and extensive experience leading and developing a distributed workforce will be extremely beneficial for our team.”

About Builders FirstSource

Builders FirstSource (NYSE: BLDR), headquartered in Irving, Texas, is the nation's leading provider of building materials for professional builders in new residential construction and repair and remodeling. We deliver integrated homebuilding solutions by manufacturing, supplying, and installing a full range of structural and related building products. With approximately 570 locations across 43 states, we serve 48 of the top 50 and 94 of the top 100 Core Based Statistical Areas (CBSAs), ensuring broad geographic coverage and enhancing our ability to partner with our customers. Our leading network of strategically located manufacturing facilities produces factory-built roof and floor trusses, wall panels, vinyl windows, custom millwork and trim, manufactured and semi-custom modular homes, as well as engineered wood that we design and cut specifically for each home. We also assemble interior and exterior doors into pre-hung units for easy installation. Additionally, we distribute a wide range of building products, including lumber, sheet goods, windows, doors, millwork, and specialty items. Our services, which vary by market, include professional installation, turnkey framing, and shell construction. Supported by the latest construction innovations and digital solutions, we help drive greater efficiency across homebuilding. Learn more at www.bldr.com.

More News From Builders FirstSource, Inc.

Back to Newsroom

On May 27, 2026, Builders FirstSource Inc (BLDR) shares rose 4.1% to a current price of $77.47. This movement comes amid a challenging year for the stock, which

Builders FirstSource (BLDR - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Over the past month, shares of this construction supply company have returned -2.4%, compared to the Zacks S&P 500 composite's +0.2% change. During this period, the Zacks Building Products - Retail industry, which Builders FirstSource falls in, has lost 3.4%. The key question now is: What could be the stock's future direction?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

Builders FirstSource is expected to post earnings of $1.32 per share for the current quarter, representing a year-over-year change of -44.5%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

For the current fiscal year, the consensus earnings estimate of $4.26 points to a change of -38.2% from the prior year. Over the last 30 days, this estimate has remained unchanged.

For the next fiscal year, the consensus earnings estimate of $5.69 indicates a change of +33.5% from what Builders FirstSource is expected to report a year ago. Over the past month, the estimate has remained unchanged.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Builders FirstSource is rated Zacks Rank #5 (Strong Sell).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

In the case of Builders FirstSource, the consensus sales estimate of $3.93 billion for the current quarter points to a year-over-year change of -7.2%. The $14.87 billion and $15.66 billion estimates for the current and next fiscal years indicate changes of -2.1% and +5.3%, respectively.

Last Reported Results and Surprise HistoryBuilders FirstSource reported revenues of $3.29 billion in the last reported quarter, representing a year-over-year change of -10.1%. EPS of $0.27 for the same period compares with $1.51 a year ago.

Compared to the Zacks Consensus Estimate of $3.15 billion, the reported revenues represent a surprise of +4.47%. The EPS surprise was -30.77%.

Over the last four quarters, Builders FirstSource surpassed consensus EPS estimates two times. The company topped consensus revenue estimates two times over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.

The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Builders FirstSource is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Builders FirstSource. However, its Zacks Rank #5 does suggest that it may underperform the broader market in the near term.