BlueLinx Posts Blowout Quarter; Stock Rises 9%

Shares of BlueLinx Holdings were up about 9% in early trade on Thursday after the wholesale distributor of building and industrial products delivered fourth-quarter results that not only topped the Street’s estimates, but also exceeded the year-ago period’s results.

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BluLinx (BXC) reported 4Q earnings of $2.04 per share, which outshined analysts’ expectations of $0.66 per share. It also compared favorably with the year-ago period’s loss of $1.09 per share. Bottom-line growth was driven by higher revenues, improved gross margins, and growth in adjusted EBITDA.

Revenues rose 41% year-over-year to $865 million, beating the Street’s estimates of $788.6 million. Gross margins improved 190 basis points to 15.4% in 4Q. Adjusted EBITDA increased 254.5% year-over-year to $39 million.

The company’s CEO Mitch Lewis said, “We again recorded significant increases in net sales along with strong margins as current market conditions remain favorable, supported by strong demand for new residential construction and increased home renovation activity.” (See BlueLinx stock analysis on TipRanks).

On Feb. 20, Benchmark Co. analyst Reuben Garner initiated coverage on BlueLinx stock with a Buy rating and a price target of $61 (37% upside potential). Garner remains upbeat on the company’s exposure to the “robust” new single-family housing market.

Overall, the Street has a cautiously optimistic outlook on the stock with a Moderate Buy consensus rating based on 2 unanimous Buys. The average analyst price target of $56 implies upside potential of about 26% to current levels. Shares have rallied over 267% over the past year.

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on BXC, with 6% of investors adding their exposure to BXC stock in the last 30 days.