We recently published a list of 12 High Growth Non-Tech Stocks That Are Profitable in 2025.  In this article, we are going to take a look at where Builders FirstSource, Inc. (NYSE:BLDR) stands against other high-growth non-tech stocks that are profitable in 2025.

What to Expect From the Market in Q2 2025?

On March 27, David Sekera, CFA, chief US market strategist at MorningStar released his Q2 2025 market outlook. He highlights that the market was priced to perfection at the start of the year, trading at a rare premium to its fair value. He advised investors at the start of the year to overweight value stocks, which were attractively priced while underweighting growth stocks that were significantly overvalued. This advice proved prescient as the Morningstar US Market Index fell by 1.74% through March 24, with losses concentrated in growth and core stocks. This was particularly true for stocks linked to artificial intelligence, which dropped by 3.79% and 3.52%, respectively. In contrast, value stocks gained 4.59%, showcasing their resilience.

Sekera noted that as of March 24, the US equity market had declined to a price/fair value ratio of 0.95, representing a 5% discount to Morningstar’s fair value estimates. Moreover, growth stocks experienced a sharp correction, reducing their premium from 24% at the start of the year to just 3%. On the other hand, despite their recent gains, value stocks became even more undervalued, trading at a 13% discount to fair value. He emphasizes that this has made value stocks the most attractive investment category for the year. His outlook also addresses market dynamics by capitalization. He recommends overweighting small-cap stocks due to their significant undervaluation at an 18% discount to fair value. However, he cautions that small-cap performance might not materialize until later in the year when economic conditions improve and monetary policy becomes more accommodative. Conversely, large-cap and mid-cap stocks are less appealing as they are trading at similar discounts to the overall market.

Moreover, monetary policy plays a central role in Sekera’s analysis. Morningstar’s economics team forecasts three federal funds rate cuts in 2025 and anticipates a gradual economic rebound starting in early 2026. While long-term interest rates are expected to remain stable initially, they are projected to enter a multiyear downward trend later in 2025. He also addressed misconceptions about market sell-offs being driven by tariffs. Instead, he attributed much of the downturn to a concentrated sell-off in AI-related stocks. According to Morningstar’s analysis, losses from just ten highly AI-correlated stocks outweighed overall market declines, with seven of these being among the top-performing stocks in 2024.

Our Methodology

To curate the list of 12 high-growth non-tech stocks that are profitable in 2025, we used the Finviz stock screener, Seeking Alpha, and Yahoo Finance as our sources. Using the screener we aggregated a list of non-tech stocks that have grown their revenue and net income by more than 15% over the past 5 years. Next, we cross-checked the 5-year sales growth and net income from Seeking Alpha. We also checked for TTM net income from Yahoo Finance and only added companies that had a TTM net income of more than $500 million. Lastly, we ranked the stocks in ascending order of the number of hedge fund holders, sourced from Insider Monkey’s Q4 2024 database. Please note that the data was recorded on March 28, 2025. Also note that for some companies the TTM net income was mentioned in foreign currencies, in such cases it was manually converted to USD. The conversion rates are as of March 28, 2025.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Builders FirstSource, Inc. (NYSE:BLDR)

5-Year Sales Growth: 17.64%

5-Year Net Income Growth: 37.19%

TTM Net Income: $1.08 Billion

Number of Hedge Fund Holders: 59

Builders FirstSource, Inc. (NYSE:BLDR) is a leading supplier of building materials and services for professional builders in the residential construction and remodeling industry. It provides an integrated solution for homebuilding, offering products like lumber, trusses, windows, doors, siding, and insulation.

On February 23, Keith Hughes from Truist Financial maintained a Buy rating on the stock, with a price target of $180. Builders FirstSource, Inc. (NYSE:BLDR) achieved strong financial performance, including mid-teens adjusted EBITDA margins and nearly 33% gross margins in fiscal 2024. It also implemented productivity initiatives that improve efficiency and reduce costs. Notably, during the year the company invested over $75 million in expanding its facilities, including opening new truss manufacturing sites and upgrading existing ones. It also enhanced its millwork locations to meet growing demand. However, regardless the company faced an 8% year-over-year decline in revenue.

Diamond Hill Large Cap Strategy in its Q4 2024 investor letter noted that Builders FirstSource, Inc. (NYSE:BLDR) experienced revenue impacts due to ongoing weakness in its multi-family segment and weaker-than-expected single-family home construction. However, the gross margins of the company remained strong despite these macroeconomic challenges. It is one of the high-growth non-tech stocks that are profitable in 2025.

Diamond Hill Large Cap Strategy stated the following regarding Builders FirstSource, Inc. (NYSE:BLDR) in its Q4 2024 investor letter:

“Other bottom contributors in Q4 included Builders FirstSource, Inc. (NYSE:BLDR), Extra Space Storage and SBA Communications. Lumber and building materials distributor Builders FirstSource’s revenue continues to be impacted by on going weakness in its multi-family segment and weaker than-expected single-family home construction. Dollar value of materials supplied per home has also declined, but this trend has largely stabilized. Positively, gross margin continues to hold up strongly despite these macro challenges.”

Overall, BLDR ranks 4th  on our list of best aerospace and defense stocks to buy according to analysts. While we acknowledge the potential of BLDR as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BLDR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires

Disclosure: None. This article is originally published at Insider Monkey.