Core Insights - Beazer Homes reported revenue of $565.34 million for the quarter ended March 2025, reflecting a 4.4% increase year-over-year and a surprise of +4.20% over the Zacks Consensus Estimate of $542.55 million [1] - The company's EPS was $0.42, significantly lower than $1.26 in the same quarter last year, but exceeded the consensus estimate of $0.26 with a surprise of +61.54% [1] Financial Performance Metrics - Total home closings were 1,079, surpassing the two-analyst average estimate of 1,050 [4] - The average closing price from continuing operations was $515.30, slightly above the estimated $515.06 [4] - New orders, net of cancellations, totaled 1,098, lower than the average estimate of 1,414 [4] - Units in backlog were 1,526, compared to the average estimate of 1,872 [4] - The average active community count was 163, slightly below the average estimate of 165 [4] - Revenue from land sales and other was $9.31 million, significantly higher than the average estimate of $2 million, representing a year-over-year change of +220.5% [4] - Homebuilding revenue was $556.03 million, exceeding the average estimate of $540.53 million with a year-over-year change of +3.2% [4] - Gross profit from homebuilding was $84.13 million, above the average estimate of $81.64 million [4] - Gross profit from land sales and other was $1.87 million, compared to the estimated $0.80 million [4] Stock Performance - Beazer's shares have returned -6.3% over the past month, underperforming the Zacks S&P 500 composite's -0.7% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [3]

Core Viewpoint - Beazer Homes reported quarterly earnings of $0.42 per share, exceeding the Zacks Consensus Estimate of $0.26 per share, but down from $1.26 per share a year ago, indicating a significant earnings surprise of 61.54% [1] Financial Performance - The company achieved revenues of $565.34 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 4.20% and showing an increase from $541.54 million year-over-year [2] - Over the last four quarters, Beazer has exceeded consensus EPS estimates three times and has topped consensus revenue estimates three times as well [2] Stock Performance and Outlook - Beazer shares have declined approximately 28.8% since the beginning of the year, contrasting with the S&P 500's decline of 5.3% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] Estimate Revisions - The trend for estimate revisions ahead of the earnings release was unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] - Current consensus EPS estimate for the upcoming quarter is $1.05 on revenues of $666.8 million, and for the current fiscal year, it is $3.32 on revenues of $2.55 billion [7] Industry Context - The Building Products - Home Builders industry is currently ranked in the bottom 13% of over 250 Zacks industries, suggesting that the industry's outlook can significantly impact stock performance [8] - Another company in the same industry, Toll Brothers, is expected to report a quarterly earnings decline of 15.4% year-over-year, with revenues anticipated to drop 11.8% from the previous year [9]

Beazer Homes USA, Inc. Q2 2025 Earnings Presentation NORTHBROOK MURRELLS INLET, SC 1 Disclaimers This presentation contains forward-looking statements about Beazer Homes USA, Inc. ("Beazer Homes") that only speak as of this date. Beazer Homes disclaims any obligation to update these statements. These forward-looking statements represent our good-faith estimates, expectations or beliefs concerning future events, and it is possible that the results described in this presentation will not be achieved. Forward- ...

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $38.8 million and earnings per diluted share of $0.42 for the second quarter [5] - The company repurchased over $20 million of stock, totaling $42 million in repurchases over the past three years [5][6] - The company expects diluted earnings per share to be above $0.40 for the third quarter [18] Business Line Data and Key Metrics Changes - The community count increased to 162, up nearly 12% year-over-year, with expectations to end the year in the 170s [13] - The average selling price (ASP) for homes is projected to be around $525,000 for the third quarter, driven by product and community mix shifts [17] - Adjusted gross margin for the full year is expected to be around 18.5% [19] Market Data and Key Metrics Changes - The company anticipates a sales pace of 2.25 to 2.5 homes per month for the full year, below historical norms [19] - The company expects to close between 1,050 and 1,100 homes in the third quarter [17] Company Strategy and Development Direction - The company is shifting its capital allocation priorities to balance growth, deleveraging, and share repurchases due to a weaker demand environment and reduced share price [6][9] - The company aims for a double-digit compound annual growth rate in book value per share through fiscal 2027 [14] - The company plans to slow the rate of growth in community count while continuing to reduce leverage [9][12] Management Comments on Operating Environment and Future Outlook - Management noted ongoing challenges with affordability, weakening consumer sentiment, and increased economic uncertainty impacting the housing market [5][6] - The company remains optimistic about the fundamentals for new homes and believes that pulling back too sharply on growth would be shortsighted [10][12] Other Important Information - The company has received board authorization to repurchase up to $100 million of its stock, representing nearly 20% of its current market cap [9] - The company expects to end the year with approximately 30,000 lots, up about 5% from the prior year [20] Q&A Session Summary Question: How does the affordability challenge impact updated multiyear goals? - Management acknowledged the constrained affordability environment and indicated that the longer timeline for community count provides more choices and discretion over capital deployment [30][31] Question: What drives the new goal regarding book value per share? - Management stated that the new goal reflects earnings growth and anticipated benefits from share repurchases, with a historical growth rate of 17% over the last five years [34][35] Question: What is the expected cadence of share repurchases? - Management indicated that share repurchases will be balanced with land market opportunities and growth prospects, without providing a specific number [37][38] Question: What is the outlook for sales pace in April and the second half of the year? - Management expects a seasonal ramp in sales pace, with a larger community count contributing to improved year-over-year comparisons [44][45] Question: How will adjustments to growth plans affect overhead and interest expense leverage? - Management expressed confidence in achieving overhead leverage despite slower growth, as community count growth is still expected [66][67] Question: Will the company renegotiate land deals in light of market conditions? - Management indicated that there are opportunities to renegotiate terms on some land deals, given the current market dynamics [68][69] Question: Can the company maintain pricing power for energy-efficient homes? - Management believes they can maintain a premium for their zero energy ready homes, as margins have been better compared to non-energy ready homes [70][71]

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $38.8 million and earnings per diluted share of $0.42 for the second quarter [4] - The company repurchased over $20 million of stock, totaling $42 million in repurchases over the past three years [4][5] - The second quarter was characterized by a slower than anticipated selling environment due to affordability challenges and weakening consumer sentiment [4][5] Business Line Data and Key Metrics Changes - The company ended the second quarter with 162 communities, a nearly 12% increase year-over-year, and expects to finish the year with a community count in the 170s [14] - The average selling price (ASP) for homes is projected to be around $525,000 for the third quarter, driven by product and community mix shifts [19] - Adjusted gross margin for the full year is expected to be around 18.5%, reflecting better margins on recent spec sales and new communities [21] Market Data and Key Metrics Changes - The company anticipates a sales pace of 2.25 to 2.5 homes per month for the full year, which is below historical norms [21] - The company expects to close between 1,050 and 1,100 homes in the third quarter [19] - Total liquidity exceeded $375 million at the end of the quarter, with no debt maturities until October 2027 [22] Company Strategy and Development Direction - The company is shifting its capital allocation priorities to balance growth, deleveraging, and share repurchases due to the current macro environment and share price [8][25] - The company aims to achieve a double-digit compound annual growth rate in book value per share from the end of the last fiscal year through fiscal 2027 [15] - The company plans to temper the rate of land spending while accommodating meaningful share repurchases without sacrificing growth [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed that the current affordability challenges are expected to persist, and they are planning accordingly [31] - The company remains optimistic about the fundamentals for new homes and believes that pulling back too sharply on growth would be shortsighted [10] - Management highlighted that they are confident in their land positions and the value of their assets, which supports their share repurchase strategy [48] Other Important Information - The company has received board authorization to repurchase up to $100 million of its stock, representing nearly 20% of its current market cap [9] - The company is focused on improving overhead leverage by tightly controlling spending to reflect current market conditions [20] Q&A Session Summary Question: How does the affordability challenge impact updated multi-year goals? - Management acknowledged the ongoing affordability constraints and indicated that the longer timeline for community count provides more choices and discretion over capital deployment [31] Question: What drives the new goal regarding book value per share? - Management clarified that the new goal reflects earnings growth and anticipated benefits from share repurchases, with a consistent growth rate of over 17% in book value per share over the last five years [34][35] Question: What is the expected cadence of share repurchases? - Management indicated that the pace of repurchases will depend on market conditions, land opportunities, and share price, emphasizing their history of being good capital allocators [37][38] Question: What is the outlook for sales pace in the upcoming months? - Management noted that they expect a seasonal ramp in sales pace, with a larger community count contributing to improved year-over-year comparisons [42][44] Question: How does the company view labor market availability and input costs? - Management observed that labor availability is improving, which could serve as a tailwind for gross margins, while input costs remain uncertain due to external factors [75][76] Question: Will the company consider renegotiating land deals? - Management expressed that they are open to renegotiating terms on land deals and have the discretion to walk away from unfavorable agreements [67] Question: Can the company maintain premium pricing for energy-efficient homes? - Management is optimistic about maintaining premium pricing for their zero energy ready homes, citing better margins compared to non-energy efficient homes [68]

Financial Performance - In Q2 fiscal 2025, the company reported revenue of $565.3 million, an increase from $541.5 million in Q2 fiscal 2024, representing a growth of 4.4%[106] - Net income for Q1 2025 was $12,778, down 32.6% from $39,171 in Q1 2024[108] - Adjusted EBITDA for Q1 2025 was $38,813, a decrease of 33.9% compared to $58,776 in Q1 2024[108] - Homebuilding revenue for the three months ended March 31, 2025, increased by 3.2% to $556.0 million compared to $538.6 million in 2024, driven by a 3.4% increase in closings[121] - For the six months ended March 31, 2025, total homebuilding revenue increased by 10.5% to $1,016.5 million compared to $919.6 million in 2024[121] Margins and Profitability - The homebuilding gross margin for Q2 fiscal 2025 was 15.1%, down from 18.7% in Q2 fiscal 2024, reflecting increased price concessions and changes in product mix[105] - The total homebuilding gross profit for the three months ended March 31, 2025, was $84.1 million, with a gross margin of 15.1%[130] - Homebuilding gross profit decreased by $16.6 million to $84.1 million for the three months ended March 31, 2025, compared to $100.8 million in the prior year quarter, with a gross margin decrease of 360 basis points to 15.1%[133] - For the six months ended March 31, 2025, homebuilding gross profit decreased by $22.6 million to $154.1 million from $176.7 million in the prior year period, with a gross margin decrease of 400 basis points to 15.2%[137] Orders and Sales - Orders per community per month decreased to 2.3 in Q2 fiscal 2025, down from 3.1 in the prior year quarter, reflecting weaker consumer sentiment[105] - Net new orders for Q1 2025 decreased to 1,098, down 15.5% from 1,299 in Q1 2024, driven by a 27.1% decrease in sales pace[111] - For the six months ended March 31, 2025, net new orders decreased to 2,030, down 4.3% from 2,122 in the same period of 2024[112] - The backlog average selling price for homes sold in Q2 fiscal 2025 was $544.9 thousand, an increase of 3.7% from $525.5 thousand in the prior year quarter[105] Share Repurchase and Capital Management - The company repurchased $20.6 million worth of shares in Q2 fiscal 2025, totaling $41.7 million in share repurchases over the past three years[100] - The company plans to repurchase up to $100 million of outstanding common stock over multiple years, as approved by the Board of Directors[101] - As of March 31, 2025, the remaining availability of the share repurchase program was $8.3 million, following the repurchase of shares under a previously authorized program of $50.0 million[188] - In April 2025, the Company's Board of Directors approved a new share repurchase program authorizing the repurchase of up to $100.0 million of its outstanding common stock, replacing the prior program[174] Debt and Liquidity - Total debt as of March 31, 2025, increased to $1,082,231 from $1,023,311 as of March 31, 2024, maintaining a total debt to total capitalization ratio of 46.8%[110] - As of March 31, 2025, the liquidity position included $85.1 million in cash and cash equivalents and $292.6 million of remaining capacity under the Unsecured Facility[165] - Net cash used in operating activities was $155.9 million for the six months ended March 31, 2025, primarily driven by an increase in inventory of $191.0 million[159] Operational Efficiency - The average active community count increased by 15.9% year-over-year to 163 communities as of March 31, 2025[103] - The company aims to achieve a double-digit compound annual growth in book value per share from the end of fiscal 2024 through fiscal 2027[103] - The company noted that the decrease in backlog units was primarily due to fewer backlog units at the beginning of the fiscal quarter and year-over-year growth in closings outpacing growth in net new orders[119] Segment Performance - The West segment reported a 5.9% increase in homebuilding revenue for the three months ended March 31, 2025, totaling $365.1 million, with a 6.0% increase in closings[122] - The East segment experienced a 7.9% increase in homebuilding revenue for the same period, reaching $120.4 million, supported by a 7.0% increase in closings[123] - The Southeast segment saw a 14.2% decrease in homebuilding revenue for the three months ended March 31, 2025, totaling $70.5 million, due to a 12.3% decrease in closings[124] Market Conditions and Outlook - The company believes that excluding one-time gains from Adjusted EBITDA provides a better reflection of its core operations[108] - Future land and lot sales will depend on local market conditions and individual community performance[143] - The company's credit rating was reaffirmed as B+ by S&P in February 2025, with a negative outlook[172]

Financial Performance - Net income for the second quarter was $12.8 million, or $0.42 per diluted share, down 67.4% from $39.2 million, or $1.26 per diluted share, in the same quarter last year [2]. - Adjusted EBITDA decreased by 34.0% to $38.8 million, down $20.0 million compared to the prior year [3]. - Income from continuing operations, net of tax, fell to $15.9 million, a decrease of 73.9% from $60.9 million [20]. - Adjusted EBITDA decreased to $61.9 million, down 36.1% from $96.8 million [20]. - Net income for the three months ended March 31, 2025, was $12,778 thousand, compared to $39,171 thousand in the same period of 2024, a decrease of 67.4% [37]. - Adjusted EBITDA for the three months ended March 31, 2025, was $38,813 thousand, down from $58,776 thousand in Q1 2024, a decline of 34.0% [37]. Revenue and Orders - Homebuilding revenue increased by 3.2% to $556.0 million, driven by a 3.4% rise in home closings to 1,079 homes [6]. - Homebuilding revenue increased to $1,016.5 million, reflecting a 10.5% growth from $919.6 million [20]. - Total homebuilding revenue for the three months ended March 31, 2025, was $556,032 thousand, up from $538,636 thousand in the same period of 2024, representing an increase of 3.7% [33]. - New home orders decreased to 2,030, down 4.3% from 2,122 in the previous year [20]. - Total new orders, net of cancellations, decreased to 1,098 units in Q1 2025 from 1,299 units in Q1 2024, a decline of 15.5% [33]. Backlog and Cancellations - The backlog dollar value was $831.5 million, down 22.7% from $1,075.1 million a year ago, with an average selling price of homes in backlog at $544.9 thousand, up 3.7% [5]. - Backlog units decreased to 1,526, down 25.4% from 2,046 [22]. - Dollar value of backlog declined to $831.5 million, a decrease of 22.7% from $1,075.1 million [22]. - Cancellation rates increased to 16.7%, up 170 basis points from 15.0% [20]. - Net new orders fell by 15.5% to 1,098, with a cancellation rate of 16.9%, up from 12.2% in the prior year [4]. Costs and Expenses - Homebuilding gross margin was 15.1%, down 360 basis points year-over-year, while excluding impairments, it was 18.3%, down 340 basis points [7]. - Selling, general and administrative expenses as a percentage of total revenue increased to 12.0%, up 50 basis points from the previous year [8]. - Homebuilding gross profit for Q1 2025 was $84,132 thousand, down from $100,774 thousand in Q1 2024, a decline of 16.6% [35]. Assets and Capitalization - Total assets increased to $2,654,745 thousand as of March 31, 2025, compared to $2,591,527 thousand on September 30, 2024, reflecting a growth of 2.4% [32]. - Total debt as of March 31, 2025, was $1,082,231 thousand, an increase from $1,025,349 thousand as of September 30, 2024, reflecting a rise of 5.5% [32]. - The total stockholders' equity decreased slightly to $1,228,067 thousand as of March 31, 2025, from $1,232,111 thousand on September 30, 2024, a decrease of 0.3% [32]. - Total capitalization reached $2,310,298 thousand, an increase from $2,184,888 thousand year-over-year [39]. - Net debt increased to $997,149 thousand, up from $890,444 thousand in the previous year [39]. - Net debt to net capitalization ratio improved to 44.8% from 43.4% year-over-year [39]. - Cash and cash equivalents decreased to $85,082 thousand from $132,867 thousand [39]. - Total debt to total capitalization ratio remained stable at 46.8% [39]. - Net capitalization increased to $2,225,216 thousand from $2,052,021 thousand year-over-year [39]. Land and Development - The company controlled 28,290 lots, a 5.2% increase from 26,887 lots in the prior year [9]. - Land acquisition and development spending increased to $408.3 million, a rise of 3.0% from $396.5 million [20]. - The average selling price (ASP) in backlog increased to $544.9 thousand as of March 31, 2025, compared to $525.5 thousand in 2024, an increase of 3.9% [33].

Core Viewpoint - Beazer Homes (BZH) shares experienced a significant increase of 7.1% to $20.37, following a favorable policy outcome for the housing industry, particularly tariff exceptions for Canada and Mexico, which were deemed a major win for homebuilders [2][4]. Company Summary - Beazer Homes is expected to report quarterly earnings of $0.29 per share, reflecting a year-over-year decline of 77%. Revenue projections stand at $545.2 million, indicating a slight increase of 0.7% compared to the same quarter last year [2]. - The consensus EPS estimate for Beazer has remained unchanged over the last 30 days, suggesting that the stock's price movement may not sustain without trends in earnings estimate revisions [4]. Industry Summary - Homebuilding stocks, including Beazer Homes, surged due to positive policy developments, with the National Association of Home Builders highlighting the tariff exceptions as beneficial for the industry [2]. - PulteGroup (PHM), another company in the same industry, saw its stock rise by 3.6% to $101.24, although it has experienced a -9.7% return over the past month. PulteGroup's consensus EPS estimate remains unchanged at $2.48, representing a 13.6% decline from the previous year [4][5].

Group 1 - The biotech sector has seen significant interest in buy-write or covered call strategies, indicating potential trading opportunities in selected biotech stocks [1] - The home building industry is facing challenges due to tariffs on Canadian lumber and rising mortgage rates, which are currently averaging just under 7% [2] - A model portfolio featuring 12-20 high upside biotech stocks is being offered by an investing group, along with live discussions and weekly market commentary [2]

Core Viewpoint - Beazer Homes is experiencing significant challenges in the housing market in 2025, leading to a projected decline in earnings and a bearish outlook from analysts [1][7]. Financial Performance - Beazer Homes reported fiscal first quarter 2025 earnings of $0.10, missing the Zacks Consensus estimate by $0.21, which represents a 67.7% earnings miss [5]. - Revenue increased by 20.9% year-over-year to $460.4 million, driven by a 22.1% rise in home closings to 907 homes, despite a 1% decrease in average sales price to $507,600 [6]. - The adjusted gross margin fell to 18.2% from 22.9% the previous year, attributed to increased price concessions, closing cost incentives, and a higher share of lower-margin spec home closings [7]. Share Repurchase and Market Response - Beazer Homes announced an acceleration of its share repurchase program, with approximately $24.8 million remaining as of February 6, 2025, and has repurchased about $4.1 million of its shares at a weighted average price of $21.86 [2][3]. - The company's shares have declined by 27.6% over the last six months, reflecting market fears regarding the housing sector and tariff impacts [9]. Analyst Sentiment and Valuation - Analysts have become increasingly bearish on Beazer Homes, with the Zacks Consensus Estimate for the full year dropping from $4.44 to $3.49, a decline of 23% [8]. - Beazer Homes is currently considered undervalued, with a forward price-to-earnings (P/E) ratio of 6.2 and a PEG ratio of 0.3, indicating potential value and growth [11].