Beazer Homes USA, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

The investors in Beazer Homes USA, Inc.'s (NYSE:BZH) will be rubbing their hands together with glee today, after the share price leapt 22% to US$7.00 in the week following its quarterly results. The result was positive overall - although revenues of US$489m were in line with what the analyst predicted, Beazer Homes USA surprised by delivering a statutory profit of US$0.35 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.

View our latest analysis for Beazer Homes USA

Taking into account the latest results, the current consensus, from the sole analyst covering Beazer Homes USA, is for revenues of US$1.92b in 2020, which would reflect a chunky 12% reduction in Beazer Homes USA's sales over the past 12 months. Statutory earnings per share are expected to crater 24% to US$0.70 in the same period. Before this earnings report, the analyst had been forecasting revenues of US$1.89b and earnings per share (EPS) of US$0.65 in 2020. So the consensus seems to have become somewhat more optimistic on Beazer Homes USA's earnings potential following these results.

The average the analyst price target fell 50% to US$8.00, suggesting thatthe analyst has other concerns, and the improved earnings per share outlook was not enough to allay them.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast revenue decline of 12%, a significant reduction from annual growth of 6.5% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 1.6% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Beazer Homes USA is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Beazer Homes USA's earnings potential next year. Fortunately, the analyst also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Beazer Homes USA's revenues are expected to perform worse than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Beazer Homes USA's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Beazer Homes USA going out as far as 2021, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with Beazer Homes USA (including 1 which is a bit unpleasant) .

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.