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 annual 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. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what analysts are forecasting for next year.
Taking into account the latest results, the most recent consensus for Beazer Homes USA from two analysts is for revenues of US$2.21b in 2020, which is a credible 5.7% increase on its sales over the past 12 months. Beazer Homes USA is also expected to turn profitable, with earnings 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. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
With analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 28% to US$17.00. It looks as though analysts previously had some doubts over whether the business would live up to their expectations.
Further, we can compare these estimates to past performance, and see how Beazer Homes USA forecasts compare to the wider market's forecast performance. It's pretty clear that analysts expect Beazer Homes USA's revenue growth will slow down substantially, with revenues next year expected to grow 5.7%, compared to a historical growth rate of 7.6% over the past five years. Compare this to the other companies in this market with analyst coverage, which are forecast to grow their revenue at 5.2% per year. Factoring in the forecast slowdown in growth, it looks like analysts are expecting Beazer Homes USA to grow at about the same rate as the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
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.
You can also view our analysis of Beazer Homes USA's balance sheet, and whether we think Beazer Homes USA is carrying too much debt, for free on our platform here.
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