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Factors Setting the Tone for Beazer Homes' (BZH) Q1 Earnings

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Beazer Homes USA, Inc. (BZH - Free Report) is scheduled to release first-quarter fiscal 2021 results on Oct 28, after the closing bell.

In the last reported quarter, the company’s earnings and revenues beat the Zacks Consensus Estimate by 46.5% and 10.4%, respectively. However, this homebuilder’s fiscal fourth-quarter earnings and revenues declined 8.6% and 12.1%, respectively.

Markedly, its earnings surpassed the consensus mark in three of the last four quarters.

Q1 Estimates

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share is pegged at 26 cents, suggesting an increase of 188.9% from the prior-year quarter reported figure. Moreover, earnings estimates for the quarter have remained stable in the past 30 days. The consensus mark for fiscal first-quarter revenues stands at $420.4 million, indicating growth of 0.6% from the year-ago reported figure.

Beazer Homes USA, Inc. Price and EPS Surprise

Beazer Homes USA, Inc. Price and EPS Surprise

Beazer Homes USA, Inc. price-eps-surprise | Beazer Homes USA, Inc. Quote

Factors to Note

The company’s fiscal first-quarter results are likely to reflect the resilient housing market fundamentals prevalent in the United States. The improved sales trend in the country is reflected in the solid monthly housing sales data. Notably, existing-home sales grew in December 2020, with home sales in 2020 reaching their highest level since 2006. Existing home sales registered notable growth in October and December but dropped in November 2020. Apart from low mortgage rate environment, the rising trend of work from home owing to the coronavirus outbreak is prompting many families to own a house, thereby boosting demand.

The Zacks Consensus Estimate for homes closed is pegged at 1,104 units that indicates a 0.7% decline from the year-ago period reported figure and 36.4% decrease sequentially. Meanwhile, the consensus mark for average selling price or ASP of homes closed is $381,000, which implies 1.6% year-over-year improvement.

However, lower average selling price to address affordability concern might have weighed on the to-be-reported quarter’s performance. Also, higher land, labor and material costs may get reflected in fiscal first-quarter results. Nonetheless, the company’s focus on higher-margin homes and maximizing overhead leverage is likely to have positively impacted operating margin.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Beazer Homes this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Its Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Beazer Homes currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Worth a Look

Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their upcoming releases.

Century Communities, Inc. (CCS - Free Report) has an Earnings ESP of +2.09% and a Zacks Rank #1.

M.D.C. Holdings, Inc. (MDC - Free Report) has an Earnings ESP of +2.22% and a Zacks Rank #2.

Martin Marietta Materials, Inc. (MLM - Free Report) has an Earnings ESP of +0.25% and a Zacks Rank #3.

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