Why did Builders FirstSource stock jump today? (NYSE:BLDR)

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Builders FirstSource (NYSE:BLDR) Stocks gaped higher 7.9% on Monday, after the building products company raised its full-year adjusted EBITDA margin and free cash flow outlook after stronger-than-expected second-quarter results.

The company expects Adjusted EBITDA in 2022 Margin growth of 120 to 160 basis points compared to 90 to 110 basis points at the previous target.

Free cash flow for this year is expected to be $2.5 billion to $3.0 billion, up from $2.0 billion to $2.4 billion in the previous view.

Referring to the strong Q2 Adjusted EBITDA growth, CEO and President Dave Flitman attributed this performance to “solid housing demand in all of our markets, ongoing productivity initiatives and pricing discipline in an improving but still supply-constrained environment,” said he during his company’s Q2 earnings call.

So far this year, the company has spent about $230 million on mergers and acquisitions, and “we expect to spend at least $500 million for the full year,” Flitman added.

Meanwhile, looking for the quantitative rating of Alpha and the average view of Wall Street analysts, BLDR is rated as a Strong Buy.

See why SA Contributor thinks Builders FirstSource stock is undervalued. Why did Builders FirstSource stock jump today? (NYSE:BLDR)

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