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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. faces near-term headwinds due to declining home prices and new build activity. Despite exceeding revenue and EPS expectations, profitability fell amidst a challenging housing market. The company's high leverage concerns management, who prioritize deleveraging and community expansion. A downgrade from 'strong buy' to 'buy' reflects accelerating weakness in housing market and company fundamentals. Quarterly results showed declining revenue, profits, and cash flow, with rising cancellation rates and a shrinking backlog.

1.c. Company Highlights

2. Beazer Homes' Fiscal 2025: A Year of Growth and Balance Sheet Management

Beazer Homes reported a strong fiscal 2025, with the company closing 1,400 homes in the fourth quarter, exceeding expectations, and achieving a gross margin of 17.2%. The adjusted EBITDA was approximately $64 million, and diluted earnings per share were $1.07, surpassing estimates of $0.798. The company's average active community count grew 14% to 164, and its book value per share increased to nearly $43. The net debt to net capital ratio improved to below 40%, indicating effective balance sheet management.

Publication Date: Nov -23

📋 Highlights
  • Community Growth and Debt Management:: Average active community count rose 14% to 164, net debt to net cap fell below 40%.
  • Q4 Performance:: Closed 1,400 homes (17.2% gross margin), generated $64M adjusted EBITDA and $1.02 diluted EPS.
  • 2026 Outlook:: Targets 5-10% volume growth, with $10,000 per-home cost savings from rebid efficiencies and mix shifts.
  • Liquidity and Share Repurchases:: $540M liquidity ($215M unrestricted cash) and 1.5M shares repurchased in fiscal 2025, with similar plans for 2026.
  • Land Sales and DTAs:: $60M land sales in 2025 (with $100M+ expected in 2026) and $84M energy efficiency tax credits by June 2026.

Operational Highlights

The company's operational performance was marked by a significant increase in community count, which is expected to drive future growth. Beazer Homes finished the year with a strong liquidity position, having total liquidity of nearly $540 million and $215 million of unrestricted cash. The company repurchased about 1.5 million shares in fiscal 2025 and expects to repurchase at least that many shares in fiscal 2026.

Outlook for Fiscal 2026

For fiscal 2026, Beazer Homes expects to sell around 900 homes in the first quarter, with specs representing up to 75% of total sales. The company anticipates closing about 800 homes, with an average sales price of $515,000 and a gross margin of around 16%. Beazer aims to meet or exceed its fiscal 2025 adjusted EBITDA despite a challenging start to the year, driven by community count growth, a slightly improved sales pace, and cost savings.

Valuation and Growth Prospects

Analysts estimate next year's revenue growth at 12.3%. Beazer Homes' current valuation metrics indicate a P/E Ratio of 13.59 and a P/B Ratio of 0.5. The company's ROE is 3.7%, and its ROIC is 1.67%. With a strong liquidity position and a focus on cost savings, Beazer Homes is well-positioned to drive growth in fiscal 2026.

Deferred Tax Assets and Land Sales

The company is focused on energy efficiency tax credits, which are expected to grow to $84 million and will continue to grow through June 2026. Beazer Homes also expects to generate significant land sale proceeds, with over $100 million expected in 2026, and an aggregate gain above cost. The company's goal is to use its deferred tax assets relatively quickly, depending on profitability levels in 2026, 2027, and 2028.

3. NewsRoom

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New Strong Sell Stocks for Nov. 25

Nov -25

Source: zacks.com

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Beazer Homes USA's Plunge Offers Opportunity

Nov -18

Source: seekingalpha.com

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Beazer Homes USA (NYSE:BZH) Shares Gap Up Following Strong Earnings

Nov -15

Source: defenseworld.net

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Donald Smith & Co Reduces Stake in Beazer Homes USA Inc

Nov -15

Source: gurufocus.com

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Beazer Homes Surpasses Expectations with Strong FY26 Outlook

Nov -14

Source: gurufocus.com

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Beazer Homes USA, Inc. (BZH) Q4 2025 Earnings Call Transcript

Nov -14

Source: seekingalpha.com

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Pulling Back for a Fresh Look at This Recent Pullback

Nov -14

Source: zacks.com

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Beazer (BZH) Reports Q4 Earnings: What Key Metrics Have to Say

Nov -14

Source: zacks.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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A-Score: 3.7/10

Value: 7.8

Growth: 3.9

Quality: 3.8

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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

22.5$

Current Price

22.5$

Potential

-0.00%

Expected Cash-Flows