BlueLinx Holdings (BXC) Company Overview & Stock Price Forecast
This article provides a brief analysis and stock rating for BlueLinx Holdings (BXC) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.
BlueLinx Holdings Fundamentals
Stock Price Target: $117.48
In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for BlueLinx Holdings in comparison to the Retail Distribution industry and the S&P 500.
BlueLinx Holdings is a Small Cap company with a Market Cap of $855.5M.
How are investors using BlueLinx earnings yield to assess the company?
The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).
The current earnings yield for BlueLinx is 17.95%, in comparison to 3.33% for the S&P 500 and 1.52% for the 10-year treasury bond. The median earnings yield for the Retail Distribution industry is 6.41%.
What does BlueLinx Price-to-Earnings Ratio (P/E) tell investors about the company?
The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings.
BlueLinx is currently trading at a P/E of 3.72. The P/E for the Retail Distribution industry is 13.78 and the P/E for the S&P 500 is 30.02.
What is the current Price-to-Sales Ratio (P/S) for BlueLinx?
The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.
BlueLinx is currently trading at a P/S of 0.28. The P/S for the Retail Distribution industry is 1.06 and the P/S for the S&P 500 is 3.26.
How does BlueLinx Price-to-BookRatio (P/B) compare to the Retail Distribution industry?
Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.
BlueLinx P/B ratio is 14.74. The P/B for the Retail Distribution industry is 3.39 and the P/B for the S&P 500 is 4.91.
How attractive is BlueLinx Return on Invested Capital (ROIC) to investors?
Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.
Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.
BlueLinx ROIC is currently 32.74% in comparison to 11.84% for the Retail Distribution industry and 8.60% for the S&P 500.
How has BXC stock performed over the past year? What is the current analyst price target?
Over the past 52 weeks, BlueLinx has traded between the range of $27.13 and $96.63.
The current Analyst Price Target for BlueLinx is $117.48.
What is BlueLinx YoY Performance in comparison to its industry and the total market?
The YoY performance for BlueLinx is 184.14%. The Retail Distribution industry has a YoY performance of 33.73% in comparison to the YTD S&P 500 performance of 25.15%.
Recent Financial Results (All comparisons versus the prior-year period)
- Net sales of $971M, an increase of 11%
- Net income of $47M, a decrease of 14%
- Adjusted EBITDA of $79M, a decrease of 2%
- Strong cash flow from operations of $104M, up 70%
- Net leverage ratio reduced for the sixth consecutive quarter to 1.3x
- Completed $300M 6.0% senior secured notes offering in October 2021
Stock Price Target: $117.48
BlueLinx Holdings distributes residential and commercial building products in the US. It distributes structural products, including plywood, oriented strand board, rebar and remesh, lumber, spruce, and other wood products primarily that are used for structural support and walls in construction projects; and specialty products comprising engineered wood, moulding, siding and trim, cedar, metal, and insulation products.
BlueLinx serves dealers, specialty distributors, national home centers, and manufactured housing customers through a network of distribution centers. The company is headquartered in Marietta, Georgia. The current CEO is Mitchell B. Lewis.
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This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.