Market Overview

3 More Homebuilder Stocks To Watch Ahead Of Earnings

3 More Homebuilder Stocks To Watch Ahead Of Earnings

The earnings crunch continues, and leading homebuilders Beazer Homes USA (NYSE: BZH), Ryland Group (NYSE: RYL) and Standard Pacific (NYSE: SPF) will be taking their turns in the earnings spotlight Thursday, July 31.

D.R. Horton (NYSE: DHI), Meritage Homes (NYSE: MTH) and PulteGroup (NYSE: PHM) posted mixed results last Thursday, just as the U.S. Department of Commerce announced that new-home sales plunged in June. That made investors nervous about the housing recovery.

See also: June Housing Starts' 9% Drop Puts Housing Stocks On Shakey Footing

Beazer Homes USA

Analysts on average predict that this Atlanta-based builder will report that its revenue for the fiscal third quarter rose more than 14 percent year-over-year to $360.13 million. Earnings of $0.22 per share are also in the consensus forecast. That would compare to a reported net loss of $0.23 per share in the comparable period of last year.

The consensus earnings per share (EPS) estimate dropped two cents on last week's news, and note that estimates range widely from $0.06 to $0.44. In the previous quarter, the net loss was much deeper than expected, but earnings results exceeded analysts' estimates by 16 percent or more in the three periods before that.

During the three months that ended in June, Beazer appointed a new treasurer and reaffirmed its fiscal year net income outlook. It has a market cap of less than $500 million. Note that its return on equity is in the red, and short interest is more than 24 percent of the float, as of the most recent settlement date.

Shares have traded mostly between $18 and $20 since March. The share price is about 24 percent lower than the year-to-date high. The stock has underperformed not only the broader markets over the past six months, but also the other homebuilders featured here as well.

Ryland Group

Per-share earnings from this California-based builder are expected to have tumbled more than 83 percent year-over-year to $0.68. However, second-quarter revenue will total $618.51 million, which would be a gain of more than 25 percent, if analysts are correct.

Analysts overestimated EPS in the first quarter by three cents, or more than six percent. That miss ended a streak of at least three periods of earnings beats. The consensus estimate for the most recent quarter has dropped by two cents in the past 60 days.

During its second quarter, Ryland opened new communities in Maryland, Pennsylvania and Florida. It has a market cap of less than $2 billion and a dividend yield near 0.3 percent. The price-to-earnings (P/E) ratio is less than the industry average, but short interest is more than 14 percent of the float.

The share price is down marginally in the past 90 days and below both the 50-day and 200-day moving averages. It is more than 13 percent lower since the beginning of the year. The stock has underperformed competitors KB Home and Standard Pacific over the past six months, as well as the S&P 500.

See also: Markets Mostly Higher As Earnings Season Continues To Impress

Standard Pacific

Per-share earnings of $0.13 and revenue of $563.35 million are anticipated from this Irvine, California-based builder when it shares its second quarter results Thursday morning. That would be up from $0.11 per share and $438.68 million in sales in the same period of last year.

Here, the consensus EPS is the same as it was 90 days ago, and individual estimates range from $0.11 to $0.15. The company missed expectations in the previous quarter by a penny per share, but earnings handily topped analysts' consensus estimates in the three periods before that.

During the three months that ended in June, Standard Pacific acquired the homebuilding operations of Streetman Homes. Standard Pacific has a market cap of more than $2 billion and an operating margin that is greater than the industry average. And its P/E ratio is less than the industry average.

The share price has retreated more than nine percent since the beginning of July, dropping below the 200-day and 50-day moving averages. It is down more than 12 percent year-to-date. The stock has not only underperformed the broader markets over the past six months, but larger rivals Lennar and PulteGroup, too.

At the time of this writing, the author had no position in the mentioned equities.

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