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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.


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Results for BZH
Daily Contracts
1 Sep 14 07:53:01
Real-Time feed of company contracts, original agreements and executive updates from Beazer Homes $BZH http://t.co/ciXZ3xjg5e
Stock Signaling
31 Aug 14 07:01:35
Top Stocks (By Trading Liquidity): $CSLT $PRAN $BZH $DATA $HSH $TKMR $PEIX $SWHC $AMD $DF $CYTR $HERO $TSL $NRF $ESI http://t.co/Vtx6dLy0Nw
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30 Aug 14 11:09:01
$BZH: Beazer Bulldozed By Weak Earnings http://t.co/VfCH8cOEFR http://t.co/MYIbo2NTbx
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30 Aug 14 07:01:23
Top Stocks (By Trading Liquidity): $CSLT $PRAN $BZH $DATA $HSH $TKMR $PEIX $SWHC $AMD $DF $CYTR $HERO $TSL $NRF $ESI http://t.co/Vtx6dLy0Nw
Stock Signaling
29 Aug 14 16:31:20
Top Stocks (By Trading Liquidity): $CSLT $PRAN $BZH $DATA $HSH $TKMR $PEIX $SWHC $AMD $DF $CYTR $HERO $TSL $NRF $ESI http://t.co/Vtx6dLy0Nw
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29 Aug 14 15:09:08
$BZH: Airlines take flight as crude oil prices ease http://t.co/1CKdjKSptc http://t.co/DpnVCxphTG
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29 Aug 14 14:09:08
$BZH: Beazer Homes Usa, Inc. (BZH) Posts Q3 GAAP Loss of 47c/Share http://t.co/jxj3envHrJ http://t.co/nA6gDPqSG7
Stock Signaling
29 Aug 14 13:31:22
Top Stocks (By Trading Liquidity): $PRAN $BZH $DATA $HSH $TKMR $PEIX $SWHC $AMD $DF $CYTR $HERO $TSL $NRF $ESI $SPLK http://t.co/Vtx6dLy0Nw
Market News
28 Aug 14 05:09:03
$BZH: Beazer Homes USA Given Average Recommendation of “Hold” by Analysts ... http://t.co/ilmCh5ourm http://t.co/hHjApwSkGf
Thinking Alpha
28 Aug 14 04:45:05
#Economic Calendar Thursday August 28: 10:00 #PendingHomeSales Talk @ forums: http://t.co/bYlLbdYq5O $BZH $DHI $HOV $KBH $LEN $PHM $RYL $TOL
Market Int Center
27 Aug 14 11:19:54
Potential Beazer Homes USA $BZH Trade Has 9.71% Downside Protection ( http://t.co/wWqNGC7N5m )
TraderMinute
27 Aug 14 07:58:43
$RYL and $BZH look tempting but $WY has been the winner in this group so far & it's been consolidating for a few days
Market Updater
27 Aug 14 05:08:59
$BZH: Beazer Homes USA Receives Consensus Rating of "Hold" from Brokerages ... http://t.co/UkQvJj9osR http://t.co/aKEiO7wOAz
Vic Scherer
26 Aug 14 13:19:36
$BZH poised for a day2 continuation... cud be thin.
Myrollingstocks
26 Aug 14 09:15:44
What about $BZH http://t.co/xaqjGyuY8C
Seeking Alpha
26 Aug 14 04:37:11
XHB: Housing Stock Traders Just Got A Gift http://t.co/3FlO3wFoqb $BZH $DHI $HOV $KBH $PHM $TOL $XHB
				
				
By  +Follow August 1, 2013 8:16AM
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