Homebuilder Tri Pointe's Q2 revenue falls on weak home deliveries

Overview

• Tri Pointe Q2 home sales revenue falls 22% yr/yr to $879.8 mln

• Adjusted EPS beats analyst expectations, reflecting effective cost management

• Co repurchased $100 mln in stock, increased credit facility to $850 mln

Outlook

• Tri Pointe expects Q3 home deliveries between 1,000 and 1,100 homes

• Company anticipates Q3 average sales price between $675,000 and $685,000

• Tri Pointe sees Q3 gross margin percentage between 20.0% and 21.0%

• Company expects full-year home deliveries between 4,800 and 5,200 homes

Result Drivers

• REVENUE DECLINE - Home sales revenue fell 22% yr/yr, attributed to fewer new home deliveries and macroeconomic challenges

• MARGIN DISCIPLINE - Adjusted homebuilding gross margin of 22.1% reflects pricing discipline and cost control, per CEO Doug Bauer

• MACROECONOMIC HEADWINDS - Policy uncertainty and geopolitical tensions continue to impact buyer sentiment, per CEO Doug Bauer

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the homebuilding peer group is "buy"

• Wall Street's median 12-month price target for Tri Pointe Homes Inc (Delaware) is $38.50, about 8.6% above its July 23 closing price of $35.19

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 10 three months ago

Press Release: ID:nGNX9mkTR3