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1. Company Snapshot

1.a. Company Description

Tri Pointe Homes, Inc.engages in the design, construction, and sale of single-family attached and detached homes in the United States.The company operates through a portfolio of six brands comprising Maracay in Arizona; Pardee Homes in California and Nevada; Quadrant Homes in Washington; Trendmaker Homes in Texas; TRI Pointe Homes in California, Colorado, and the Carolinas; and Winchester Homes in Maryland, Virginia, and the District of Columbia.


As of December 31, 2021, its operations consisted of 112 active selling communities and 41,675 owned or controlled lots.The company sells its homes through own sales representatives and independent real estate brokers.It also provides financial services, such as mortgage financing, title and escrow, and property and casualty insurance agency services.


The company was formerly known as TRI Pointe Group, Inc.and changed its name to Tri Pointe Homes, Inc.in January 2021.


Tri Pointe Homes, Inc.was founded in 2009 and is headquartered in Irvine, California.

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1.b. Last Insights on TPH

Tri Pointe Homes' recent performance was negatively impacted by margin pressures and declining orders. Despite beating Q2 earnings and revenue estimates, the company's home closings and order backlog decreased significantly year-over-year, reflecting ongoing sector weakness. Rising cancellations and a shrinking backlog also contributed to the challenges. However, the company maintains strong liquidity with $1.4 billion available and a conservative debt-to-capital ratio. A $50 million increase to its stock repurchase program also supports shareholder value. Industry headwinds, including high rates, affordability, and inflation, continue to weigh on results.

1.c. Company Highlights

2. Tri Pointe Homes' Strong Q3 Earnings Exceed Expectations

Tri Pointe Homes reported a robust third quarter, with revenues reaching $817 million, driven by the delivery of 1,217 homes at an average sales price of $672,000. The company's adjusted homebuilding gross margin, excluding $8 million of inventory-related charges, stood at 21.6%. Adjusted net income came in at $62 million, or $0.71 per diluted share, significantly beating estimates of $0.51 per share. The strong earnings performance was a result of the company's focus on inventory management, disciplined cost control, and the sale of move-in ready homes.

Publication Date: Oct -27

📋 Highlights
  • Exceeded Delivery Guidance:: Closed 1,217 homes, 7% above prior guidance, generating $817M in revenue with an average sales price of $672,000.
  • Strong Adjusted Gross Margin:: 21.6% adjusted homebuilding gross margin (excluding $8M inventory charges), with $62M adjusted net income ($0.71 EPS).
  • Share Repurchase Program:: $51M spent repurchasing 1.5M shares in Q3, totaling $226M year-to-date (7M shares), reducing share count by 7% YoY and 47% since 2016.
  • Inventory Reduction:: Units down 30% YoY, with a focus on balancing spec-to-build ratios and closing 32,000 owned lots for 2026 community growth (10-15% increase).
  • 4Q Guidance:: 1,200–1,400 home deliveries ($690K–$700K ASP), 19.5–20.5% gross margin, and 10.5–11.5% SG&A expense ratio, citing incentives and mix shifts.

Operational Highlights

During the quarter, Tri Pointe Homes repurchased 1.5 million shares for $51 million, bringing the year-to-date total spend to $226 million. This activity has reduced the company's share count by 7% year-to-date and by 47% since the program was initiated in 2016. The management team remains focused on creating long-term shareholder value, prioritizing near-term execution while staying aligned with the company's long-term growth strategy.

Guidance and Outlook

Tri Pointe Homes expects to deliver between 1,200 and 1,400 homes at an average sales price of between $690,000 and $700,000 in the fourth quarter. The company anticipates homebuilding gross margin percentage to be in the range of 19.5% to 20.5%. The guidance suggests a sequential step down in gross margin due to incremental incentives, mix, and increased incentives for spec homes. As Glenn Keeler, CFO, mentioned, "We're excited about the future for housing and looking forward to sharing our growth plan and strategy for 2026 and beyond with you at our next quarter's call."

Valuation and Growth Prospects

With a P/E Ratio of 8.18 and an ROE of 11.09%, Tri Pointe Homes appears to be reasonably valued. Analysts estimate next year's revenue growth at -7.8%. The company's strong financial position, with $1.6 billion in liquidity and a homebuilding debt-to-capital ratio of 25.1%, positions it well to invest through the cycle while returning capital to shareholders. The Free Cash Flow Yield of 13.58% is also attractive, indicating a potential opportunity for investors.

3. NewsRoom

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Fisher Asset Management LLC Cuts Stock Position in Tri Pointe Homes Inc. $TPH

Dec -04

Source: defenseworld.net

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Creative Planning Boosts Position in Tri Pointe Homes Inc. $TPH

Nov -29

Source: defenseworld.net

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Aristides Capital LLC Acquires New Position in Tri Pointe Homes Inc. $TPH

Nov -27

Source: defenseworld.net

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Tri Pointe Homes Will See More Pain, But It's Still Worth It

Nov -14

Source: seekingalpha.com

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Tri Pointe Homes Breaks Ground on State-of-the-Art Amenities Center for Altis at Serenity

Nov -12

Source: prnewswire.com

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Hantz Financial Services Inc. Boosts Stock Holdings in Tri Pointe Homes Inc. $TPH

Nov -06

Source: defenseworld.net

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Tri Pointe Homes Names Steve Francis As Division President In Charlotte

Oct -27

Source: globenewswire.com

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Tri Pointe Homes Named to 2025 Fortune Best Workplaces for Women™ List for the Fourth Consecutive Year

Oct -24

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.67%)

6. Segments

Homebuilding - West

Expected Growth: 9.5%

Tri Pointe Homes, Inc.'s 9.5% growth in the West Homebuilding segment is driven by increasing demand for new homes, particularly in California and Nevada, fueled by job growth, low unemployment, and favorable demographics. Additionally, the company's strategic land acquisition and development, as well as its focus on affordable luxury homes, have contributed to its growth in the region.

Homebuilding - Central

Expected Growth: 9.8%

Tri Pointe Homes' Central segment growth of 9.8% is driven by increasing demand for new homes, particularly in the Midwest and Texas regions. Strong job markets, low unemployment, and favorable demographics contribute to this growth. Additionally, the company's strategic land acquisition and development efforts, as well as its focus on affordable luxury homes, have also contributed to its success.

Homebuilding - East

Expected Growth: 10.2%

Tri Pointe Homes, Inc.'s 10.2% growth in Homebuilding - East is driven by increasing demand for new homes, fueled by low interest rates, government incentives, and a strong job market. Additionally, the company's strategic expansion into new markets, focus on affordable luxury homes, and efficient construction processes have contributed to its growth.

Financial Services

Expected Growth: 11.0%

Tri Pointe Homes, Inc.'s 11.0% growth in Financial Services is driven by increasing mortgage originations, rising interest rates, and expanding partnerships with lenders. Additionally, the company's focus on digital transformation and process efficiencies has improved operating leverage, contributing to the segment's growth.

7. Detailed Products

Single-Family Homes

Tri Pointe Homes, Inc. builds and sells single-family homes in various communities across the United States. These homes cater to a wide range of buyers, from first-time homeowners to move-up buyers and empty nesters.

Townhomes

The company's townhome offerings provide a more affordable and low-maintenance alternative to single-family homes, ideal for first-time buyers, young professionals, and retirees.

Condominiums

Tri Pointe Homes' condominiums cater to buyers seeking a more urban lifestyle, with amenities like community pools, fitness centers, and proximity to city centers.

Active Adult Communities

The company's active adult communities are designed specifically for adults aged 55+, offering a range of amenities and services tailored to this demographic.

8. Tri Pointe Homes, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Tri Pointe Homes, Inc. is medium due to the presence of alternative housing options such as apartments and condominiums.

Bargaining Power Of Customers

The bargaining power of customers for Tri Pointe Homes, Inc. is low due to the company's strong brand reputation and limited negotiating power of individual customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Tri Pointe Homes, Inc. is medium due to the presence of multiple suppliers and the company's moderate bargaining power.

Threat Of New Entrants

The threat of new entrants for Tri Pointe Homes, Inc. is low due to the high barriers to entry in the homebuilding industry, including regulatory hurdles and significant capital requirements.

Intensity Of Rivalry

The intensity of rivalry for Tri Pointe Homes, Inc. is high due to the competitive nature of the homebuilding industry, with multiple established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 30.78%
Debt Cost 11.61%
Equity Weight 69.22%
Equity Cost 11.61%
WACC 11.61%
Leverage 44.46%

11. Quality Control: Tri Pointe Homes, Inc. passed 5 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

Stock-Card
Taylor Morrison

A-Score: 5.4/10

Value: 7.9

Growth: 5.7

Quality: 7.2

Yield: 0.0

Momentum: 5.0

Volatility: 6.7

1-Year Total Return ->

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Green Brick Partners

A-Score: 5.4/10

Value: 6.5

Growth: 8.4

Quality: 7.9

Yield: 0.0

Momentum: 4.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Tri Pointe Homes

A-Score: 5.2/10

Value: 8.4

Growth: 8.2

Quality: 6.4

Yield: 0.0

Momentum: 2.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Meritage Homes

A-Score: 5.2/10

Value: 8.4

Growth: 5.3

Quality: 6.5

Yield: 3.0

Momentum: 2.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Century Communities

A-Score: 4.9/10

Value: 7.8

Growth: 7.6

Quality: 4.6

Yield: 3.0

Momentum: 1.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Skyline Champion

A-Score: 4.1/10

Value: 4.7

Growth: 6.8

Quality: 6.9

Yield: 0.0

Momentum: 2.5

Volatility: 4.0

1-Year Total Return ->

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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

33.8$

Current Price

33.8$

Potential

-0.00%

Expected Cash-Flows