Dallas, Texas 10/31/2013 (Financialstrend) – Builders FirstSource, Inc. (NASDAQ:BLDR) is a $735 million market capitalized home improvement products seller. On October 24, the company announced results for its 3Q operations. The stock managed to post a jubilant 11% increase in its market value post the results announcement. The reason for the spurt in stock value was because of a 38% increase in sales in comparison to 3Q12. Income from operations from 3Q came in at $12.6 million in comparison to $13.6 million net loss in 3Q12. Earnings per share were reported at $0.13 which was well above analyst estimates of $0.8 per share.
Commenting about the results, company CEO Floyd Sherman has been quoted to have said that, “Our trend of improving financial results continued as our top line growth and gross margin increase helped us achieve positive net income and positive cash flow in the current quarter. Our focus has been on increasing market share while expanding gross margins. To that end, our third quarter sales were $402.9 million, an increase of 38.1 percent when compared to the third quarter of 2012. This marks the eighth consecutive quarter of year-over-year sales growth above 30 percent, and shows our sales growth is still outpacing the increase in residential construction activity.”
Post the results announcement, rating agency Imperial Capital has reiterated the company’s rating as outperform and has upped the price target from earlier $8 to $8.5. The rating agency’s confidence in the stock makes sense since the home improvement player has managed to bring in efficiency into its operations. The gross margins have gone up and the associated operating costs have come down significantly. When trading began on October 30, the stock was trading around the $7.63 mark and was down 0.39% from its previous day close. At current valuations, the stock is trading 4% lower than its 52 week high pricing.