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Here's Why You Should Add Beazer Homes (BZH) Stock Right Now
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Shares of Atlanta-based homebuilder Beazer Homes USA, Inc. (BZH - Free Report) have gained 35% over the last three months, substantially outperforming the 4.9% growth of its industry. Additionally, the company outperformed the industry in each of the four-week, 12-week and 52-week time frames.
Beazer Homes expects new home sales and closings to be lower in the quarter ending Sep 30 on a year-over-year basis due to Harvey and Irma-related impact. That said, the company anticipates the impact to be temporary and remains confident about the substantial productivity gains in fiscal 2018. It also continues to expect an improvement in adjusted EBITDA in the quarter from the prior year.
We believe higher earnings growth and improving industry conditions are likely to aid the stock in maintaining its solid performance in the quarters ahead.
Further, the Zacks Consensus Estimate for current-year’s earnings increased 7.8% in the last 60 days, thus reflecting optimism in the stock’s prospects and substantiating its Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
What Makes Beazer Homes a Solid Pick?
Solid Estimated EPS Growth: The homebuilder’s current-quarter earnings are expected to increase 69.7% year over year, comfortably outpacing the industry’s average projected growth of 45.4%. The company’s projected sales growth is a healthy 4.5%.
Meanwhile, the company’s EPS is expected to decline 19.8% for the current year. Nonetheless, Beazer Homes is expected to show a stellar performance in fiscal 2018 with its bottom line expected to grow 53.5%, comfortably outpacing the industry’s expected 13.5% growth rate.
Arguably, nothing is more important than earnings growth as surging profit levels are often an indication of strong prospects (and stock price gains) for the company in question.
Reasonably Valued Stock: Because of homebuilders’ asset-driven nature, it makes sense to value them based on price-to-book (P/B) ratio. The company currently has a trailing 12-month P/B ratio of 0.91. This is quite cheap compared with the industry as well as the market at large, as the current P/B for the industry and S&P 500 is 1.70 and 3.67, respectively. Its lower-than-market positioning indicates that there is room for an upside in the quarters ahead.
Solid Industry Fundamental: The latest July housing data indeed reflects soft housing momentum for the time being. Nevertheless, the 2017 outlook for homebuilding seems to be solid given strong economic growth and labor market. The U.S. economy grew faster-than-anticipated in the second quarter (fastest pace in more than two years) and showed a significant jump from the first quarter’s lackluster 1.2% growth. The economy grew at an annual rate of 3% in the April-June period, the Commerce Department said in its second estimate on Aug 30. Along with this, solid homebuilders’ confidence (64 in September) raises optimism about the entire construction sector.
The housing/homebuilding industry has been riding high on steady job and wage growth, historically low mortgage rates and rapidly increasing household formation. The positive momentum is evident from the robust Zacks Industry Rank (Top 22% out of 256 industries).
Consequently, homebuilding companies like Beazer Homes, KB Home (KBH - Free Report) , D.R. Horton, Inc. (DHI - Free Report) , PulteGroup Inc. (PHM - Free Report) and others are expected to gain from such positive industry fundamentals and higher demand.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Here's Why You Should Add Beazer Homes (BZH) Stock Right Now
Shares of Atlanta-based homebuilder Beazer Homes USA, Inc. (BZH - Free Report) have gained 35% over the last three months, substantially outperforming the 4.9% growth of its industry. Additionally, the company outperformed the industry in each of the four-week, 12-week and 52-week time frames.
Beazer Homes expects new home sales and closings to be lower in the quarter ending Sep 30 on a year-over-year basis due to Harvey and Irma-related impact. That said, the company anticipates the impact to be temporary and remains confident about the substantial productivity gains in fiscal 2018. It also continues to expect an improvement in adjusted EBITDA in the quarter from the prior year.
We believe higher earnings growth and improving industry conditions are likely to aid the stock in maintaining its solid performance in the quarters ahead.
Further, the Zacks Consensus Estimate for current-year’s earnings increased 7.8% in the last 60 days, thus reflecting optimism in the stock’s prospects and substantiating its Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
What Makes Beazer Homes a Solid Pick?
Solid Estimated EPS Growth: The homebuilder’s current-quarter earnings are expected to increase 69.7% year over year, comfortably outpacing the industry’s average projected growth of 45.4%. The company’s projected sales growth is a healthy 4.5%.
Meanwhile, the company’s EPS is expected to decline 19.8% for the current year. Nonetheless, Beazer Homes is expected to show a stellar performance in fiscal 2018 with its bottom line expected to grow 53.5%, comfortably outpacing the industry’s expected 13.5% growth rate.
Arguably, nothing is more important than earnings growth as surging profit levels are often an indication of strong prospects (and stock price gains) for the company in question.
Reasonably Valued Stock: Because of homebuilders’ asset-driven nature, it makes sense to value them based on price-to-book (P/B) ratio. The company currently has a trailing 12-month P/B ratio of 0.91. This is quite cheap compared with the industry as well as the market at large, as the current P/B for the industry and S&P 500 is 1.70 and 3.67, respectively. Its lower-than-market positioning indicates that there is room for an upside in the quarters ahead.
Solid Industry Fundamental: The latest July housing data indeed reflects soft housing momentum for the time being. Nevertheless, the 2017 outlook for homebuilding seems to be solid given strong economic growth and labor market. The U.S. economy grew faster-than-anticipated in the second quarter (fastest pace in more than two years) and showed a significant jump from the first quarter’s lackluster 1.2% growth. The economy grew at an annual rate of 3% in the April-June period, the Commerce Department said in its second estimate on Aug 30. Along with this, solid homebuilders’ confidence (64 in September) raises optimism about the entire construction sector.
The housing/homebuilding industry has been riding high on steady job and wage growth, historically low mortgage rates and rapidly increasing household formation. The positive momentum is evident from the robust Zacks Industry Rank (Top 22% out of 256 industries).
Consequently, homebuilding companies like Beazer Homes, KB Home (KBH - Free Report) , D.R. Horton, Inc. (DHI - Free Report) , PulteGroup Inc. (PHM - Free Report) and others are expected to gain from such positive industry fundamentals and higher demand.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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