As the Q1 earnings season wraps, let's dig into this quarter's best and worst performers in the home builders industry, including TopBuild (NYSE:BLD) and its peers.
Traditionally, homebuilders have built competitive advantages with economies of scale that lead to advantaged purchasing and brand recognition among consumers. Aesthetic trends have always been important in the space, but more recently, energy efficiency and conservation are driving innovation. However, these companies are still at the whim of the macro, specifically interest rates that heavily impact new and existing home sales. In fact, homebuilders are one of the most cyclical subsectors within industrials.
The 12 home builders stocks we track reported a decent Q1; on average, revenues beat analyst consensus estimates by 3.8%. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and home builders stocks have had a rough stretch, with share prices down 7.7% on average since the previous earnings results.
TopBuild (NYSE:BLD) Established in 2015 following a spinoff from Masco Corporation (NYSE:MAS), TopBuild (NYSE:BLD) is a distributor and installer of insulation and other building products.
TopBuild reported revenues of $1.28 billion, up 1.1% year on year, falling short of analysts' expectations by 1.7%. It was a weak quarter for the company, with a miss of analysts' organic revenue estimates.
The stock is down 8.8% since the results and currently trades at $380.68.
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Best Q1: Tri Pointe Homes (NYSE:TPH) Established in 2009 in California, Tri Pointe Homes (NYSE:TPH) is a United States homebuilder recognized for its innovative and sustainable approach to creating premium, life-enhancing homes.
Tri Pointe Homes reported revenues of $939.4 million, up 20.5% year on year, outperforming analysts' expectations by 8.8%. It was a stunning quarter for the company, with an impressive beat of analysts' earnings estimates and a solid beat of analysts' backlog sales estimates.
Tri Pointe Homes delivered the fastest revenue growth among its peers. The stock is up 0.9% since the results and currently trades at $36.48.
Weakest Q1: Skyline Champion (NYSE:SKY) Founded in 1951, Skyline Champion (NYSE:SKY) is a manufacturer of modular homes and buildings in North America.
Skyline Champion reported revenues of $536.4 million, up 9.1% year on year, falling short of analysts' expectations by 4.4%. It was a weak quarter for the company, with a miss of analysts' earnings estimates.
Skyline Champion had the weakest performance against analyst estimates in the group. The stock is down 13.9% since the results and currently trades at $66.91.
Taylor Morrison Home (NYSE:TMHC) Named “America’s Most Trusted Home Builder” in 2019, Taylor Morrison Home (NYSE:TMHC) builds single family homes and communities across the United States.
Taylor Morrison Home reported revenues of $1.7 billion, up 2.3% year on year, surpassing analysts' expectations by 2.7%. It was an exceptional quarter for the company, with an impressive beat of analysts' backlog sales estimates and a decent beat of analysts' earnings estimates.
The stock is down 7.3% since the results and currently trades at $53.53.
Toll Brothers (NYSE:TOL) Started by two brothers who started by building and selling just one home in Pennsylvania, today Toll Brothers (NYSE:TOL) is a luxury homebuilder across the United States.
Toll Brothers reported revenues of $2.84 billion, up 13.2% year on year, surpassing analysts' expectations by 6.7%. It was an exceptional quarter for the company, with revenue and EPS outperforming Wall Street's estimates.
The stock is down 14% since the results and currently trades at $111.99.
This content was originally published on Stock Story
