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Comstock Holding Companies, Inc. Message Board

  • fiberbull fiberbull May 3, 2013 8:08 AM Flag

    Breakeven Q1?

    With management expecting $10 million to $12 million in homebuilding sales in Q1, which is greater than all the homebuilding sales in 2012, will CHCI breakeven in Q1? Management is projecting a return to profitability in 2013, which is huge by itself, but the quesiton is what level of homebuilding sales does CHCI need to get to profitability? There basic SGA should stay flat at around 2 million per quarter, so my guess is that the company can just about breakeven at $12 million in revenue. A breakeven Q1 or a better idea of when CHCI will breakeven this year (Q2?), would send the stock soaring.

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    • Q1 will still incurr some loses. SGA will be $2.50 million not $2.00. Interest, tax etc will be $0.50 million. These two will cost $3.00 million. If Q1 HB revenue is $11.00 million (mid point) and gm at 13% - 15%, gp will be $1.43 - $1.65. They will report around $1.50 million loss for Q1, which is still a good numbers.

    • I don't think break even is the key for the stock price.

      BZH lost -0.67/share in Q1, 10 cents worse than expected. But stock gapped up and now at 19.67 because CEO said that they will turn into profitability in 2013 and backlog is at 2,110 homes, up 30% from last year.
      BZH started its run ten days before earning release.

      For CHCI case, if the revenue can grow 300% or more compared with 2012 same period and maintains the 2013 profitability projection, stock wil fly as well.

      Sentiment: Strong Buy

    • fiberbull,
      If Comstock breaks even in Q1, CHCI will go up over $5 right away. As much as I would love to see the Q1 break even, I doubt it will happen. Let's not dream something that is not likely.

      On the Mar 26 evening they said "As of the date of this press release, the Company has settled 12 homes in the first quarter of 2013 realizing $5.4 million in revenue." Taking Good Friday and Easter out, the company had Mar 27, and Mar 28 to settle 6 more homes to reach the goal. I doubt it did. Even if the company did settle 6 more homes, it will be difficult to have revenue over $10 million because the average price of those six home sold in last 2 days of March has to be close to $800,000 which is highly unlikely. Even if the revenue was $10 million, a break even? Then the gross is probably less than $2 million. SGA expenses probably is little bit more than the last Q because of increased agent fees.

      Q2 break even? Quite possible! However, there too is one thing to keep in mind. The stock based compensation expense will be quite big pushing SGA up significantly.

      We are not into this for a break even in Q1 or Q2. Most of us are in here because of the guidence of 2013 profit, and nexe several years of printing money.

      5 years ago, I bought 20K shares at less than 20 cents each. Then buy and sell buy and sell but never leave completely.

      Peace,

      icha

      • 1 Reply to sleepy.ichabod
      • Thanks for the reply, I had the same questions you have.

        "On the Mar 26 evening they said "As of the date of this press release, the Company has settled 12 homes in the first quarter of 2013 realizing $5.4 million in revenue." Taking Good Friday and Easter out, the company had Mar 27, and Mar 28 to settle 6 more homes to reach the goal. I doubt it did."

        However, the fact of the matter is that the CEO must have known all of this when he announced the earnings in the press release. He can't be so stupid to project $10 million to $12 million in revenue that late in the quarter, if it wasn't possible. And this company is not promotional at all. In fact, they never announce anything or promote themselves at all on wall street. So, my guess is that the CEO knew what he was talking about and they will hit $10 million to $12 million. I guess we will see. But, I bet they hit $12 million.

        Also, I don't include non-cash stock compensation expense in my breakeven analysis because nobody on Wall Street does anymore, unless you are a real accounting fanatic. So I'm talking about adjusted earnings per share, excluding non-cash stock compensation expense, which is the standard metric used.

 
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