Beazer Homes (BZH) AI Stock Analysis

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Beazer Homes

(NYSE:BZH)

64Neutral

Beazer Homes' overall score of 64 reflects a stable financial performance with significant improvements in leverage and profitability. However, liquidity concerns due to declining cash flows and bearish technical indicators weigh on the stock. The company's attractive valuation and strategic initiatives, including share repurchases, provide upside potential. Long-term growth prospects remain optimistic, despite current market challenges.

Beazer Homes (BZH) vs. S&P 500 (SPY)

Market Cap

$599.72M

Dividend YieldN/A

Average Volume (3M)390.80K

Price to Earnings (P/E)4.9

Beta (1Y)1.48

Revenue Growth12.27%

EPS Growth-22.28%

CountryUS

Employees1,158

SectorConsumer Cyclical

Sector Strength56

IndustryResidential Construction

Share Statistics

EPS (TTM)3.93

Shares Outstanding31,203,089

10 Day Avg. Volume387,768

30 Day Avg. Volume390,797

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.28

Price to Cash Flow (P/CF)-1.10

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$45.00

Price Target Upside138.22% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering0

Beazer Homes Business Overview & Revenue Model

Company DescriptionBeazer Homes USA, Inc. operates as a homebuilder in the United States. It designs, constructs, and sells single-family and multi-family homes under the Beazer Homes, Gatherings, and Choice Plans names. The company sells its homes through commissioned new home sales counselors and independent brokers in Arizona, California, Nevada, Texas, Delaware, Maryland, Indiana, Tennessee, Virginia, Florida, Georgia, North Carolina, and South Carolina. Beazer Homes USA, Inc. was founded in 1985 and is headquartered in Atlanta, Georgia.

How the Company Makes MoneyBeazer Homes generates revenue primarily through the sale of residential properties. The company acquires land, develops home communities, and constructs homes that are sold to individual buyers. Key revenue streams include the sale of homes in various segments, such as entry-level, move-up, and active adult markets. Beazer Homes also derives income from financing services offered to homebuyers, often through partnerships with financial institutions. Additionally, the company may engage in joint ventures or partnerships for land development and community projects, contributing to its earnings. Factors such as market demand, housing prices, construction costs, and economic conditions significantly influence the company's revenue generation.

Beazer Homes Financial Statement Overview

Summary

Beazer Homes exhibits a mixed financial performance. The income statement shows stable profitability with solid margins, but cash flow challenges indicate potential liquidity issues. The balance sheet reflects significant improvement in leverage, enhancing financial stability despite past risks.

Income Statement

Positive

The company demonstrates a solid performance with a TTM gross profit margin of 17.1% and a net profit margin of 5.0%. Revenue growth is positive, albeit moderate, with a recent increase of 4.0% from the previous annual report. Margins are stable but have slightly declined from historical highs.

Balance Sheet

Positive

The company has improved its financial position by eliminating total debt in the TTM period, resulting in a favorable debt-to-equity ratio of 0. This improvement supports a strong equity ratio of 47.5%. However, historical leverage was significant, indicating past financial risk.

Cash Flow

Neutral

The company faces challenges in cash flow, with a negative operating cash flow in the TTM period. Free cash flow has also seen a decline, impacting its financial flexibility. The operating cash flow to net income ratio is negative, highlighting potential liquidity concerns.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
2.41B	2.33B	2.21B	2.32B	2.14B	2.13B
	Gross Profit
413.38M	424.29M	442.69M	537.51M	404.25M	347.64M
	EBIT
124.90M	143.03M	177.25M	272.49M	146.87M	79.11M
	EBITDA
141.59M	157.89M	190.09M	285.85M	160.84M	94.75M
	Net Income Common Stockholders
121.58M	140.18M	158.61M	220.70M	122.02M	52.23M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
524.47M	203.91M	345.59M	214.59M	246.72M	327.69M
	Total Assets
2.02B	2.59B	2.41B	2.25B	2.08B	2.01B
	Total Debt
1.30B	1.05B	997.00M	994.65M	1.07B	1.15B
	Net Debt
770.69M	841.22M	651.41M	780.05M	821.47M	818.44M
	Total Liabilities
1.67B	1.36B	1.31B	1.31B	1.35B	1.41B
	Stockholders Equity
353.15M	1.23B	1.10B	939.29M	724.88M	593.17M
Cash Flow		Free Cash Flow
-93.24M	-159.90M	157.72M	66.03M	17.01M	278.45M
	Operating Cash Flow
-71.21M	-137.54M	178.06M	81.07M	31.66M	289.10M
	Investing Cash Flow
-22.91M	-30.01M	-29.67M	-14.71M	-14.19M	-10.16M
	Financing Cash Flow
75.26M	23.88M	-13.93M	-88.68M	-85.85M	-59.20M

Beazer Homes Technical Analysis

Technical Analysis Sentiment

Negative

Last Price18.89

Price Trends

50DMA

21.30

Negative

100DMA

24.73

Negative

200DMA

28.22

Negative

Market Momentum

MACD

-0.80

Negative

RSI

46.21

Neutral

STOCH

59.31

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BZH, the sentiment is Negative. The current price of 18.89 is below the 20-day moving average (MA) of 19.27, below the 50-day MA of 21.30, and below the 200-day MA of 28.22, indicating a bearish trend. The MACD of -0.80 indicates Negative momentum. The RSI at 46.21 is Neutral, neither overbought nor oversold. The STOCH value of 59.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BZH.

Beazer Homes Risk Analysis

Beazer Homes disclosed 26 risk factors in its most recent earnings report. Beazer Homes reported the most risks in the “Production” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Beazer Homes Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HOV	76 Outperform	$591.02M	2.98	33.63%	―	8.88%	19.66%
TPH	76 Outperform	$2.84B	6.40	13.28%	―	10.82%	19.34%
MHO	74 Outperform	$2.87B	5.67	19.02%	―	8.75%	8.39%
CCS	68 Neutral	$1.89B	5.92	12.36%	1.74%	11.08%	8.31%
BZH	64 Neutral	$599.72M	4.89	10.32%	―	12.27%	-22.28%
Sector *	60 Neutral	$6.78B	11.63	3.24%	4.20%	2.36%	-21.91%
LGIH	48 Neutral	$1.42B	7.20	10.07%	―	-6.61%	-1.56%

* Consumer Cyclical Sector Average

Performance Comparison

BZH

Beazer Homes

19.22

-8.27

-30.08%

HOV

Hovnanian Enterprises

98.72

-47.75

-32.60%

MHO

M/I Homes

107.22

-13.07

-10.87%

TPH

Tri Pointe

30.86

-5.96

-16.19%

LGIH

LGI Homes

60.23

-34.65

-36.52%

CCS

Century Communities

56.29

-21.06

-27.23%

Beazer Homes Earnings Call Summary

Earnings Call Date: Jan 30, 2025 | % Change Since: -31.81% | Next Earnings Date: May 1, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a mix of positive and negative aspects. While there is significant growth in community count and active lot positions, improved liquidity, and momentum in Zero Energy Ready homes, the company faced challenges with missed sales and closings guidance, deferred closings, increased incentives, and lowered gross margin expectations. Despite these challenges, the company remains optimistic about its long-term outlook and growth prospects.

Highlights

Community Expansion

Ending community count was up nearly 20% versus the prior year, allowing for increased sales and closings compared to last year.

Active Lot Position Growth

Active lot position grew by about 10%, providing visibility into further community count growth.

Improved Liquidity

59% of the lot position is controlled through options, up from 53% last year. They also upsized their revolver by more than 20%.

Zero Energy Ready Homes Momentum

Zero Energy Ready homes represented more than 85% of sales during the quarter, up from 43% in the previous year's first quarter.

Cost Reductions

Reduced build costs by about $3,000 per home since October 1, benefiting both to-be-built and spec homes.

Positive Long-Term Outlook

Despite current challenges, the company remains optimistic about the longer-term outlook for new home sales and growth prospects.

Solid Financial Position

Total liquidity exceeding $335 million, with no maturities until October 2027.

Lowlights

Missed Sales and Closings Guidance

Missed both sales and closings guidance for the quarter, with sales softening in November and becoming materially weaker in December.

Deferred Closings

Pushed out 47 closings from the quarter due to utility issues, labor availability in Houston, and meter availability in California.

Challenging Markets

Most challenging markets in Texas and Florida due to higher inventory levels leading to sluggish sales and more aggressive incentives.

Increased Incentives

Had to spend more on incentives for sales made, particularly in Texas and Florida.

Lowered Gross Margin Expectations

Expect full-year gross margins to be around 19.5%, the lower end of the previously provided range of 19.5% to 20.5%.

Company Guidance

In the recent Beazer Homes Earnings Conference Call, detailed guidance for fiscal year 2025 was provided, emphasizing key metrics and strategic initiatives. The company plans to activate over 60 new communities before year-end, aiming to increase its community count by nearly 20% compared to the previous year. Additionally, Beazer Homes reported a 10% growth in their active lot position and improved liquidity by upping their revolver by over 20%. Looking at sales, the company targets a 10% increase in the second quarter with an average sales price (ASP) of around $515,000, despite acknowledging challenges in the Texas and Florida markets. The second quarter gross margin is expected to slightly exceed the first quarter, supported by delayed closings and cost reduction efforts. Beazer Homes also reaffirmed its commitment to achieving a net debt to net capitalization ratio below 30% by the fiscal year 2026 and maintaining a community count of more than 200 by the end of that period.

Beazer Homes Corporate Events

Shareholder MeetingsStock BuybackBusiness Operations and Strategy

Beazer Homes Accelerates Share Repurchase Program

Positive

Feb 6, 2025

On February 6, 2025, Beazer Homes held its annual stockholder meeting where key decisions included the election of directors and the ratification of Deloitte & Touche LLP as the independent accounting firm for the fiscal year ending September 30, 2025. The company also announced an acceleration in its share repurchase program, taking advantage of a share price dislocation, aiming to buy back shares at a significant discount to book value. This strategic move is expected to moderately affect debt reduction goals but aligns with Beazer’s long-term financial strategy. The company reaffirmed its commitment to reducing its net debt to net capitalization ratio and achieving its multi-year goals.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.