BZH Stock Forecast & Price Target

Beazer Homes USA Inc. is projected to achieve a 6% year-over-year increase in closings and a 1% increase in the average closing price, reflecting a positive sales outlook. The company's strategy of expanding its active communities to over 200 by FY26, along with an anticipated 15% year-over-year community growth in FY25, underscores its strong growth trajectory. Additionally, significant improvements in the balance sheet, including a reduction in the net debt to capitalization ratio from 64.5% in F3Q20 to a projected mid-30% level by FYE24, further enhance Beazer's financial health and position for future expansion.

Beazer Homes USA Inc. experienced an 11% year-over-year decline in orders for F3Q24, totaling 1,070 homes, which fell short of previous estimates and reflected a decrease in sales absorption rates to 2.4 orders per month, lower than the anticipated 3.0 orders per month. The adjustment in sales forecasts anticipates 1.1k closings for F4Q24, down from earlier predictions, while overall FY25 earnings per share estimates have been revised down to $4.43 from $4.93. Despite a projected revenue increase to $2.7 billion for FY25 driven by unit closing growth, concerns about entry-level demand and a sales mix impact from legacy homes versus new home strategies contribute to a fundamentally bearish outlook on the stock.