$50.98
$108.48
bear $50.98
base $88.76
bull $108.48
margin of safety $46.00
market price* $78.37
UFP Industries makes and distributes wood and wood-alternative products through three main segments. Retail supplies pressure-treated lumber and branded products, including Deckorators composite decking and railing built around the company's patented Surestone mineral-based composite technology. Packaging makes pallets, crates and other wood packaging for industrial customers. Construction supplies trusses, wall panels and other components to site-built and factory-built housing. The two largest customers, The Home Depot and Lowe's, accounted for about 17% and 11% of fiscal 2025 net sales. Results move with housing and remodeling activity and with the price of lumber, which flows through to revenue. What the business earns. We measure owner earnings: operating cash flow with working-capital swings removed, less stock-based pay and less the capital spending needed to keep the business as it is. When revenue falls, we count all capital spending as upkeep. Revenue has fallen every year since 2022, largely because lumber prices came down, so the heavy plant spending of 2023-2025 ($180 million, $232 million and $269 million) is charged in full. That is a deliberate, conservative choice: in its fiscal 2025 annual report the company described only $106 million of the $269 million as maintenance, with $163 million for expansion and efficiency. On our measure, owner earnings per share were $1.76 to $2.84 in 2016-2019, rose to $9.49 and $10.95 in the 2021-2022 lumber spike, and fell back to $7.53, $5.46 and $4.26 in 2023-2025. For valuation we use the cash the business produces before its lenders, with interest earned on its cash pile removed (that cash is counted separately below). On that basis the 2019-2025 years run from $2.93 to $11.20 per share, with a median of $4.90. We use 2019-2025 because it covers one full swing: the last normal pre-pandemic year, the 2021-2022 boom, and the decline since. Earlier years describe a smaller business. Recent results. Fiscal 2025 net sales fell 5% (prices down 2%, units down 3%); Retail units fell 7%, Packaging organic units 1%, and Construction units were flat. Operating profit fell 26%. Through the first half of fiscal 2026, net sales were $3,344 million against $3,431 million a year earlier and operating profit was $167 million against $215 million, so conditions are still weakening. Two things offset part of that: capital spending in the first half was $87 million against $130 million, and the company repurchased 4.5 million shares in 2025 for $443 million, bringing diluted shares down to about 54 million in the first half of 2026. Owner earnings fell 22% in fiscal 2025; our base case holds them about flat for the coming year, because the lower capital spending and the smaller share count already shown in the first-half 2026 filing roughly cover the further drop in profit. The base case. Business cash flow of $4.05 per share in year one, $4.40 in year two and $4.80 in year three, settling at $5.00 a year from year four. That level comes from two pieces of evidence: cash before capital spending at the middle of the recent range (about $8 per share, between 2024's level and the 2026 run rate), and capital spending returning to about $3 per share, slightly above what the business now depreciates each year. It does not count any growth. Management expects significant growth in Surestone decking and savings from plant consolidations; neither has yet shown up in results, so neither is included. Housing recovery is not included either. After year ten the business is assumed to keep earning $5.00 a year with no growth, because the plant network and long-standing retail and industrial relationships have produced positive owner earnings in every one of the last ten years. About $23 million a year of amortization from past acquisitions is added back; we treat those acquired customers as lasting, since Packaging, which added an acquired business in 2025, lost only 1% of organic units in a weak year. On these assumptions the business is worth about $81.74 per share. The bear case is built on the company's own experience in the last housing bust: sales fell from $2.5 billion in 2007 to $1.7 billion in 2009, and net earnings dropped from $21.0 million in 2007 to $4.3 million in 2008. We assume a similar collapse arrives next: business cash flow of $2.50 per share in year one, then $1.30, $1.00 and $1.30 as net margins fall to well under 1% and the company cuts capital spending, recovering to $2.00 and $2.60 and then settling at $3.00 from year seven onward, roughly the per-share level of 2019. That lower plateau also allows for losing part of a big-box program, a real risk with two customers at 28% of sales. In this case the business is worth about $43.96 per share. The bull case assumes the plants built in 2023-2025 run at good utilization and cash before capital spending returns to between its 2024 and 2023 levels, about $9.30 per share, with capital spending back near $3 per share: business cash flow of $4.30, $5.00 and $5.70 in years one to three, then $6.30 a year with no growth after. That is worth about $101.45 per share. Balance sheet. At June 27, 2026 the company held $597 million of cash and $46 million of short-term securities against $234 million of senior notes at fixed rates of 3.04% to 4.27% and a $22 million outside interest in subsidiaries, leaving about $387 million, or $7.02 per share, of net cash. We carry the low-rate notes at face value, a small conservative choice. In every case the business earns several times its roughly $11 million annual interest bill, even at the bear-case trough. Adding net cash, the shares are worth about $50.98 in the bear case, $88.76 in the base case and $108.48 in the bull case. Previous figures for this company were prepared on a different basis and are not comparable. The margin-of-safety price is $46. Confidence in the earnings level is moderate: the business has produced positive owner earnings every year for a decade, but the level has swung between about $2 and $11 a share with lumber and housing, and today it is falling. The worst plausible event is a long housing slump like 2007-2009 combined with lost shelf space at one of the two big retailers; the business would survive it, with net cash, low fixed-rate debt and hard assets in plants and equipment, but earnings could sit near zero for several years. The things most likely to be wrong are the capital-spending level and the mid-cycle earnings level. If true upkeep spending is closer to the company's $106 million figure, the base case rises to about $105.55; if cash before capital spending stays at today's lower run rate, it falls to about $80.03. The price assumes a three-to-four-year holding period, with a dividend of $0.36 a quarter while waiting. From $46 the base case implies roughly 27% a year over three years and 20% over four; the bear case, valued four years out, implies about 7.5% a year. What would make this wrong: a housing downturn deeper or longer than the 2007-2009 pattern; the loss of a major retail program; or continued price competition in Site-Built eroding the mid-cycle level. On the other side, if the 2023-2025 plant spending proves to be growth rather than upkeep, owner earnings are understated here.