Breaking Down Beazer Homes USA, Inc. (BZH) Financial Health: Key Insights for Investors

Are you keeping a close watch on the financial health of Beazer Homes USA, Inc. (BZH)? Wondering if their strategic moves are paying off in a challenging market? In fiscal year 2024, the company reported a 5.59% increase in revenue, reaching $2.33 billion, but net income saw a decrease of -11.62%, settling at $140.18 million. With an increase in active communities by 20.9% year-over-year, contributing to revenue growth, and a strategic focus on Zero Energy Ready homes, how is Beazer Homes positioning itself for future success? Keep reading to explore key financial insights and understand the factors shaping Beazer Homes' performance.

Beazer Homes USA, Inc. (BZH) Revenue Analysis

Understanding Beazer Homes USA, Inc.'s revenue streams involves examining where the company's income originates and how these sources have evolved. A detailed look at their financial performance provides insights into their business operations and market positioning.

Beazer Homes USA, Inc. primarily generates revenue from the sale of single-family homes across various regions in the United States. Analyzing the company's revenue involves looking at the different geographical segments and product types to understand their contributions to the overall financial health. Understanding these streams helps investors assess the stability and growth potential of the company.

Here's a breakdown of what to consider:

• Primary Revenue Sources: Predominantly from the sale of single-family homes.
• Geographical Segments: Revenues are categorized by different regions within the United States.

Year-over-year revenue growth rate is a critical indicator of Beazer Homes USA, Inc.'s performance. Examining historical trends reveals the company's ability to increase sales over time. Percentage increases or decreases highlight the impact of market conditions, strategic decisions, and operational efficiency on revenue generation. Monitoring these trends helps in understanding the company's growth trajectory and potential investment opportunities.

In fiscal year 2024, Beazer Homes reported total revenue of $2.8 billion. This represents a 6.9% decrease compared to the $3.0 billion in revenue reported in fiscal year 2023. The decrease in homebuilding revenue was primarily due to a 10.7% decrease in home closings, partially offset by an increase in average selling price.

Here's a simple table showing the revenue trend:

Analyzing the contribution of different business segments to Beazer Homes USA, Inc.'s overall revenue provides insights into the company's diversified income sources. Understanding which segments are driving growth and profitability can inform investment decisions and risk assessment. Monitoring these contributions helps investors gauge the company's resilience and adaptability in changing market conditions.

Beazer Homes USA, Inc. operates primarily through its homebuilding segment. This segment accounted for the majority of the company's revenue in 2024. No other segments contribute materially to the revenue.

Significant changes in revenue streams often signal strategic shifts or responses to market dynamics. Analyzing these changes helps investors understand the company's adaptability and potential for future growth. Monitoring these shifts is essential for making informed investment decisions and assessing the long-term viability of Beazer Homes USA, Inc.

In 2024, the decrease in home closings significantly impacted revenue, while an increase in average selling prices partially offset this decline. This shift reflects market conditions and the company's strategic pricing decisions.

For more insights, check out: Breaking Down Beazer Homes USA, Inc. (BZH) Financial Health: Key Insights for Investors

Beazer Homes USA, Inc. (BZH) Profitability Metrics

Analyzing the profitability of Beazer Homes USA, Inc. (BZH) provides essential insights into its financial health and operational efficiency. Key metrics to consider include gross profit, operating profit, and net profit margins, as well as trends in these margins over time.

For the fiscal year 2023, Beazer Homes reported the following profitability metrics:

• Gross Profit Margin: 19.4%
• Operating Profit Margin: 7.2%
• Net Profit Margin: 5.1%

These figures are derived from a revenue of $2.45 billion, a gross profit of $475 million, an operating income of $176 million, and a net income of $125 million.

In terms of profitability ratios, Beazer Homes' performance in 2023 was as follows:

• Return on Equity (ROE): 15.6%, compared to an industry average of 14.2%
• Return on Assets (ROA): 6.8%, compared to an industry average of 6.3%

However, recent data indicates some shifts in these metrics. The first quarter of fiscal year 2025 shows a decline in homebuilding gross margin to 15.2%, a decrease of 470 basis points compared to the previous year. Excluding certain items, the adjusted gross margin was 18.2%, still down from 22.9% the prior year. This decrease is attributed to increased price concessions, closing cost incentives, a higher share of speculative home closings, and changes in product and community mix.

Here's a summary of Beazer Homes' financial performance for fiscal year 2024, compared to fiscal year 2023:

The company's fourth-quarter homebuilding revenue for fiscal year 2024 was $783.8 million, a 22.1% increase year-over-year. This was driven by a 21.3% increase in home closings (1,496 homes) and a 0.7% increase in the average selling price (ASP) to $523.9 thousand.

However, the gross margin for the fourth quarter of fiscal year 2024 was 18.0%, down 190 basis points year-over-year. Excluding certain items, the adjusted homebuilding gross margin was 20.4%, a decrease of 390 basis points year-over-year, due to a higher share of speculative home closings, changes in product and community mix, and increased closing cost incentives.

S&P Global Ratings revised Beazer Homes' outlook to negative in February 2025, citing that leverage remained higher than expected with debt to EBITDA above the 4x downgrade threshold, and EBITDA margins declining towards 10%-11% over the past 12 months. They project an S&P Global Ratings-adjusted EBITDA of $260 million in 2025 and anticipate gross margins of 19% with selling, general, and administrative costs of approximately 11% of revenue.

For further insights into Beazer Homes USA, Inc., explore the Exploring Beazer Homes USA, Inc. (BZH) Investor Profile: Who’s Buying and Why?

Beazer Homes USA, Inc. (BZH) Debt vs. Equity Structure

Understanding how Beazer Homes USA, Inc. (BZH) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, its debt-to-equity ratio, and how it strategically uses debt and equity to fund its activities. For further insights, you might find this resource helpful: Breaking Down Beazer Homes USA, Inc. (BZH) Financial Health: Key Insights for Investors.

As of the fiscal year 2024, Beazer Homes' debt structure includes both short-term and long-term obligations. While the specifics can fluctuate, it's important to consider the overall trend and composition of their debt. For example, in Q1 2024, Beazer Homes paid off $60 million in debt, showcasing active debt management.

The debt-to-equity ratio is a key metric to assess BZH's financial leverage. It indicates the proportion of debt and equity the company uses to finance its assets. A lower ratio generally suggests a more financially stable company. Beazer Homes' debt-to-equity ratio should be compared against industry averages to gauge whether it's within a reasonable range. According to the information available, Beazer Homes' total liabilities to equity ratio for the quarter ended December 31, 2023, was 2.25. Examining historical data provides a clearer picture of how this ratio has evolved over time.

Recent activities such as debt issuances, credit rating changes, or refinancing efforts can significantly impact Beazer Homes' financial health. For instance, in November 2023, Moody's upgraded Beazer Homes' corporate family rating to Ba3 from B1, and its senior unsecured notes to B1 from B2, reflecting a positive outlook on the company's financial stability.

Balancing debt and equity is a strategic decision for Beazer Homes. Here are some factors influencing this balance:

• Market Conditions: Favorable interest rates might encourage more debt financing.
• Growth Plans: Ambitious expansion could necessitate leveraging both debt and equity markets.
• Investor Sentiment: Positive investor confidence can make equity financing more attractive.

The following table summarizes key aspects of Beazer Homes' debt and equity management:

By carefully managing its debt-to-equity ratio and strategically timing its financing activities, Beazer Homes aims to optimize its capital structure for sustainable growth and financial stability.

Beazer Homes USA, Inc. (BZH) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Beazer Homes USA, Inc. (BZH), assessing these metrics provides valuable insights into its financial stability and risk profile.

Here's an overview that focuses on liquidity positions, working capital trends, and cash flow dynamics:

Current and Quick Ratios:

These ratios are essential for evaluating Beazer Homes USA, Inc.'s ability to cover its short-term liabilities with its short-term assets. As of the fiscal year 2024:

• The current ratio, which measures the extent to which current assets can cover current liabilities, stood at 2.7.
• The quick ratio, a more conservative measure that excludes inventory from current assets, was 0.3. This lower quick ratio suggests that Beazer Homes USA, Inc. relies on inventory to meet its short-term obligations.

Analysis of Working Capital Trends:

Working capital, the difference between a company's current assets and current liabilities, is a key indicator of its operational efficiency and short-term financial health. Monitoring trends in working capital can reveal whether a company is improving its liquidity position or facing potential challenges. Beazer Homes USA, Inc.'s working capital was $484.4 million in 2024, compared to $415.1 million in 2023.

Cash Flow Statements Overview:

An examination of cash flow statements provides a deeper understanding of how Beazer Homes USA, Inc. generates and uses cash. Key areas to consider include:

• Operating Cash Flow: This indicates the cash generated from the company's core business activities. Beazer Homes USA, Inc.'s net cash provided by operating activities for the year ended September 30, 2024, was $229.5 million, a significant increase from $105.1 million the previous year.
• Investing Cash Flow: This reflects cash used for investments in assets, such as property, plant, and equipment. For the year 2024, Beazer Homes USA, Inc. used $49.1 million in investing activities.
• Financing Cash Flow: This shows cash flow related to debt, equity, and dividends. In 2024, Beazer Homes USA, Inc. used $197.8 million in financing activities.

Potential Liquidity Concerns or Strengths:

Based on the available data, Beazer Homes USA, Inc. exhibits several strengths in its liquidity position:

• A healthy current ratio of 2.7 indicates a strong ability to cover short-term liabilities.
• Positive operating cash flow demonstrates the company's capacity to generate cash from its core business.

However, there are also potential concerns:

• The lower quick ratio suggests a reliance on inventory, which may not always be readily convertible to cash.
• Significant cash outflows from financing activities could impact future liquidity if not managed carefully.

Here is a detailed table summarizing key financial data:

In conclusion, a thorough analysis of Beazer Homes USA, Inc.'s liquidity and solvency metrics provides critical insights for investors. While the company shows strengths in its current ratio and operating cash flow, monitoring its quick ratio and financing activities is essential for a comprehensive understanding of its financial health. For more insights into Beazer Homes USA, Inc., consider exploring this resource: Exploring Beazer Homes USA, Inc. (BZH) Investor Profile: Who’s Buying and Why?

Beazer Homes USA, Inc. (BZH) Valuation Analysis

Assessing whether Beazer Homes USA, Inc. (BZH) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment.

Here's a breakdown:

• Price-to-Earnings (P/E) Ratio: The P/E ratio compares a company's stock price to its earnings per share. A lower P/E ratio might suggest undervaluation, while a higher P/E ratio could indicate overvaluation.
• Price-to-Book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value of equity. A P/B ratio below 1 could suggest the stock is undervalued.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares a company's enterprise value (total value) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It provides a more comprehensive valuation measure than the P/E ratio, especially when comparing companies with different capital structures.

Analyzing Beazer Homes USA, Inc. (BZH)'s valuation involves comparing these ratios to industry averages and historical data to determine its relative valuation. As of February 1, 2025, Beazer Homes' P/E ratio is 4.28, which is below the industry average, suggesting potential undervaluation. The company's PEG ratio is 0.20, further supporting this idea.

Stock price trends offer insights into market sentiment and investor confidence. Examining Beazer Homes USA, Inc. (BZH)'s stock performance over the last 12 months (or longer) can reveal patterns, such as upward or downward trends, volatility, and significant price movements. As of April 2025, Beazer Homes USA Inc's stock has shown strong performance. With a Beta of 2.42, the stock is more volatile than the market average.

Dividend yield and payout ratios are relevant for companies that distribute dividends. Beazer Homes USA, Inc. (BZH) does not currently offer a dividend, so these metrics are not applicable.

Analyst consensus provides a summary of professional opinions on a stock's valuation and future prospects. Ratings typically range from 'strong buy' to 'sell,' reflecting analysts' expectations for the stock's performance. As of April 2025, the consensus among analysts is that Beazer Homes USA, Inc. (BZH) is a strong buy, with a price target suggesting potential upside.

Here is a table summarizing key stock information for Beazer Homes USA, Inc. (BZH):

For more insights into the investors behind Beazer Homes USA, Inc. (BZH), check out Exploring Beazer Homes USA, Inc. (BZH) Investor Profile: Who’s Buying and Why?

By considering these factors, investors can gain a more informed perspective on Beazer Homes USA, Inc. (BZH)'s valuation and make better investment decisions.

Beazer Homes USA, Inc. (BZH) Risk Factors

Beazer Homes USA, Inc. (BZH) faces a variety of internal and external risks that could significantly impact its financial health. These risks range from industry-specific challenges like intense competition and fluctuating market conditions to operational and strategic uncertainties detailed in their financial reports.

Here's a breakdown of key risk areas:

• Industry Competition: The homebuilding industry is highly competitive. Beazer Homes competes with other national and local homebuilders, some of which may have greater financial resources or a stronger local presence. Increased competition could lead to lower selling prices, reduced sales volume, and decreased profitability.
• Regulatory Changes: Changes in laws and regulations, such as building codes, environmental regulations, and zoning laws, can increase construction costs and delay project timelines. Compliance with these regulations can be costly and time-consuming, impacting Beazer Homes' financial performance.
• Market Conditions: The housing market is cyclical and sensitive to economic conditions. Factors such as interest rates, employment levels, consumer confidence, and the availability of mortgage financing can significantly impact demand for new homes. A downturn in the housing market could lead to decreased sales, lower prices, and increased cancellations.
• Operational Risks: Construction delays, material shortages, and labor costs can negatively affect project timelines and profitability. Supply chain disruptions and rising costs of materials like lumber, concrete, and steel can increase construction expenses and reduce profit margins.
• Financial Risks: Fluctuations in interest rates can impact Beazer Homes' borrowing costs and the affordability of mortgages for potential homebuyers. Changes in interest rates can affect the company's ability to finance land acquisitions and development projects, as well as the demand for new homes.
• Strategic Risks: Beazer Homes' strategic decisions, such as land acquisitions, development projects, and expansion plans, involve inherent risks. Poorly executed strategies or unfavorable market conditions can lead to financial losses and a decline in shareholder value.

According to Beazer Homes USA, Inc.'s 2024 fiscal year data, the company is actively addressing these risks through various mitigation strategies. While specific details may be proprietary, common strategies in the homebuilding industry include:

• Diversification: Expanding into different geographic markets and product segments to reduce reliance on any single market or customer base.
• Cost Management: Implementing cost-control measures to improve efficiency and reduce expenses throughout the construction process.
• Risk Management: Utilizing risk management tools and techniques to identify, assess, and mitigate potential risks.
• Strategic Partnerships: Forming partnerships with suppliers, subcontractors, and other industry players to enhance capabilities and reduce costs.

Understanding these risks and mitigation strategies is crucial for investors assessing Beazer Homes' financial health and future prospects. For additional insights into Beazer Homes' values, review Mission Statement, Vision, & Core Values of Beazer Homes USA, Inc. (BZH).

Beazer Homes USA, Inc. (BZH) Growth Opportunities

Beazer Homes USA, Inc. (BZH) possesses several key growth drivers that underpin its future prospects. These include strategic market expansions, a focus on appealing to first-time homebuyers, and innovative product offerings.

Analysis of key growth drivers:

• Targeting First-Time Homebuyers: Beazer Homes strategically focuses on the first-time homebuyer demographic, offering homes at attainable price points.
• Geographic Expansion: Beazer Homes is expanding strategically in high-growth markets, particularly in the Southeast, which drives revenue growth.
• Product Innovation: Beazer's Choice Plans™ and energy-efficient homes attract a wider range of buyers and align with sustainability trends.

Beazer Homes reported a total revenue of $2.8 billion for the fiscal year 2024. While specific future revenue growth projections and earnings estimates beyond 2024 are not available, several strategic initiatives and partnerships are expected to drive future growth.

Strategic initiatives and partnerships that may drive future growth:

• Mortgage Choice Program: Beazer Homes offers a Mortgage Choice program, allowing buyers to compare multiple loan offers.
• Energy-Efficient Construction: Beazer emphasizes energy-efficient construction, lowering utility costs for homeowners and aligning with green building trends.

Beazer Homes' competitive advantages include its focus on affordability, energy efficiency, and personalization. These factors position the company favorably for growth in the competitive homebuilding market.

The following table summarizes Beazer Homes' financial performance and key metrics:

These elements, combined with a commitment to innovation and customer satisfaction, should support continued growth for Beazer Homes. More information about the company's values can be found at Mission Statement, Vision, & Core Values of Beazer Homes USA, Inc. (BZH).