- Full-Year Net Income Resilience: Delivered $132.8M net income ($3.53 EPS) in 2025 despite market challenges, driven by distribution expansion and strategic acquisitions like Holden Humphrey.
- Q4 Sales and Earnings Decline: Fourth-quarter sales fell 7% to $1.5B, with net income dropping to $8.7M ($0.24 EPS) due to $6M ($0.16 EPS) legal accruals in the BMD segment.
- Shareholder Returns: Returned $180M via share repurchases and raised dividends by 5% in 2025, reflecting commitment to investor value.
- 2026 Strategic Priorities: New CEO Jeff Strom emphasized refining strategic focus on integrated operations, innovation, and talent retention to sustain earnings stability and market adaptability.
- EBITDA Guidance and Market Outlook: Q1 BMD EBITDA projected at $45–55M; expects EWP volumes to rise 10–20% sequentially amid seasonal demand and channel restocking.
Segment Performance
The BMD segment's gross margin dollars decreased by $21.3 million compared to the fourth quarter of 2024. The company's gross margin contraction was a significant factor in the decline in net income. As Jeff Strom mentioned, the company saw a bit better activity than expected in the back half of the year, particularly from BMD, and achieved good cost control during November and December.
Outlook and Guidance
For the first quarter, the company guided EBITDA to be between $45 million to $55 million for BMD and $25 million to $35 million for Wood Products. The company expects EWP volumes to increase by high single to low double digits sequentially, reflecting seasonal strengthening and channel restocking in advance of the spring building season. Analysts estimate next year's revenue growth at 4.7%, indicating a positive outlook for the company.
Valuation Metrics
To understand what's priced into Boise Cascade's stock, we can look at its valuation metrics. The company has a P/E Ratio of 22.16, P/B Ratio of 1.54, and P/S Ratio of 0.5. Additionally, the EV/EBITDA ratio is 9.36, indicating a reasonable valuation. The Dividend Yield is 1.0%, and the Free Cash Flow Yield is 2.88%. The ROE is 6.78%, while the ROIC is -29.75%, indicating room for improvement in capital allocation.
Strategic Priorities
As Jeff Strom takes over as CEO, he emphasized leveraging the integrated model, increasing earnings stability, and investing in innovation and technology. The company is also focused on becoming the employer of choice by attracting and retaining top talent. With a strong pipeline of M&A opportunities, Boise Cascade is poised to continue its growth trajectory, balancing M&A and share repurchases.