BZH
Beazer Homes USA, Inc.
$33.48
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Undervalued
Trading 58.9% below fair value
You pay
$33.48
Bear
$63.42
Fair
$81.54
Bull
$99.66
Bear
$63.42
+89.4%
$4.53 × 14x
Fair
$81.54
+143.5%
$4.53 × 18x
Bull
$99.66
+197.7%
$4.53 × 22x
Adjust Assumptions
18.0x
4.53$
Key Value Driver
Through-cycle normalized EPS ($4.53)
Implied Market Multiple
7.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (21 analysts)
$41.00
Divergence from AlphaVal
99%
Summary
Using 7-year normalized EPS of $4.53 at a 18x cycle multiple, the base-case value is $81.54 per share. P/TBV cross-check: 0.7x.
Warnings
This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.
Wall Street's average price target is $41.00 (from 21 analysts). Our estimate is 99% above the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing