Shareholders of Beazer Homes USA, Inc. (NYSE:BZH) will be pleased this week, given that the stock price is up 11% to US$15.62 following its latest full-year results. The results look positive overall; while revenues of US$2.1b were in line with analyst predictions, losses were 5.3% smaller than expected, with Beazer Homes USA losing US$2.60 per share. This is an important time for investors, as they can track a company’s performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see analysts’ latest post-earnings forecasts for next year.
After the latest results, the dual analysts covering Beazer Homes USA are now predicting revenues of US$2.21b in 2020. If met, this would reflect a satisfactory 5.7% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Beazer Homes USA forecast to report a profit of US$1.82 per share. Before this earnings report, analysts had been forecasting revenues of US$2.20b and earnings per share (EPS) of US$1.79 in 2020. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.
The consensus price target rose 28% to US$17.00 despite there being no meaningful change to earnings estimates. It could be that analysts are reflecting the predictability of Beazer Homes USA’s earnings by assigning a price premium.
Further, we can compare these estimates to past performance, and see how Beazer Homes USA forecasts compare to the wider market’s forecast performance. We would highlight that Beazer Homes USA’s revenue growth is expected to slow, with forecast 5.7% increase next year well below the historical 7.6%p.a. growth over the last five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.2% next year. So it’s pretty clear that, while Beazer Homes USA’s revenue growth is expected to slow, it’s expected to grow roughly in line with the industry.
The Bottom Line
The most obvious conclusion from these results is that there’s been no major change in the business’ prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.
It might also be worth considering whether Beazer Homes USA’s debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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