BZH

Beazer Homes ($BZH) Executives Aggressively Buy Shares After 50% Stock Plunge - Analysts See 77% Upside Potential

05/12/2025 20:56

Beazer Homes USA ($BZH) Director John Kelley III purchased 10,000 shares at an average price of $21.50, investing approximately $215,000 on May 9th. This purchase signals insider confidence in the company's long-term value despite the challenging conditions in the U.S. housing construction market. Kelley's purchase continues a trend of executive share buying that began in early 2025. In February, Chairman Allan Merrill acquired 5,000 shares, Director Lloyd Emerson Johnson purchased a total of 45,000 shares (including duplicate filings), Director Norma Provencio bought 5,000 shares, and Director Danny Shepherd acquired 4,125 shares, constituting a significant cluster buy. Additionally, SVPs Michael Dunn and David Goldberg purchased 449 and 443 shares, respectively. These insider purchases have been concentrated during a period of significant decline in $BZH's stock price. Beazer Homes' shares fell from around $35 in late November 2024 to below $18 in mid-April 2025, representing a decline of nearly 50%. The stock experienced a particularly steep drop of almost 20% on January 31st, coinciding with the company's quarterly earnings release. Indeed, in late January 2025, Beazer Homes reported adjusted earnings of 10 cents per share for the quarter ended December 31 (Q1 2025), a significant decrease from 70 cents in the same period the previous year. However, revenue increased by 21.2% to $468.95 million, exceeding analyst expectations. In its most recent earnings report released in early May, Beazer Homes reported Q2 2025 (ended March 31) earnings of 42 cents per share, substantially lower than the $1.26 reported in the same quarter last year but surpassing analyst expectations by 61.54%. Revenue increased by 4.4% year-over-year to $565.34 million, and total home closings reached 1,079, exceeding the market expectation of 1,050. In this context, the continued share purchases by executives suggest a positive long-term outlook for Beazer Homes despite short-term challenges in the housing market. This is particularly notable as the U.S. market has been struggling since early 2025 due to concerns about President Trump's tariff policies and their economic impact, with consumer confidence falling to an eight-month low. By mid-March, consumer inflation expectations had reached a 30-year high, averaging 3.9% over the next five years. Headquartered in Atlanta, Beazer Homes is a residential construction company founded in 1985, specializing in designing and selling single-family and multi-family homes across the United States. The company operates under several brand names, including Beazer Homes and Gatherings, and employs approximately 1,158 individuals. Financially, Beazer reports annual revenue (TTM) of $2.44 billion with a profit margin of 3.91%, earnings per share (TTM) of $3.09, and a P/E ratio of 6.69. This indicates a relatively low valuation compared to industry averages. Analysts maintain a positive outlook on Beazer Homes, with a consensus target price of $38 per share, suggesting an upside potential of approximately 77% from the current price of $21.44 (as of May 9). However, a Zacks Rank of #4 (Sell) indicates potential underperformance in the short term. Finally, Beazer Homes is actively pursuing strategic initiatives, including accelerating its share repurchase program and focusing on acquiring undervalued land as a hedge against inflation. These efforts, combined with the consistent buying signals from insiders, may represent noteworthy points for long-term value investors despite short-term market pressures.

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