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1. Company Snapshot

1.a. Company Description

Beazer 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.

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1.b. Last Insights on BZH

Beazer Homes USA, Inc.'s recent performance was negatively impacted by weak Q1 results, with a $0.90 loss per share and a 22% revenue decline. The company's gross margins dropped to 14%, highlighting operational challenges. Management's aggressive community growth and buyback plans appear misaligned with deteriorating orders, rising cancellations, and high leverage. Analysts have a "Hold" rating with a price target of $31.33, citing demand challenges and elevated incentives. The company's Q1 loss was more than twice as bad as expected, adding to value trap fears.

1.c. Company Highlights

2. Beazer Homes' Q1 Earnings: A Sobering Start to Fiscal '26

Beazer Homes reported a revenue of $359.7 million for the first quarter, with 700 homes closed at an average selling price (ASP) of $514,000. However, the homebuilding gross margin was 14%, which was impacted by a litigation-related charge. Excluding this charge, the gross margin would have been 15.8%. The company's adjusted EBITDA was negative $11.2 million, and the actual EPS came out at -$0.9, relative to estimates of -$0.49. SG&A expenses were $65 million, in line with expectations.

Publication Date: Feb -24

📋 Highlights
  • Homebuilding Revenue & ASP:: Q1 revenue was $359.7M with 700 homes closed at an average selling price (ASP) of $514K.
  • Adjusted EBITDA Shortfall:: Q1 adjusted EBITDA was -$11.2M, but full-year EBITDA growth remains achievable despite the shortfall.
  • Solar Included Homes:: 20% of business expected to come from solar communities by year-end, with gross margin spreads 400-500 bps higher than build-to-order homes.
  • Gross Margin Progression:: Q1 margin was 14% (15.8% ex-charge), with 300 bps sequential improvement expected in H2 driven by cost savings and ASP mix.

Operational Performance

The company's operational performance was mixed, with a decline in sales pace and a higher incentive spend. According to Allan Merrill, "they've seen green shoots for the spring selling season and have good visibility on margin catalysts, ASP growth, and profitable land sales into the back half of the year." The company expects to sell approximately 1,100 homes in the second quarter, with an ASP around $520,000 to $525,000.

Margin Progression and Land Sales

The company's gross margin is expected to be relatively flat sequentially in the second quarter. However, David Goldberg expressed confidence in the margin improvement in the back half of the year, citing direct cost savings and a mix shift towards newer communities with higher ASPs. The company also anticipates generating about $30 million of revenue from land sales in the second quarter.

Valuation and Growth Prospects

Analysts estimate next year's revenue growth at 10.8%. The current valuation metrics suggest that the market is pricing in a significant growth premium, with a P/S Ratio of 0.34 and an EV/EBITDA of 52.77. The company's ROE is 0.81%, and the Net Debt / EBITDA is 30.37, indicating a relatively high leverage position. As Allan Merrill stated, "they have a path to achieving EBITDA growth this year, independent of market conditions."

Share Repurchase and Leverage

The company plans to execute the remaining $72 million of its share repurchase authorization, which would bring its total buyback to nearly 20% over an 18-month period. Beazer Homes expects to finish fiscal '26 with a net leverage at or below 40%. This move is expected to return value to shareholders and demonstrate the company's confidence in its growth prospects.

3. NewsRoom

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Analysts Set Beazer Homes USA, Inc. (NYSE:BZH) PT at $31.33

Mar -09

Source: defenseworld.net

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Bear Of The Day: Beazer Homes (BZH)

Feb -04

Source: zacks.com

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Why Beazer Homes Stock Just Crashed

Jan -30

Source: fool.com

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Beazer Homes: Q1 Miss Adds To Value Trap Fears

Jan -30

Source: seekingalpha.com

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Beazer Homes USA, Inc. (BZH) Q1 2026 Earnings Call Transcript

Jan -30

Source: seekingalpha.com

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Beazer (BZH) Reports Q1 Earnings: What Key Metrics Have to Say

Jan -30

Source: zacks.com

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Beazer Homes (BZH) Reports Q1 Loss, Lags Revenue Estimates

Jan -29

Source: zacks.com

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Beazer Homes Reports First Quarter Fiscal 2026 Results

Jan -29

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (13.00%)

6. Segments

Homebuilding

Expected Growth: 13%

Beazer Homes USA, Inc.'s 13% growth in homebuilding is driven by increasing demand for new homes, particularly in the affordable and entry-level segments. Strong job markets, low interest rates, and a shortage of existing homes for sale are also contributing factors. Additionally, Beazer's focus on cost savings initiatives and strategic land investments have improved operational efficiency and driven growth.

Land and Other

Expected Growth: 13%

Beazer Homes USA, Inc.'s 13% growth in Land and Other segment is driven by strategic land acquisitions, increasing lot inventory, and rising land values. Additionally, the company's focus on community development and expansion into new markets has contributed to the growth. Furthermore, the segment's profitability has been enhanced by effective cost management and optimization of land use.

7. Detailed Products

Single-Family Homes

Beazer Homes USA, Inc. builds and sells single-family homes in various communities across the United States.

Townhomes

The company also builds and sells townhomes, which are multi-level homes that offer a more affordable option for homebuyers.

Condominiums

Beazer Homes USA, Inc. develops and sells condominiums, which are multi-unit dwellings that offer shared common areas and amenities.

Active Adult Communities

The company builds and sells homes in active adult communities, which are designed for residents aged 55 and older.

Land Development

Beazer Homes USA, Inc. also engages in land development, acquiring and developing land for future homebuilding projects.

8. Beazer Homes USA, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Beazer Homes USA, Inc. is medium due to the presence of alternative housing options such as apartments and rentals.

Bargaining Power Of Customers

The bargaining power of customers for Beazer Homes USA, Inc. is low due to the lack of negotiating power of individual homebuyers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Beazer Homes USA, Inc. is medium due to the presence of multiple suppliers of building materials and labor.

Threat Of New Entrants

The threat of new entrants for Beazer Homes USA, Inc. is low due to the high barriers to entry in the homebuilding industry.

Intensity Of Rivalry

The intensity of rivalry for Beazer Homes USA, Inc. is high due to the presence of several established homebuilders in the market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 47.58%
Debt Cost 7.91%
Equity Weight 52.42%
Equity Cost 15.20%
WACC 11.73%
Leverage 90.78%

11. Quality Control: Beazer Homes USA, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Monarch Casino & Resort

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Value: 4.3

Growth: 7.1

Quality: 7.8

Yield: 3.0

Momentum: 7.5

Volatility: 7.7

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Legacy Housing

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Growth: 5.8

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Hovnanian

A-Score: 3.8/10

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Growth: 3.7

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Beazer Homes USA

A-Score: 3.8/10

Value: 8.9

Growth: 2.8

Quality: 4.9

Yield: 0.0

Momentum: 2.0

Volatility: 4.0

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Value: 7.2

Growth: 3.7

Quality: 5.2

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Momentum: 1.0

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United Homes

A-Score: 2.6/10

Value: 8.6

Growth: 2.8

Quality: 3.6

Yield: 0.0

Momentum: 0.0

Volatility: 0.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

21.74$

Current Price

21.74$

Potential

-0.00%

Expected Cash-Flows