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

You've been watching the homebuilding sector, and honestly, the market noise around mortgage rates and inventory has made it tough to see where Beazer Homes USA, Inc. actually stands. The direct takeaway is that despite a tough macroeconomic environment, Beazer Homes delivered a surprisingly strong finish, but the underlying pressure on margins is defintely real. They closed out fiscal year 2025 with homebuilding revenue of $2.30 billion, a slight increase, and reported diluted earnings per share (EPS) of $1.52 for the full year, powered by a Q4 beat where adjusted EPS hit $1.07, surpassing consensus estimates by over 33%. Still, you can't ignore that the homebuilding gross margin compressed to 14.3% for the year, a clear sign that the market remains highly incentive-driven, forcing them to trade margin for volume. The good news is they've been cleaning up the balance sheet, reducing net debt to net capitalization to below 40%, plus they're targeting a 5% to 10% increase in closings for fiscal 2026, which is a clear opportunity. Now, let's dig into what those numbers truly mean for your investment strategy.

Revenue Analysis

You need to know where the money is coming from, and for Beazer Homes USA, Inc. (BZH), the story is straightforward: it's almost all home sales. For the full fiscal year 2025, the company reported total revenue of roughly $2.37$ billion, marking a modest year-over-year increase of about $1.8\%$.

The core of this business is, and remains, homebuilding. This segment contributed $2.30$ billion to the top line, which is approximately $97.0\%$ of the total revenue. This is a pure-play homebuilder, so any major shift in the housing market hits this number directly. The other, much smaller, revenue stream comes from land sales and other non-homebuilding activities, which you can think of as portfolio management. Land sales provide capital flexibility, but they aren't the engine of growth.

The year-over-year growth rate for the dominant Homebuilding revenue segment was a slight uptick of only $0.4\%$. Honestly, that's a flat year in a challenging market, which is worth a closer look. Here's the quick math on what drove that marginal gain:

• Average Selling Price (ASP) rose $0.9\%$ to $520.1$ thousand.
• Home Closings decreased $0.5\%$ to 4,427 homes.

The small revenue growth was entirely due to an increase in the average price per home, not an increase in volume (closings). That tells you the market is incentive-driven and highly competitive, as management noted, but the focus on higher-priced homes is helping to offset the lower volume. If you want to dive deeper into who is buying these homes, you can check out Exploring Beazer Homes USA, Inc. (BZH) Investor Profile: Who's Buying and Why?

The contribution of the primary revenue streams is shown below. This breakdown clearly illustrates that your investment thesis for Beazer Homes USA, Inc. must defintely be centered on the health of the US new home sales market, especially their ability to maintain pricing power (ASP) despite lower closing volumes.

What this estimate hides is the change in the mix of sales. The company is actively selling more spec homes (speculative homes built before a buyer is secured) to improve construction cycle times, which is a significant operational change impacting quarterly revenue flow, even if the annual total is almost flat. They are managing the business for efficiency in a tough environment, not for aggressive top-line expansion right now.

Profitability Metrics

You need to know if Beazer Homes USA, Inc. (BZH) is making money efficiently, especially in a housing market that's been tough on affordability. The short answer is that profitability is under pressure, largely due to the high cost of incentives needed to close sales, which is a common theme across the homebuilding sector right now. For the full fiscal year 2025, Beazer Homes generated $2.30 billion in homebuilding revenue, but margins across the board are thin and declining.

The core issue is margin compression-the squeeze between costs and the final sale price. Here's the quick math on their core profitability for the fiscal year ending September 30, 2025, using total revenue of $2.37 billion for the denominator:

• Gross Profit Margin: 14.3%
• Adjusted EBITDA Margin (a proxy for operating profit): 6.65% (Calculated from $157.7 million Adjusted EBITDA)
• Net Profit Margin: 1.92% (Calculated from $45.6 million Net Income)

Trends in Profitability Over Time

The trend is the most concerning part of the story. In fiscal year 2025, Beazer Homes' homebuilding gross margin dropped by a significant 370 basis points year-over-year, falling to 14.3%. This isn't just a minor dip; it reflects a challenging environment where the company has to offer more concessions, like mortgage rate buydowns, just to keep sales volume up. Adjusted EBITDA, a key measure of operational cash flow, was also down 35.2% to $157.7 million.

The market is incentive-driven, and that directly eats into the gross margin. To be fair, they finished the year on a positive note, exceeding 1,400 closings in the fourth quarter, but you can see the cost of that volume in the declining margins. Exploring Beazer Homes USA, Inc. (BZH) Investor Profile: Who's Buying and Why?

Industry Comparison and Operational Efficiency

When you stack Beazer Homes against the industry, the margin gap becomes clear. While the National Association of Home Builders (NAHB) data from 2023 showed the average single-family builder achieving a 20.7% gross profit margin and an 8.7% net profit margin, Beazer Homes is operating well below those benchmarks in 2025.

Even compared to large, publicly traded peers in the first half of 2025-where D.R. Horton saw a gross margin of 21.8% and Lennar was at 17.8%-Beazer Homes' 14.3% gross margin for the full year puts them at the lower end of the spectrum. This suggests they are either facing higher direct costs, or they are having to offer much deeper incentives to move inventory, or defintely some combination of both.

Operational efficiency is another pressure point. Selling, General, and Administrative (SG&A) expenses as a percentage of total revenue actually increased by 50 basis points to 11.9% in fiscal 2025. This is a critical ratio: a higher SG&A percentage means more of the revenue is being spent on overhead and less is flowing down to operating profit. The industry average for operating expenses in 2023 was around 12.0% of revenue, so BZH is right there, but the rise in this ratio while gross margins plummet signals a difficult operational environment.

The strategy to combat this involves leveraging their position as an energy-efficient homebuilder to offset affordability concerns with lower long-term ownership costs. But for now, the numbers show a business fighting hard to maintain volume at the expense of its margins. The focus going forward must be on cost control and getting that gross margin back toward the mid-to-high teens.

Debt vs. Equity Structure

You're looking at Beazer Homes USA, Inc. (BZH) and wondering if their growth is built on a solid foundation or a mountain of debt. Honestly, the company is managing a moderate level of financial leverage (debt-to-equity), but it's a tightrope walk in this high-interest environment.

For the fiscal year ended September 30, 2025, Beazer Homes USA, Inc.'s debt-to-equity ratio was around 0.85 to 0.94. Here's the quick math: this means for every dollar of shareholder equity, the company is using between 85 and 94 cents of debt to finance its assets. Compared to the general construction industry benchmark of 0.5-1.5, Beazer Homes USA, Inc. is sitting comfortably within the healthy range, though close to the 1.0 level that financial guarantors often prefer.

The company's overall debt profile is primarily long-term. As of June 2025, the Long-Term Debt & Capital Lease Obligation stood at approximately $1,162 million. Importantly, they have no material debt maturities until October 2027, which gives them breathing room to execute their deleveraging strategy.

Their focus on reducing debt is clear. The Net Debt to Net Capitalization ratio-a key metric for homebuilders-was reduced to 39.5% at the end of fiscal 2025, down from 40.0% a year prior. They've set a target to get this ratio down to the low 30% range by the end of fiscal 2027, which is a strong signal of balance sheet discipline.

Still, managing this leverage is a priority, as evidenced by a recent credit rating action. S&P Global Ratings downgraded the company's issuer credit rating to 'B' from 'B+' on November 7, 2025, due to higher-than-expected leverage metrics relative to their forecast for EBITDA. This downgrade is a reminder that while the debt-to-equity ratio looks good against the industry, the debt-to-EBITDA ratio (leverage) is under scrutiny. You defintely need to watch their EBITDA performance in 2026.

The company balances its financing through a mix of strategic debt management and equity utilization:

• Refinancing Debt: In March 2024, they proposed a $250 million offering of Senior Unsecured Notes due 2031 to redeem the $197.9 million of 6.750% Senior Notes that matured in March 2025, pushing out their maturity wall.
• Strategic Share Repurchases: They repurchased about 1.5 million shares in fiscal 2025, representing about 5% of the company, which is a way to return capital to shareholders and enhance book value per share, which grew to nearly $43.
• Liquidity Buffer: They finished fiscal 2025 with strong liquidity of nearly $540 million, including $215 million of unrestricted cash and nothing drawn on their revolving credit facility.

The core of their strategy is to fund growth organically while allocating excess cash to pay down net debt. This focus on deleveraging while simultaneously expanding their community count to 164 in FY 2025 is the key tension point for investors. You can find more detail on who holds this debt and equity in Exploring Beazer Homes USA, Inc. (BZH) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You need to know if Beazer Homes USA, Inc. (BZH) has the cash flow and balance sheet strength to weather a competitive housing market, and the short answer is yes, they show strong short-term liquidity, but their cash generation from core operations is tight. The key is that their substantial inventory position skews the picture, which is typical for homebuilders.

The company's liquidity positions, measured by the Current Ratio and Quick Ratio (Acid-Test Ratio), tell a story of a capital-intensive business. For the fiscal year ending September 30, 2025, Beazer Homes USA, Inc. (BZH) reported a Current Ratio of 8.91, which looks phenomenal on paper, but you have to dig deeper. This ratio compares current assets to current liabilities, and a high number suggests strong ability to cover near-term debts.

The Quick Ratio, however, strips out inventory-which, for a homebuilder, is land and homes under construction-because converting that to cash takes time. This ratio stood at just 0.61 for the same period. That's a stark contrast. It means if you only count cash and receivables, the company doesn't have enough to cover its current debts, but that's not defintely a red flag for a homebuilder. It just means their liquidity is tied up in their product.

• Current Ratio: 8.91 (Strong on paper)
• Quick Ratio: 0.61 (Highlights inventory reliance)

Working Capital and Cash Flow Trends

Working capital (Current Assets minus Current Liabilities) remains substantial, which is a key strength. Based on the fiscal year 2025 balance sheet components, Beazer Homes USA, Inc. (BZH) had current assets of $2,326 million and current liabilities around $219.25 million, implying a working capital of about $2,106.75 million. This large buffer is primarily the value of their land and homes, which is a strategic asset for future revenue, not just a quick cash source.

Here's the quick math on their cash flow statements for the full 2025 fiscal year, which shows where the capital is moving:

The $31.98 million in Operating Cash Flow is positive, but it's small relative to their revenue of $2.30 billion, showing the pressure on margins and the capital-intensive nature of homebuilding. The net investment in land of over $600 million shows the company is still actively building its future community base, which is a necessary use of capital. They are managing this by increasing their optioned lot share to 62% from 58%, which is a capital-disciplined way to control land without owning it outright.

Potential Liquidity Concerns or Strengths

The primary strength is the robust total available liquidity, which stood at $538.3 million at fiscal year-end. This includes $214.7 million in unrestricted cash and $323.6 million in undrawn capacity on their revolving credit facility. This cash cushion, plus no significant debt maturities until October 2027, provides a strong defense against market volatility and gives management flexibility to execute its growth plan. The liquidity is there. Mission Statement, Vision, & Core Values of Beazer Homes USA, Inc. (BZH).

A potential concern is the low Operating Cash Flow relative to the size of the business, which means they are relying on their existing cash and credit lines to fund their land investment. Still, management is focused on balance sheet efficiency and is actively working to reduce their net debt to net capitalization ratio, which was 39.5% at year-end, with a long-term goal of reaching the low-30% range by fiscal 2027.

Next Step: Check the company's Q1 2026 guidance to see if the expected margin improvement and cost savings are translating into stronger operating cash flow. Finance: Get the Q1 2026 cash flow forecast by month-end.

Valuation Analysis

You are asking the right question: is Beazer Homes USA, Inc. (BZH) overvalued or undervalued? Looking at the fiscal year 2025 data, the stock appears to be trading at a significant discount based on traditional book value metrics, but its earnings multiples reflect the market's caution about future profitability in a challenging housing environment.

The short answer is that Beazer Homes USA, Inc. is technically undervalued on a Price-to-Book basis, but its valuation multiples on earnings and cash flow suggest the market is pricing in substantial risk. This is a classic 'cheap for a reason' scenario, and you need to understand the underlying ratios before making a move.

• Stock Price (Nov 14, 2025): $21.85
• 52-Week Range: $17.37 to $38.22
• 12-Month Performance: Decreased 34.29%

Here's the quick math on the key valuation multiples based on the latest fiscal 2025 data:

What this estimate hides is the volatility. The P/E ratio of 9.89x is based on the trailing twelve months (TTM) earnings per share (EPS) of $2.20, but the company's full fiscal year 2025 net income from continuing operations was only $45.6 million. The market is worried about the path of future earnings, which is why the stock trades so far below its book value per share of $42.57.

Analyst Consensus and Dividend Reality

The analyst community is defintely mixed on Beazer Homes USA, Inc., which is common for cyclical homebuilders. The consensus rating is generally a Hold, though some sources lean toward a Strong Buy. This split tells you there's a fundamental disagreement on whether the housing market headwinds-like high mortgage rates-are fully priced in.

The average analyst price target is around $31.33, which implies a potential upside of over 43% from the recent price of $21.85, but the range is wide, from a low of $23.00 to a high of $41.00. The target is a sign that analysts see the deep P/B discount as unsustainable if the company can execute its strategy, like achieving its multi-year goal of increasing book value per share to the mid-$50s by fiscal year 2027.

One thing is clear: Beazer Homes USA, Inc. is focused on reinvestment and balance sheet efficiency, not shareholder payouts. The company does not currently pay a dividend. Consequently, the dividend yield and payout ratio are both 0.00%. Your return will come entirely from capital appreciation, not income. If you want to dive deeper into who is betting on this turnaround, you should check out Exploring Beazer Homes USA, Inc. (BZH) Investor Profile: Who's Buying and Why?

Next Step: Portfolio Manager: Compare BZH's P/B ratio (0.51x) against its closest peers to quantify the potential 'margin of safety' by Friday.

Risk Factors

You're looking at Beazer Homes USA, Inc. (BZH), and you need to know what could trip up their financial performance. The biggest near-term risks for any homebuilder right now are a tight knot of interest rates, land costs, and labor availability. These aren't just market headwinds; they directly squeeze margins and slow down production, which is defintely a problem.

Beazer Homes USA, Inc. (BZH), like its peers, faces a dual challenge: external market volatility and internal operational efficiency. The external environment, specifically the Federal Reserve's actions on the Federal Funds Rate, dictates mortgage rates. When the 30-year fixed rate jumps-say, from 6.5% to 7.5%-it immediately cuts into buyer affordability, shrinking the pool of qualified customers. This is the single largest external risk because it directly impacts demand and, therefore, the company's ability to hit its projected 2025 closings.

• Higher rates kill buyer affordability.
• Land and labor shortages inflate costs.
• Regulatory shifts add compliance burden.

On the operational side, the cost and availability of key inputs are a constant headache. Recent filings highlight the persistent supply chain issues, not just for materials like lumber and windows, but critically, for skilled labor. Here's the quick math: if the average cycle time to complete a home extends by 30 days due to labor shortages, it delays revenue recognition and ties up working capital longer. That's a direct hit to cash flow and return on assets.

Strategic risks often center on the balance sheet and debt maturity. While Beazer Homes USA, Inc. (BZH) has focused on reducing its debt-to-capital ratio, a sudden, sharp downturn in the housing market could still pressure their liquidity. What this estimate hides is the risk of holding too much raw or partially developed land if the market stalls, forcing potential write-downs (impairments) on those assets.

To be fair, Beazer Homes USA, Inc. (BZH) has clear mitigation strategies. They are focused on a "Move-In Ready" inventory strategy, which helps them control the sales cycle and offers buyers a quicker closing, lessening the risk of a rate lock expiring. They also use land-light strategies, optioning land instead of buying it outright, which reduces the capital tied up in non-earning assets. This is a smart move to manage their exposure to land valuation risk.

Also, the company's geographic diversification helps. They operate across multiple states, so a slump in one regional market, like the Pacific Northwest, might be offset by resilience in the Southeast. Still, the overall health of the US economy and employment figures remain the ultimate drivers. You should also take a deeper look at the capital structure-specifically, the maturity dates of their corporate bonds-to understand their refinancing risk.

For more on who is betting on Beazer Homes USA, Inc. (BZH), you might want to check out Exploring Beazer Homes USA, Inc. (BZH) Investor Profile: Who's Buying and Why?

Here is a simplified view of the primary risk categories:

Finance: Track the company's gross margin trends over the next two quarters to see if their pricing power is holding up against these rising costs.

Growth Opportunities

You're looking beyond the challenging 2025 market-and you should be. Beazer Homes USA, Inc. (BZH) finished its fiscal year with a solid fourth quarter, but the real story for investors is the clear, multi-year strategy to drive growth and efficiency, not just weather the storm. The company has a defined path to grow its community count and fundamentally improve its balance sheet, which is defintely the right move in this high-rate environment.

Fiscal 2025 homebuilding revenue came in at $2.30 billion, a modest 0.4% increase, but the company is not resting on that. Management is laser-focused on three key multi-year goals, all targeted for completion by the end of fiscal 2027. Here's the quick math on the growth engine:

• Active Communities: Grow from an average of 164 in FY2025 to exceeding 200.
• Deleveraging: Reduce the net debt to net capitalization ratio from 39.5% to the low-30% range.
• Book Value: Increase book value per share from nearly $43 into the mid-$50s.

This community count expansion, coupled with an expected improvement in sales pace, especially in the third quarter of fiscal 2026, is what will drive the top line. Analysts project a fiscal 2026 revenue of $2.41 billion and earnings per share (EPS) of $2.00, up from the 2025 diluted EPS of $1.52. That's a clear step-up in profitability.

Competitive Edge: Affordability Through Efficiency

The biggest near-term risk for homebuilders is still affordability. But Beazer Homes USA, Inc. has built a true competitive advantage around this problem by positioning itself as America's #1 energy-efficient homebuilder. This isn't just a marketing slogan; it's a structural cost advantage for the buyer.

The company's focus on Zero Energy Ready Homes and its Mortgage Choice Program offers a compelling, multi-faceted approach to lowering the total cost of home ownership. They estimate these initiatives provide homeowners approximately $3,000 in annual savings compared to comparable new homes. Plus, their average Home Energy Rating System (HERS) score of 32 in fiscal 2025 is significantly better than the industry average, which is a tangible product innovation.

Strategic Financial Discipline

To be fair, growth isn't just about selling more homes; it's about capital efficiency. Beazer Homes USA, Inc. is actively managing its land portfolio, increasing its percentage of controlled lots through option agreements to 62% in fiscal 2025. This pivot to optioned lots, up from 57.8% a year prior, gives them much greater flexibility in a volatile market, reducing immediate cash outlay.

Also, the company is using its balance sheet efficiency to drive shareholder value. They are targeting accelerated deleveraging in fiscal 2026 and have an ongoing share repurchase program. This disciplined capital allocation, alongside operational improvements that are expected to drive about 3 points of margin improvement by the fourth quarter of fiscal 2026, is a strong signal that management is serious about maximizing asset returns.

The company's growth is fundamentally tied to its ability to execute on these multi-year goals, translating community count growth and energy-efficiency into better margins and a stronger balance sheet. For a deeper dive into the company's financial foundation, you can read more here: Breaking Down Beazer Homes USA, Inc. (BZH) Financial Health: Key Insights for Investors.