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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
Seeking Alpha
24 Oct 14 11:33:40
New Homes Sales: September Report Confirms That The Data Is Unreliable http://t.co/sG9Kdfanv6 $BZH $HOV $LEN $PHM $RYL $TOL
Market Int Center
24 Oct 14 08:38:03
Potential Beazer Homes USA $BZH Trade Has 15.20% Downside Protection ( http://t.co/x2qIqzO0gY )
Myrollingstocks
24 Oct 14 08:20:39
we think this stock may be a winner today $BZH http://t.co/m7vgIPcTIp
wininstocks2014
24 Oct 14 06:08:09
BZH 18.09 Stock Charts $BZH Beazer Homes USA Inc. (NYSE) Last Updated: 10/24/2014 08:08:11 BZH Stock Chart - 1 http://t.co/GO3f6iWDr6
4-traders.com
23 Oct 14 22:25:17
Fitch Updates Recovery Analyses for U.S. Homebuilding and Building Materials Issuers http://t.co/xpAtGir7Q3 $BZH $HOV $KBH $MHO $SPF $USG
DailyStockPicks
23 Oct 14 22:03:42
During this #Ebola outbreak, $BZH investors will also want to buy $SMED. They handle medical and hazardous waste http://t.co/vTV3wPBONo
Market Int Center
23 Oct 14 12:35:31
Beazer Homes USA $BZH Trading Near $17.57 Support Level ( http://t.co/UrgzqXHiHk )
DailyStockPicks
23 Oct 14 12:16:50
Since #alert to buy Spectra7 on 10/16, it has moved from $0.59 to $0.79. Target $1+ $BZH http://t.co/UGK1Sij9xy http://t.co/T42VcwGTev
wininstocks2014
23 Oct 14 03:46:25
BZH 18.01 Stock Charts $BZH Beazer Homes USA Inc. (NYSE) Last Updated: 10/23/2014 05:46:24 BZH Stock Chart - 1 http://t.co/k29Nm44ATw
Market Int Center
22 Oct 14 07:14:13
Beazer Homes USA $BZH Trading Near $17.40 Support Level ( http://t.co/zwkr5QHq3a )
Seeking Alpha
21 Oct 14 12:24:25
Existing Home Sales Decline Year Over Year For Eleven Months In Row http://t.co/EyTJ4wngcv $BZH $DHI $KBH $LEN $PHM $RYL $TOL
Media Sentiment
21 Oct 14 11:49:54
$BZH received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 458
Market Int Center
21 Oct 14 11:46:17
Beazer Homes USA $BZH Showing Bearish Technicals With Support At $17.08 ( http://t.co/z7Jrm49aV6 )
DailyStockPicks
21 Oct 14 11:31:13
Earnings out for Owens Corning tomorrow. Is it due for a collapse? http://t.co/Est9NjxYUb $TOL $XHB $LEN $PHM $DHI $HOV $BZH $KBH
Jack
20 Oct 14 12:56:02
Short half position $BZH 17.57. Lower price than I planned...
Jack
19 Oct 14 17:11:19
$BZH possibly good short above 18.25 (100-day) http://t.co/rJrnAQFDPf
FonsieTrader
18 Oct 14 06:13:23
Parabolic Sar Buy Signals 2/4 $BAS $BBRY $BEAV $BEN $BIDU $BKW $BMY $BP $BSBR $BZH $CAT $CBI $CCE $CCJ $CIE $CNI $CNQ http://t.co/7w974pMZ56
FonsieTrader
18 Oct 14 06:08:55
Bullish ADX Crossovers 1/4 $AEL $AKRX $ALKS $ALXN $AMGN $BEE $BIDU $BKW $BZH $CB $CCI $CCK $CECO $CHRW $COST $CYTR http://t.co/sy3NTIH7w2
Media Sentiment
17 Oct 14 07:15:04
$BZH received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 229
Market Int Center
17 Oct 14 07:13:30
Beazer Homes USA $BZH Showing Bearish Technicals With Resistance At $17.94 ( http://t.co/NS3s7z5RdB )
Market Int Center
16 Oct 14 11:20:38
Potential Beazer Homes USA $BZH Trade Has 14.19% Downside Protection ( http://t.co/QUMWicZfA8 )
				
				
By  +Follow August 1, 2013 8:16AM
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