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Builders FirstSource (NYSE: BLDR) shares broke 7.9% Monday, after the building products company raised its full-year adjusted EBITDA margin and free cash flow outlook following stronger-than-expected second-quarter results.
the company voice Adjusted EBITDA 2022 margin growing from 120 to 160 basis points, compared to the 90 to 110 bp of the previous target.
This year’s free cash flow is expected to be $2.5 million to $3.0 million versus $2.0 million to $2.4 million in the previous view.
Referring to its strong adjusted EBITDA growth in the second quarter, CEO and President Dave Flitman attributed this performance to “strong housing demand in our markets, ongoing productivity initiatives and pricing discipline in an improving but still supply-constrained environment,” he said. during his company’s second quarter earnings call.
So far this year, the company has spent roughly $230 million on mergers and acquisitions, and “we expect to invest at least $500 million throughout the year,” Flitman added.
Meanwhile, looking at Alpha’s quantitative rating and Wall Street’s average analyst view, BLDR is shown as a strong buy.
See why SA contributor thinks Builders FirstSource stock is undervalued.