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Beazer Homes (BZH) to Report Q1 Earnings: What to Expect

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Beazer Homes USA, Inc. (BZH - Free Report) is slated to report first-quarter fiscal 2022 results on Jan 27, after market close.

In the last reported quarter, its earnings topped the Zacks Consensus Estimate and increased impressively on a year-over-year basis. The upside was driven by strong operational execution and continued strength of the housing market. The company's earnings topped analysts’ expectations in each of the trailing seven quarters.

Total revenues beat the consensus mark by 1.6% but decreased almost 14% year over year due to reduced home closings owing to affordability and supply chain challenges.

Trend in Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for earnings has been stable at 63 cents per share in the past 60 days. This indicates a solid increase of 57.5% from 40 cents recorded a year ago. The consensus estimate for revenues is pegged at $452.7 million, suggesting a rise of 5.6% from the prior-year quarter.

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

Beazer Homes is likely to have generated slightly higher revenues and strong earnings for the fiscal first quarter backed by solid demand trends resulting from resilient housing market fundamentals. Also, strong operational execution is contributing to the bliss.

Supply chain issues have been grappling the overall industry. During the fiscal 2021 earnings call, the company noted that it pulled forward the cutoff dates for home starts owing to delayed cycle times. Also, the imbalance in the demand and supply of homes, higher material costs as well as labor constraints prompted builders to increase prices. Affordability risks are likely to have put pressure on home orders and backlog, thanks to the rising home prices and potential for higher mortgage rates.

BZH expects fiscal first-quarter closings within 1,000-1,050 units. ASP is likely to be above $430,000. Gross margin is anticipated to be up 125-150 basis points. EBITDA is anticipated above $50 million and earnings are likely to grow 50% year over year.

The Zacks Consensus Estimate for fiscal first-quarter homebuilding revenues is pegged at $446 million, indicating 26.3% year-over-year growth. Yet, the same for home closings is 1,031 units, suggesting a 7.5% decline from a year ago. The average selling price or ASP is pegged at $438,000, implying a significant increase from $381,000 reported a year ago.

The consensus mark for net new orders is pegged at 1,009 homes, pointing to a decline of 30% from the prior year’s 1,442. The consensus estimate for quarter-ending backlog is 2,765 homes, which indicates a 2.5% year-over-year fall. The same for ASP in backlog is $463,000, which suggests a rise from the prior-year figure of $410,000.

The Zacks Consensus Estimate for homebuilding gross profit is pegged at $87 million, which implies 16% year-over-year growth.

What Our Model Indicates

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 odds of an earnings beat. Unfortunately, this is not the case here.

Earnings ESP: The Earnings ESP for the company 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 has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

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 respective quarters to be reported.

D.R. Horton, Inc.  (DHI - Free Report) has an Earnings ESP of +2.72% and a Zacks Rank #2.

DHI’s earnings topped the consensus mark in all the last four quarters, with the average being 14.1%.

PulteGroup, Inc. (PHM - Free Report) has an Earnings ESP of +1.88% and a Zacks Rank #2.

PHM’s earnings topped the consensus mark in three of the last four quarters and missed once, with the average surprise being 3.8%.

Boise Cascade Company (BCC - Free Report) has an Earnings ESP of +9.09% and a Zacks Rank #1.

BCC’s earnings topped the consensus mark in all the last four quarters, with the average being 45.5%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.