Beazer Homes USA (BZH:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Beazer Homes USA(BZH:NYS)

Consumer Cyclical:Residential Construction

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$10.20 (USD) 14/11/2018

Weighted Valuation
$10.00 (USD)

Overall Rating
Fairly valued to slightly Overvalued by 2.0%

Valuation Models Analyst Consensus: $10.00 (USD)
(in order of importance)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (BZH:NYS USD)

Price 10.20
Range 10.15 – 11.60
52 week 8.27 – 21.96
Open 11.02
Vol / Avg. 1.51M/849192
Mkt cap 341.92M
P/E 0.00
Div/yield 0.00/0.00
EPS -1.41
Shares 33.52M
Beta 2.48

Company Description

Beazer Homes USA Inc is an American construction company that focuses on residential construction. The company specializes in single-family housing and multi-unit building construction in over 13 states and over 22 metro markets. Beazer Homes builds homes and communities that target first-time, move-up, and luxury homebuyers with an average selling price of roughly $300,000. From a geographic perspective, home sales in the western and eastern United States have been the leading sources of revenue for the company. Key metro areas include Atlanta, Las Vegas, Los Angeles, Orlando, and Tampa. The company also focuses on land purchasing and development to support future construction efforts as well as mortgage services for its homebuyers.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for BZH:NYS

Using a discounted cash flow model we generated an intrinsic value of $5.95 (USD) for BZH:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

BZH:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $5.95 1% 5% 1% 5%
WACC (or Ke) 5.04 $17.01 ($1.45)
Terminal Growth Rate 0.00 ($0.96) $16.28
Tax Rate 0.27 $11.04 $0.86
Cash Flow 169,312,207 $2.24 $9.66
Capital Expenditures 658,200 $5.96 $5.94
Long Term Debt 1,331,878,000 $7.94 $3.96

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $8.64 (USD) for BZH:NYS. We also generated a valuation of $25.73 (USD) using other metrics and comparables.
The comparable companies were Century Communities (CCS:NYS), LGI Homes (LGIH:NAS), M/I Homes (MHO:NYS), Skyline Champion (SKY:NYS) and William Lyon Homes (WLH:NYS).

Company BZH:NYS End Date Value
Earnings/Share ($1.41) (USD)
Book Value/Share $17.38 (USD)
Sales/Share $61.81 (USD)
Cash Flow/Share $0.07 (USD)
EBITDA/Share $2.97 (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) -10.9
$26.16 (USD) -33.3
$31.31 (USD) -73.2
($37.43) (USD) -91.3
$0.00 (USD) 12.2
BZH:NYS Ratios Used Average Values CCS:NYS LGIH:NAS MHO:NYS SKY:NYS WLH:NYS
0.00 PE Ratio 11.12 7.74 7.34 7.82 25.07 7.62
0.51 PB Ratio 1.51 0.81 1.71 0.81 3.56 0.64
0.14 PS Ratio 0.51 0.33 0.72 0.33 0.88 0.27
122.51 PCF Ratio 12.16 0.00 0.00 0.00 19.19 5.13
16.51 EV to EBITDA 37.29 14.19 7.43 8.61 144.30 11.93

Multiples

Using a multiples approach we generated a valuation of  $24.12 (USD) for BZH:NYS

Company BZH:NYS End Date Value
Earnings/Share ($1.41) (USD)
Book Value/Share $17.38 (USD)
Sales/Share $61.81 (USD)
Cash Flow/Share $0.07 (USD)
EBITDA/Share $2.97 (USD)
Price Based on Comps Adjustment Factor
$0.00 (USD) 0
$13.39 (USD) 0
$16.05 (USD) 0
$0.40 (USD) 0
$66.63 (USD) 0
Ratios Ratio Average
PE Ratio 10.63
PB Ratio 0.77
PS Ratio 0.26
PCF Ratio 5.59
EV to EBITDA 22.46

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  BZH:NYS for the last 10 years was  0.78

We ran the Adjusted Book Value for  BZH:NYS and generated a book value of  $19.21 (USD)
By multiplying these we get an adjusted valuation of  $14.99 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for BZH:NYS. The 1 analysts have a concensus valuation for BZH:NYS for 2019 of $10.00 (USD).

BZH:NYS Beazer Homes USA

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
0 1 0 3.0000 Hold 2018-11-13

Current Price: 10.2 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 1.26 -0.76 -0.50
# EPS Analysts 2 1 1
Mean Revenue 2,089.00 1,681.00 1,652.00
# Revenue Analysts 2 1 1
Mean Target Price 10.00
Mean Cash Flow 4.15
Mean EBITDA 214.10
Mean Net Income 77.00
Mean Debt Outstanding 805.50
Mean Tax Rate
Mean Growth Rate
Mean Capital Expenditure 16.00

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

Notice to User


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