BEAZER HOMES USA INC

BEAZER HOMES USA INC Annual Report - Cleaned & Finalized
Your Friendly Guide to Their Yearly Performance

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1. What Does Beazer Do, and How Was This Year?

Beazer builds single-family homes, primarily for first-time and move-up buyers in fast-growing states like Texas, Florida, and Arizona. This year, they sold 5% more homes than last year, driven by demand in affordable suburbs. However, performance varied sharply by region:

• East Region (Florida, Carolinas): Revenue jumped 19% thanks to strong pricing and demand.
• Southeast (Georgia, Alabama): Revenue dropped 15.5% due to fewer buyers and lower prices.

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2. Financial Snapshot: Growth vs. Profit

• Revenue: Up 8% to $2.2 billion (more homes sold!).
• Profit: Fell 10% to $150 million due to rising material/labor costs.
• Home Prices: Mixed results—East prices rose 7.1%, while West prices dipped 1.3% (Arizona/California buyers chose cheaper options).

Takeaway: They’re growing sales but struggling to protect profits.

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3. Wins & Challenges

Wins ✅

• Expanded into hot markets like Nashville and Raleigh.
• East Region dominance: Sold 11% more homes there by focusing on quick-build “spec homes.”
• Reduced debt by 15% (now at $1.1 billion).

Challenges ❌

• Southeast slump: 15% fewer homes sold.
• Supply chain delays (e.g., cabinets, appliances).
• Rising mortgage rates scared off budget-conscious buyers.

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4. Financial Health Check

• Cash: $350 million in reserves (plenty for surprises).
• Debt: Down significantly, with strong cash flow to cover bills.
  Verdict: Healthy and low-risk. No red flags here.

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5. Risks to Watch

• Mortgage rates: Further hikes could hurt affordability.
• Material costs: Lumber, concrete, and labor remain expensive.
• Regional dependence: Over-reliance on the booming East could backfire if that market cools.

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6. How They Stack Up Against Competitors

Beazer is smaller than giants like Lennar or D.R. Horton but growing faster in the affordable home segment. Their profit margins are thinner, though—big rivals can absorb costs better.

Bright spot: Beazer’s 19% revenue growth in the East outpaced many competitors in that region.

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7. Leadership & Strategy

• New CEO Allison House took over, prioritizing “smart growth”: fewer risky projects, stricter cost control.
• Investing in tech to speed up home design/construction (already helped in the East!).

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8. What’s Next?

• Opening 50 new communities in 2024, mostly in the South.
• Doubling down on the East after this year’s success.
• Expect 3-5% revenue growth next year—steady but not explosive.

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9. Market Trends Impacting Beazer

• Housing shortage: Still a major issue (good for builders long-term).
• Millennial demand: A surge of 30-somethings entering the market, especially in the East.
• Green building rules: New energy efficiency laws may slightly raise costs.

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Should You Invest? Key Takeaways

👍 Pros

• Strong demand in affordable markets.
• Reduced debt and healthy cash reserves.
• Leadership focused on efficiency and tech.

👎 Cons

• Squeezed profit margins.
• Southeast region struggles.
• Vulnerable to interest rate hikes.

Final Verdict:
Beazer is a slow-and-steady play for patient investors. If you believe mortgage rates will stabilize or drop, and trust their East-focused strategy, it’s worth considering. Avoid if you’re seeking rapid growth or dislike regional market risks.

Watch closely in 2024:

• Mortgage rate trends
• Profit margin recovery
• Southeast region turnaround efforts

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Let’s chat if you need help weighing these factors against your goals! 🏠📈