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A Technical Look as Beazer Beats on Earnings, Targets Profitability in Fiscal 2014

By  +Follow August 1, 2013 8:16AM
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Despite posting a net loss for the recent quarter, Beazer Homes USA Inc. (BZH) , a top ten U.S. homebuilder, believes that it is on a path to record its first profitable fiscal year in almost a decade next year as average home price sales are improving and margins are widening.

For the fiscal third quarter ended June 30, Beazer reported total revenue of $314.44 million, up from $254.56 million in the third quarter last year.  Net loss for the quarter contracted to $5.79 million, or 22 cents per share, from $39.89 million, or $1.92 per share, in the year prior quarter.

Wall Street was expecting a net loss of 37 cents per share on revenue of $332 million.

The Atlanta-based company blamed an expected decline in community count for an 11.2 percent year-over-year decline in third-quarter orders (from 1,555 to 1,381), but said it “expects a materially higher community count by the end of Fiscal 2014.”  For the first nine months of fiscal 2013, orders are up by 1.1 percent at 3,834 compared to the same period last year.

On the sunny side, adjusted EBITDA rose five-fold to $21.8 million for the quarter, up from $4.0 million in the third quarter of Fiscal 2012.

For the quarter, the average sales price from closing increased almost 12 percent, from $227,300 last year to $253,800.  Total home closings were up 11.3 percent to 1,234 from 1,109 last year.

Gross margin, not including impairments and abandonments, jumped from 10.5 percent last year to 17.1 percent in the latest quarter.  Gross profit improved to $54.12 million from $21.23 million.

Cancellation rates fell by 450 basis points to 20 percent.

Backlog at the end of the quarter was 2,358 units with a sales value of $646.1 million, down by 61 units from the end of Q3 last year, but up in value by $73.3 million.

Ultra-low interest rates, that in some markets make it cheaper to buy than rent, coupled with banks loosening their purse strings a bit, have helped the housing market make a strong recovery for just over a year now.  Last week, the Commerce Department said that new home sales climbed to a five-year high in June as sales of single-family units improved 8.3 percent to a 497,000 annualized rate.

Technically speaking, the BZH chart can have some particular appeal when viewed from the longer term.  First, a look at the 6-month chart…not particularly impressive, other than sitting not far off a support level at $16.50.

 

 

However, zooming out to a 30-month chart shows the reversal that the stock price has made since falling from over $30 per share early in 2011 to a low of $6.73 in October 2011 (prices adjusted for a 1-for-5 reverse split that month).  From this perspective, Beazer may be sitting in an attractive position.  Closing at $17.19 on Wednesday, the upside to static resistance at $20 is greater than 16 percent.  To continue the upward path, especially if the company can hit its profitability goal next year, the headroom is obviously far greater.

 

That’s the technical look.  Now, it’s important to remember that resurgence in the housing sector has been fueled in part by the efforts of the Federal Reserve.  The impact of inevitable tapering – and eventual ending – of QE3 has yet to be determined.  Rising interest rates, pent-up demand subsiding or a slowdown in the economy can cause the housing recovery to grind to a much slower pace.  Things look strong at the moment, but there are still risks that must be considered.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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Results for BZH
Breaking News Now
30 Mar 15 14:10:01
$CCS $BZH: First-Time Buyers Rising: Which Homebuilders Benefit?: http://t.co/KkBY3TiRBL
Timothy Collins
30 Mar 15 08:27:54
$ITB $MTH $BZH homebuilders have real nice setups on the daily charts here. Just pushing out from resistance
Penny Stock Secret
29 Mar 15 23:42:27
This Guy Is Making Millions! Watch This Video Proof Here At http://t.co/NovWYe2RAx .. $BYM $BZH $BZT
dailystockplays.com
28 Mar 15 11:22:08
RSI Overbought http://t.co/lSSrRFsIvh $WMB $NFX $RRC $SLCA $RICE $EPE $CRZO $CXO $WLK $HLX $OII $JAKK $USLV $CLB $BZH $TGA $GORO $EXH $AOI
Francisco de la Lama
28 Mar 15 04:05:49
RT @Sandman7591: Some ideas for March 23 $AFFX $ARRY $BTU $BZH $CX $FRM $HILL $LOV $MOBL $PLPM $SIGM $SOL $TSYS
Daily Contracts
27 Mar 15 09:06:02
Real-Time feed of company contracts, original agreements and executive updates from $BZH http://t.co/LKQMm4wsRZ
Market Int Center
27 Mar 15 05:52:11
Beazer Homes USA $BZH Trading Near $16.81 Support Level ( http://t.co/RZkV5FfWlQ )
Peter Bardens
26 Mar 15 09:04:05
$BZH Beazer Homes USA Receives Consensus Rating of "Hold" from Analysts (NYSE ... http://t.co/jnozbmO1IG
Funding Mexico
26 Mar 15 03:01:30
RT @Sandman7591: Some ideas for March 23 $AFFX $ARRY $BTU $BZH $CX $FRM $HILL $LOV $MOBL $PLPM $SIGM $SOL $TSYS
Sandro Piancone
26 Mar 15 02:43:07
RT @Sandman7591: Some ideas for March 23 $AFFX $ARRY $BTU $BZH $CX $FRM $HILL $LOV $MOBL $PLPM $SIGM $SOL $TSYS
dailystockplays.com
25 Mar 15 14:49:14
Dark Cloud Cover http://t.co/hgdOeMQXpJ $CX $BTU $POT $PZ $JASO $CVE $BCE $BZH $DHT $HOLI $MLM $DECK $BCO $CBT $FDP $DNP $OME $LNDC
Robert Leithiser
24 Mar 15 18:19:26
Commented on: "Existing Home Sales Miss Street Estimates - Underlying Data Still B... http://t.co/cdSPJDphTv $BZH $DHI $KBH $LEN
Media Sentiment
24 Mar 15 08:54:56
$BZH received a new alert. Find out why at http://t.co/nZwqRf3BRT #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 184
Market Int Center
24 Mar 15 08:51:07
Beazer Homes USA $BZH Showing Bullish Technicals With Resistance At $17.67 ( http://t.co/P4dH3UzIDY )
Matt Hughes
24 Mar 15 08:13:37
Pour a little for your homies. $KBH $BZH
Chet Malhotra
24 Mar 15 07:09:21
@GrantDossetto @thirdgenwidget New Home Sales +7.8% YoY +539k. Stronger but very volatile series..prices -5% MoM 2 $275K. $KBH $BZH
ProTradersNews
24 Mar 15 04:00:04
$BZH: Beazer Homes USA Bonds Trading 1% Higher (BZH): http://t.co/z07Jqwd0Zp
NASDAQ
24 Mar 15 01:15:07
$BZH - Existing Home Sales Miss Street Estimates - Underlying Data Still Bearish http://t.co/Fbi4ZCa1vR
Jason Olive
24 Mar 15 01:12:03
RT @SeekingAlpha: Existing Home Sales Miss Street Estimates - Underlying Data Still Bearish http://t.co/8LNGphoKNy $BZH $DHI $KBH $LEN $PHM…
Alysia Sarkisian
24 Mar 15 01:07:49
RT @SeekingAlpha: Existing Home Sales Miss Street Estimates - Underlying Data Still Bearish http://t.co/8LNGphoKNy $BZH $DHI $KBH $LEN $PHM…
Media Sentiment
24 Mar 15 01:05:02
$BZH received a new alert. Find out why at http://t.co/nZwqReM0tj #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 2
Seeking Alpha
24 Mar 15 01:04:16
Existing Home Sales Miss Street Estimates - Underlying Data Still Bearish http://t.co/8LNGphoKNy $BZH $DHI $KBH $LEN $PHM $RYL $TOL
ProTradersNews
23 Mar 15 19:25:03
$BZH: Beazer Homes USA Debt Trading 1% Higher (BZH): http://t.co/HoSigbuOMp
Capital Market Labs
23 Mar 15 16:14:02
$CCS, $BZH, $HOV, $MHO, $LGIH Earnings Trend Comparison http://t.co/9I8JnJQ3ZM https://t.co/O7J0gCDLXd
				
				
By  +Follow August 1, 2013 8:16AM
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