Beazer Homes USA (BZH) Margin Compression To 0.4% Tests Bullish Growth Narratives

Beazer Homes USA (BZH) opened fiscal Q1 2026 with revenue of US$363.5 million and a basic EPS loss of US$1.13, alongside trailing twelve month EPS of US$0.34. Over recent quarters, revenue has ranged from US$468.9 million to US$806.2 million while basic EPS has moved between a profit of US$1.72 and a loss of US$0.01. This highlights how sensitive earnings have been to shifts in profitability and raises questions for investors about whether margins can stabilize after this latest quarterly loss, as well as what that could mean for the durability of any future earnings recovery.

See our full analysis for Beazer Homes USA.

With the headline numbers set, the next step is to line these results up against the widely followed narratives around Beazer Homes to see which views hold up and which might need updating.

Curious how numbers become stories that shape markets? Explore Community Narratives

Net margin compressed to 0.4% over last year

• Over the trailing 12 months, Beazer generated US$2.27b of revenue and US$9.9 million of net income, which works out to a 0.4% net margin compared with 5% a year earlier.
• What stands out for a more bullish take is how that thin 0.4% margin sits next to forecasts for earnings to grow 86.35% per year, which heavily depends on:
  • Revenue that is expected to rise 12.3% annually, off a trailing base of US$2.27b, after a Q1 2026 quarter that came in at US$363.5 million.
  • The fact that trailing earnings include a US$13.0 million one off loss and trailing EPS of US$0.34, so any bullish case has to separate recurring profitability from that single hit.

To see how this margin story fits into the longer term growth and valuation work, take a look at the broader community views on Beazer. 📊 Read the full Beazer Homes USA Consensus Narrative.

Multi quarter swing from US$140.2m profit to US$9.9m

• On a trailing basis, net income moved from US$140.2 million on US$2.33b of revenue in the period ending Q4 2024 to US$9.9 million on US$2.27b by Q1 2026, even though quarterly net income ranged from a US$52.1 million profit to a US$32.6 million loss across the last six reported quarters.
• Bears who focus on earnings volatility will likely point to this pattern, because:
  • Quarterly EPS has swung between a profit of US$1.72 and a loss of US$1.13, with Q1 2026 at a US$1.13 loss despite the trailing period still being modestly profitable.
  • Over five years, earnings are reported to have declined 7.8% per year, while the most recent trailing net margin of 0.4% is far below the prior 5%, which aligns with a cautious stance on how durable any recovery might be.

Rich 62.6x P/E versus 0.4% margin

• The shares trade on a P/E of 62.6x against a trailing net margin of 0.4% and industry and peer P/E levels of 11.8x and 12.2x. The current price of US$21.57 is well below the indicated DCF fair value of US$102.80 and an analyst target of US$26.00.
• For investors leaning more bullish, this mix of high P/E and low margin next to a higher DCF fair value creates a tension, because:
  • The high P/E suggests the market is valuing current earnings more highly than industry averages even though trailing net income of US$9.9 million on US$2.27b of revenue is relatively slim.
  • At the same time, the DCF fair value of US$102.80 and a US$26.00 target against the US$21.57 share price line up with the growth forecasts, so the key question is whether future earnings can support both the valuation signals and the balance sheet, given that debt is currently not well covered by operating cash flow.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Beazer Homes USA's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

Beazer's slim 0.4% net margin, large swing in net income and EPS, and debt that is not well covered by operating cash flow raise concerns about its financial resilience.

If you would rather focus on companies with sturdier finances and less earnings volatility, check out our solid balance sheet and fundamentals stocks screener (391 results) today to find businesses built on stronger balance sheets and cash coverage.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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