Beazer Homes USA, Inc. BZH is feeling the changes in the housing market in 2025. This Zacks Rank #5 (Strong Sell) is expected to see falling earnings this year.

Beazer Homes is a national homebuilder with a market cap of $674.9 million. It builds homes in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, North and South Carolina, Tennessee, Texas, and Virginia.

Beazer Homes Accelerates Share Repurchase as the Shares Sink in 2025

On Feb 6, 2025, Beazer Homes announced it was accelerating its share repurchases due to the 2025 “share price dislocation.”

It’s share repurchase program, as of Feb 6, 2025, had approximately $24.8 million remaining.

The company reported fiscal first quarter 2025 earnings on Jan 30, 2025, and the stock sold off on the news.

Since that sell-off, Beazer Homes repurchased approximately $4.1 million of its shares at the weighted average price of $21.86.

"We believe accelerating the pace of our share repurchases makes a lot of sense. The ability to buy back our shares at a significant discount to book value represents a compelling investment opportunity and we plan to act on it,” said Allan P. Merrill, Chairman and CEO.

Here’s what the stock chart looks like, compared to the S&P 500, year-to-date.

Image Source: Zacks Investment Research

Given the acceleration of its share repurchase program, Beazer also announced that debt reduction, which it is committed to, would moderate in the near term.

Beazer Homes Misses on Earnings in the First Quarter of 2025

On Jan 30, 2025, Beazer Homes reported its fiscal first quarter 2025 results and missed on the Zacks Consensus by $0.21. Earnings were $0.10 compared to the Zacks Consensus of $0.31.

That’s an earnings miss of 67.7%.

It’s also a rare miss for Beazer as it only has 2 earnings misses, including this one, in the last 5 years.

Revenue was up 20.9% to $460.4 million year-over-year driven by a 22.1% increase in home closings to 907 homes, partially offset by a 1% decrease in average sales price to $507,600.

The increase in closings was mainly due to higher volume of spec homes selling and closing during the quarter as well as improved construction cycle times.

Gross margins are a key metric for the homebuilders, even more than revenue. Adjusted gross margin was 18.2% in the quarter, down from 22.9% the prior year primarily due to an increase in price concessions and closing cost incentives, an increased share of spec home closings which generally have lower margins than “to be built” homes, and changes in product and community mix.

Beazer called the market a “challenging new home sales environment.”

Analysts Are Bearish on Beazer Homes

Given the tough new home market, the analysts have gotten bearish on fiscal 2025.

1 estimate has been cut in the last 30 days, and 2 in the last 60 days, for the full year. The Zacks Consensus Estimate has fallen to $3.49 from $4.44 in that period.

That’s a decline of 23% as Beazer Homes made $4.53 in fiscal 2024.

Here’s what it looks like on the 5-year price and consensus chart.

Image Source: Zacks Investment Research

Beazer Homes Shares Are Cheap

Beazer Homes shares continue to be weak in 2025 on fears about the housing market and the impact of tariffs. They are down 27.6% over the last 6 months.

Beazer Homes is now dirt cheap, with a forward price-to-earnings (P/E) ratio of 6.2. A P/E ratio under 10 usually indicates a company is extremely cheap.

It also sports a PEG ratio of 0.3. A PEG under 1.0 usually indicates a company has both value and growth.

Beazer stepped in to buy its shares last month. But investors might want to wait for a turnaround in the earnings estimates before venturing in.

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This article originally published on Zacks Investment Research (zacks.com).

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