Why Beazer Homes Stock Just Crashed

Core Insights - Beazer Homes' stock dropped 11% after a disappointing fiscal Q1 2026 earnings report, with losses of $1.13 per share and sales of $363.5 million, significantly worse than analyst expectations of a $0.50 loss per share and $423.2 million in sales [1][3]. Financial Performance - The company experienced a 22% decline in revenue due to a 23% decrease in home sales during the quarter [3]. - Despite the drop in unit sales, earnings did not decline as sharply, indicating that Beazer did not significantly reduce prices to move inventory [3]. Management Commentary - CEO Allan Merrill attributed the poor results to "persistent demand challenges and elevated incentives in the market" [3]. - Management aims to improve margins while maintaining prices and cutting costs, with hopes of avoiding further litigation-related charges that previously cost $0.23 per share in additional losses [4]. Market Outlook - Merrill noted that national builders' slowing starts and lower mortgage rates could help balance supply and demand in 2026, potentially boosting profits [5]. - New orders fell 18% in Q1, but this decline was less severe than the drop in home closings, suggesting some stabilization [5]. Analyst Projections - Wall Street analysts forecast a profit of $1.43 per share for the full year, representing a 25% decrease, indicating expectations of worsening conditions before improvement [6]. - Given the current price-to-earnings ratio of 15 and ongoing business decline, it may be premature to invest in Beazer stock [6].