Tri Pointe (TPH) AI Stock Analysis

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Tri Pointe

(NYSE:TPH)

72Outperform

Tri Pointe's strong financial health and attractive valuation are key strengths. However, bearish technical indicators and economic challenges highlighted in the earnings call present risks. The company's strategic focus on growth and strong balance sheet are positive, but macroeconomic uncertainties and softer sales trends warrant caution.

Tri Pointe (TPH) vs. S&P 500 (SPY)

Market Cap

$2.67B

Dividend YieldN/A

Average Volume (3M)1.16M

Price to Earnings (P/E)6.1

Beta (1Y)1.06

Revenue Growth20.93%

EPS Growth39.33%

CountryUS

Employees1,750

SectorConsumer Cyclical

Sector Strength62

IndustryResidential Construction

Share Statistics

EPS (TTM)4.83

Shares Outstanding91,731,155

10 Day Avg. Volume1,176,687

30 Day Avg. Volume1,156,145

Financial Highlights & Ratios

PEG Ratio0.15

Price to Book (P/B)N/A

Price to Sales (P/S)0.64

Price to Cash Flow (P/CF)2.00

P/FCF Ratio2.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$41.25

Price Target Upside41.07% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering5

Tri Pointe Business Overview & Revenue Model

Company DescriptionTri Pointe Homes, Inc. (TPH) is one of the largest public homebuilders in the United States, focusing on the design, construction, and sale of innovative single-family homes. The company operates through multiple regional brands and is primarily involved in residential development, catering to a wide range of consumer segments from entry-level to luxury homebuyers. Tri Pointe Homes emphasizes sustainable building practices and quality craftsmanship, while striving to create communities that enhance the living experience for its customers.

How the Company Makes MoneyTri Pointe Homes generates revenue primarily through the sale of residential properties. The company's revenue model is centered around acquiring land, developing it into residential communities, and selling completed homes to individual buyers. Key revenue streams include the sale of homes, as well as potential income from land sales or joint ventures. Tri Pointe's earnings are influenced by factors such as housing market conditions, interest rates, and consumer demand. The company may also benefit from partnerships with suppliers and subcontractors to optimize construction costs and efficiencies, enhancing its profitability.

Tri Pointe Financial Statement Overview

Summary

Tri Pointe exhibits strong financial performance, with a solid gross and net profit margin, significant revenue and net income growth, a healthy balance sheet with no debt, and robust cash flow management.

Income Statement

Very Positive

Tri Pointe demonstrates a strong financial performance with a solid gross profit margin and impressive net profit margin, bolstered by a significant increase in revenue and net income over the past year. EBIT and EBITDA margins are robust, indicating efficient operational performance.

Balance Sheet

Very Positive

The balance sheet is exceptionally healthy with no total debt, resulting in a favorable debt-to-equity ratio. The company maintains a high equity ratio, showcasing financial stability and strong shareholder equity.

Cash Flow

Positive

Cash flow statements reveal strong free cash flow growth and a high operating cash flow to net income ratio, indicating effective cash management. The substantial free cash flow to net income ratio further underscores the company's financial health.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
4.42B	3.72B	4.35B	3.98B	3.26B
	Gross Profit
982.29M	844.55M	1.16B	992.12M	728.10M
	EBIT
552.58M	442.17M	746.52M	605.04M	366.51M
	EBITDA
607.88M	454.86M	807.35M	678.49M	421.36M
	Net Income Common Stockholders
458.03M	343.70M	576.06M	469.27M	282.21M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
970.04M	868.95M	889.66M	681.53M	621.29M
	Total Assets
4.89B	4.91B	4.72B	4.34B	4.02B
	Total Debt
1.10B	1.46B	1.38B	1.34B	1.34B
	Net Debt
-970.04M	592.41M	488.39M	656.20M	721.71M
	Total Liabilities
1.56B	1.90B	1.88B	1.89B	1.79B
	Stockholders Equity
3.34B	3.01B	2.83B	2.45B	2.23B
Cash Flow		Free Cash Flow
672.76M	169.88M	400.65M	390.04M	565.19M
	Operating Cash Flow
696.06M	195.26M	444.28M	419.53M	587.99M
	Investing Cash Flow
-63.45M	-26.42M	-58.12M	-72.13M	-88.04M
	Financing Cash Flow
-531.52M	-189.55M	-178.02M	-287.17M	-207.66M

Tri Pointe Technical Analysis

Technical Analysis Sentiment

Negative

Last Price29.24

Price Trends

50DMA

32.52

Negative

100DMA

35.72

Negative

200DMA

39.19

Negative

Market Momentum

MACD

-0.30

Negative

RSI

48.14

Neutral

STOCH

49.57

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TPH, the sentiment is Negative. The current price of 29.24 is below the 20-day moving average (MA) of 31.33, below the 50-day MA of 32.52, and below the 200-day MA of 39.19, indicating a bearish trend. The MACD of -0.30 indicates Negative momentum. The RSI at 48.14 is Neutral, neither overbought nor oversold. The STOCH value of 49.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TPH.

Tri Pointe Risk Analysis

Tri Pointe disclosed 55 risk factors in its most recent earnings report. Tri Pointe reported the most risks in the “Finance & Corporate” category.

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

Latest Risks Added 0 New Risks

Tri Pointe Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GRBK	79 Outperform	$2.45B	6.61	26.08%	―	18.07%	36.74%
MHO	76 Outperform	$2.88B	5.40	20.66%	―	11.84%	21.14%
CCS	73 Outperform	$1.82B	5.71	13.33%	1.80%	18.17%	30.51%
TPH	72 Outperform	$2.67B	6.06	14.43%	―	20.93%	39.33%
KBH	68 Neutral	$3.69B	6.27	15.58%	1.95%	5.54%	11.12%
DFH	68 Neutral	$2.01B	6.74	27.19%	―	18.74%	13.43%
Sector *	59 Neutral	$11.38B	10.18	-0.84%	4.04%	1.25%	-16.04%

* Consumer Cyclical Sector Average

Performance Comparison

TPH

Tri Pointe

29.24

-6.37

-17.89%

KBH

KB Home

50.90

-11.38

-18.27%

MHO

M/I Homes

106.52

-9.03

-7.81%

CCS

Century Communities

59.20

-22.11

-27.19%

GRBK

Green Brick Partners

55.78

0.95

1.73%

DFH

Dream Finders Homes

21.63

-14.71

-40.48%

Tri Pointe Earnings Call Summary

Earnings Call Date: Feb 18, 2025 | % Change Since: -19.27% | Next Earnings Date: Apr 24, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a strong financial performance in 2024 with record deliveries and revenue growth. However, there are challenges ahead due to softer sales, a lower backlog, and macroeconomic uncertainties. The company is strategically positioned for long-term growth with significant land investments and a strong balance sheet.

Highlights

Record High Deliveries and Revenue Growth

Tri Pointe delivered a record high 6,460 new homes in 2024 and generated $1.2 billion in home sales revenue in Q4.

Improved Margins and Net Income

Homebuilding gross margin improved by 40 basis points year-over-year to 23.3%. The company reported a net income of $458 million for the year, up 40% year-over-year.

Successful Geographic Diversification

Significant gains in Texas with a 60% increase in deliveries and an 11% increase in the Carolinas in 2024.

Strong Balance Sheet and Liquidity

Ended the year with the strongest balance sheet and liquidity in the company's history, including record operating cash flows and $1.7 billion of liquidity.

Share Repurchase Program

Repurchased approximately 691,000 shares for $25 million in early 2025, with a total reduction of 43% in shares outstanding since 2016.

Strategic Land Investments

Own or control over 36,000 lots, a 14% increase compared to the previous year, supporting long-term growth opportunities.

Lowlights

Softer Sales and Lower Backlog

Experienced softer seasonal sales trends in Q3 and Q4 leading to a lower backlog to start 2025.

Impact of Elevated Mortgage Rates and Economic Uncertainty

Elevated mortgage rates, sticky inflation, and uncertainties around the election causing some consumers to stay on the sidelines.

Increased Incentives

Increased incentives to 7% in Q4 to move completed inventory, reflecting a challenging market environment.

Potential Political and Economic Headwinds

Additional political uncertainties could cause consumer hesitancy and operating headwinds in 2025.

Company Guidance

During the Tri Pointe Homes Fourth Quarter 2024 Earnings Conference Call, the company reported delivering 1,748 new homes, generating $1.2 billion in home sales revenue, with a homebuilding gross margin of 23.3%, a 40 basis point improvement year-over-year. SG&A expenses were 10.3% of home sales revenue, contributing to a pre-tax margin of 14% and resulting in a net income of $129 million or $1.37 per diluted share for the quarter. For the full year, Tri Pointe delivered a record 6,460 new homes and achieved a net income of $458 million, or $4.83 per diluted share, marking a 40% increase from the previous year. The company also redeemed $450 million of senior notes and improved its return on average equity to 14.5%, a 270 basis point increase. Tri Pointe's active share repurchase program, which has reduced shares outstanding by 43% since 2016, continued with $25 million spent repurchasing 691,000 shares in the first six weeks of 2025. Looking ahead, Tri Pointe anticipates delivering between 5,500 to 6,100 homes in 2025, with an average sales price between $660,000 and $670,000, and expects to maintain homebuilding gross margins between 20.5% and 22% for the year.

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.