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Beazer Homes (BZH) Updates Q4 Views, Weather Woes Continue


Atlanta-based homebuilder Beazer Homes USA, Inc. BZH gave its views on fourth-quarter fiscal 2017 results after taking into consideration the impact of recent hurricanes, Harvey and Irma. Shares of Beazer Homes fell 1.1% on Sep 13, finally closing the session at $15.02.

The company, which generates most of its revenues as well as earnings from its core business of single family home construction, continues to expect an improvement in adjusted EBITDA in the quarter from the prior year.

However, 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 the storm-related impacts. That said, the company anticipates the impact to be temporary and remains confident about the substantial productivity gains in fiscal 2018.

Q3 Recall

The homebuilder reported stellar third-quarter fiscal 2017 results with both earnings and revenues beating the Zacks Consensus Estimate by 35.3% and 1.8%, respectively. The company generated 4.1% year-over-year revenue growth and a significant increase in profitability, driven by higher gross margins (up 60 basis points) and better overhead leverage.

Sales per community per month were 3.4 in the quarter, depicting 14.2% year over year increase. Homebuilding revenues were up 4.7% banking on a 1.7% increase in home closings and a 3.0% increase in average selling price. Adjusted EBITDA increased 16% and earnings per share grew 22% year over year.

Share Price Performance & Estimate Revisions

Shares of the company increased 16.6% compared with the Zacks Home Builders Industry’s 4.1% gain in the last three months. Earnings estimates for Beazer Homes have exhibited an uptrend, reflecting optimism in the stock’s prospects. The Zacks Consensus Estimate for earnings in the current-quarter and year has moved up 1.8% and 7.6%, respectively, over the last 60 days. Also, estimates for fiscal 2018 have climbed 6% over the same time frame.

Zacks Rank & Key Picks

Beazer Homes holds a Zacks Rank #2 (Buy). Other top-ranked stocks in the industry are NVR, Inc. NVR, M/I Homes, Inc. MHO and Meritage Homes Corporation MTH. While NVR sports a Zacks Rank #1 (Strong Buy), M/I Homes and Meritage Homes carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVR’s earnings are expected to grow 33.9% in 2017, while that of M/I Homes by 37.1%.

Meritage Homes surpassed earnings estimates in each of the trailing four quarters, the average beat being 17.2%.

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