Beazer Homes USA, Inc. (BZH): BCG Matrix [Dec-2025 Updated]

You're looking at Beazer Homes USA, Inc. (BZH) in this tough, high-rate environment, and mapping their business units via the Boston Consulting Group Matrix shows where the real action is for capital allocation right now. We see clear Stars driving future growth, like their energy-efficient portfolio and a projected earnings jump of 49.01%, while the core Cash Cows-generating $2.30 billion in FY2025 revenue-keep the lights on thanks to strong liquidity of $538.3 million. But, you also need to watch the Dogs, evidenced by a shrinking backlog down to $516.5 million, and the big Question Marks, like managing a 39.5% net debt ratio while betting big on land options covering 62.1% of their lots. Dive in to see exactly where Beazer Homes USA, Inc. needs to invest, hold, or divest to navigate 2026.

Background of Beazer Homes USA, Inc. (BZH)

You're looking at Beazer Homes USA, Inc. (BZH) as of late 2025, and the picture from the just-released fiscal year 2025 results shows a company navigating a tough, incentive-driven market. For the full fiscal year ended September 30, 2025, Beazer Homes USA, Inc. posted homebuilding revenue of $2.30 billion, which was actually a slight increase of 0.4% compared to fiscal 2024. This modest top-line growth came even as the number of home closings dipped by 0.5% to 4,427 homes, balanced by an increase in the average selling price (ASP) to $520.1 thousand.

However, profitability took a real hit. Net income from continuing operations for fiscal 2025 landed at $45.6 million, a significant drop from the $140.2 million reported in fiscal 2024. Honestly, this squeeze is reflected in the margins; the homebuilding gross margin for the year was 14.3%, down 370 basis points from the prior year, largely due to increased price concessions and a higher mix of lower-margin spec homes. Adjusted EBITDA also fell 35.2% to $157.7 million for the full year.

The company is actively managing its footprint and balance sheet, which is key context for where its business units might land on the matrix. Beazer Homes USA, Inc. ended the fiscal year with 169 active communities, and management has a stated goal to grow that count to over 200 by the end of fiscal 2027. Furthermore, they are focused on deleveraging; the net debt to net capitalization ratio stood at 39.5% as of September 30, 2025, with a target to reach the low-30% range by the end of 2027. To give you a sense of the broader environment, the residential construction market was anticipated to rebound with growth around 12% in 2025, which helps frame the relative performance of Beazer Homes USA, Inc.'s operations.

A strategic point to note is the company's emphasis on its energy-efficient building strategy; as of September 30, 2025, Beazer Homes USA, Inc. held net deferred tax assets of $142.6 million, with about $84.1 million of that stemming from these Energy-Efficiency Tax Credits. Also, the company is using options to manage its land position effectively, controlling 62.1% of its active lots through option agreements by the end of the fiscal year, up from 57.8% the year prior. This flexibility is definitely a plus when the market feels this competitive.

Beazer Homes USA, Inc. (BZH) - BCG Matrix: Stars

You're looking at the segment of Beazer Homes USA, Inc. (BZH) that is dominating a growing market, which is exactly what we want to see in a Star. These are the business units or products that hold a high market share in a market that's still expanding, meaning they require significant investment to maintain that lead.

The Energy-Efficient Home Portfolio is a prime example of this Star positioning for Beazer Homes USA, Inc. This focus isn't just about reputation; it has a tangible financial backing. As of September 30, 2025, the company reported net deferred tax assets totaling $142.6 million. A significant portion of this value, approximately $84.1 million, is directly attributed to Energy-Efficiency Tax Credits earned under Code 45L. This is a high-growth area because Beazer Homes USA, Inc. claims the title of America's #1 energy efficient homebuilder, and these credits are expected to continue increasing through the final earning date of June 30, 2026.

To keep this Star shining, Beazer Homes USA, Inc. is aggressively expanding its footprint. The Active Community Count Growth is a key driver for future sales volume. At the close of the fourth quarter of fiscal year 2025, the average active community count reached 166, an 8.7% increase from 153 a year ago. Management has a clear goal to sustain this momentum, projecting they will reach more than 200 active communities by the end of fiscal 2027.

The financial outlook supports this high-growth classification. Analyst-Forecasted Earnings Growth is projected at 49.01% annually for the 2026-2027 period, which significantly outpaces the US Residential Construction industry's average forecast growth rate of 0.6%. Still, this growth requires cash; Stars consume large amounts to fund market share defense and expansion, often resulting in a near break-even cash flow situation for now.

The Differentiated Choice Plans™ strategy is what helps Beazer Homes USA, Inc. maintain its high market share in a competitive environment, often translating to better pricing power. This strategy is reflected in the full fiscal year 2025 Average Selling Price (ASP), which settled at $520.1 thousand. For the fourth quarter specifically, the ASP was even higher at $534.0 thousand.

Here's a quick look at the key metrics defining the Star quadrant for Beazer Homes USA, Inc. as of the end of fiscal 2025:

The strategy here is clear: invest heavily in these areas to solidify market leadership. You need to keep funding the community expansion and the product differentiation that supports that higher ASP. If Beazer Homes USA, Inc. successfully navigates the current market slowdown and maintains this success, these Stars are definitely set to mature into Cash Cows when the high-growth market eventually moderates.

• Maintain investment in the energy-efficient home portfolio to maximize the remaining $84.1 million in tax credits before June 30, 2026.
• Continue disciplined land acquisition to support the growth trajectory toward >200 active communities by FY2027.
• Leverage the Differentiated Choice Plans™ to defend the $520.1 thousand full-year ASP.
• Monitor the 49.01% projected earnings growth as a key indicator of Star performance translating to future profitability.

Finance: draft 13-week cash view by Friday.

Beazer Homes USA, Inc. (BZH) - BCG Matrix: Cash Cows

You're looking at the core engine of Beazer Homes USA, Inc. (BZH), the segment that consistently provides the necessary fuel for growth initiatives elsewhere in the portfolio. These are the established operations, the ones with the high market presence in markets that aren't seeing explosive growth right now.

The Core Homebuilding Revenue for the full fiscal year 2025 was $2.30 billion, which served as the stable operational base for Beazer Homes USA, Inc. (BZH). This revenue was generated on 4,427 home closings for the year, with an Average Selling Price (ASP) of $520.1 thousand. The segment delivered a Homebuilding Gross Margin of 14.3% for the full year. To maintain efficiency, Selling, General and Administrative (SG&A) expenses were managed to 11.9% of total revenue. The resulting profitability for the full fiscal year 2025 included Net Income from continuing operations of $45.6 million and Adjusted EBITDA of $157.7 million. This is the bedrock cash generation you want to see.

Here's a quick look at the full-year financial output that defines this cash-generating unit:

The Spec Home Closings Strategy showed its impact in the fourth quarter. While the overall market remained challenging, Beazer Homes USA, Inc. (BZH) saw improved construction cycle times, which helped drive Q4 profitability ahead of what was expected. Higher volume of spec homes sold and closed within Q4 was a key component of the quarter's closing volume of 1,406 homes. This operational focus helps maximize cash conversion from existing inventory.

The focus on efficiency within these established areas is clear through several operational metrics:

• Average Active Community Count at year-end was 164, marking a 14% increase year-over-year.
• Net Debt to Net Capitalization Ratio was reduced to below 40% at fiscal year-end.
• Book Value Per Share grew to nearly $43.
• Land acquisition and development spending for the year totaled $684 million, offset by $63 million in land sale proceeds.
• The active controlled lot position at year-end was nearly 25,000 lots.

The Strong Liquidity Position ensures this cash cow segment is well-supported and can fund other parts of the business. At fiscal year-end 2025, Beazer Homes USA, Inc. (BZH) reported $538.3 million of available liquidity. This position is composed of $214.7 million in unrestricted cash and $323.6 million of remaining capacity under the senior unsecured revolving credit facility. Furthermore, the company controlled 62% of its total active lots through option agreements as of September 30, 2025, which helps keep capital deployed efficiently in these mature areas.

Beazer Homes USA, Inc. (BZH) - BCG Matrix: Dogs

You're looking at the units within Beazer Homes USA, Inc. (BZH) that are stuck in low-growth markets and have low relative market share. These are the classic Dogs-they tie up capital without offering much return. Honestly, expensive turn-around plans rarely work here; the strategy is usually to minimize exposure or divest.

Dogs are business units with low market share and low growth rates. They often just break even, neither earning nor consuming significant cash, but they act as cash traps because capital is tied up. These units become prime candidates for divestiture, which is exactly what Beazer Homes USA, Inc. appears to be signaling with its asset management.

Underperforming Land Assets and Capital Reinvestment

Beazer Homes USA, Inc. is actively working to shed nonstrategic land holdings, which fall squarely into the Dog category due to poor alignment or performance. This portfolio realignment is a clear move to free up trapped capital. The company has indicated that nonstrategic asset sales are expected to generate more than $100 million in capital during fiscal year 2026 for reinvestment elsewhere in the portfolio. This divestiture strategy is aimed at improving balance sheet efficiency and focusing resources on higher-growth opportunities. The land sales in fiscal 2025 generated $63 million in proceeds, setting the stage for the larger planned exit in fiscal 2026.

Backlog Decline Signaling Future Revenue Slowdown

The backlog figures clearly show a contraction in future contracted revenue, a hallmark of a unit losing market footing or facing headwinds. The dollar value of homes in backlog at the end of fiscal 2025 was significantly lower than the prior year. This slowdown signals that current market share is not translating into future sales volume at the same rate.

That's a drop of over $280 million in contracted future revenue in just one year. That's a tough number to look at.

Divisions Requiring Leadership Changes

Operational underperformance in specific geographic areas necessitates direct management intervention, suggesting these divisions were not executing well enough to overcome local market challenges. Beazer Homes USA, Inc. made product and sales leadership changes in divisions including Houston and San Antonio. These actions were taken because the sales pace in these Texas markets was weak, requiring operational fixes to improve performance metrics.

The sales pace in Texas improved sequentially in the fourth quarter to 1.8 orders per community from 1.3 the prior quarter, but management maintained a cautious view for the near term in those markets.

Low Overall Profitability

The bottom-line profitability for Beazer Homes USA, Inc. in fiscal 2025 reflects the overall pressure on the business, with net income acting as a lagging indicator of the issues seen in backlog and sales pace. The sharp decline in net income suggests that even successful closings were not sufficiently profitable to maintain prior year levels, likely due to increased incentives or margin compression.

Here's the quick math on the net income drop:

• Net Income (FY2024): $140.2 million
• Net Income (FY2025): $45.6 million
• Decline Percentage: Approximately 67.5%

The company's Adjusted EBITDA also reflected this pressure, declining to $157.7 million, a 35.2% drop year-over-year. These financial results confirm that a significant portion of the business is currently operating in a low-return, low-growth profile, fitting the Dog classification.

Beazer Homes USA, Inc. (BZH) - BCG Matrix: Question Marks

You're looking at the areas of Beazer Homes USA, Inc. (BZH) that are in high-growth markets but haven't yet secured a dominant market share. These are the cash consumers, the bets on future success that need serious capital to move into the Star quadrant, or risk becoming Dogs.

New Community Activations, requiring significant capital to reach the >200 active communities goal by FY2027

Beazer Homes USA, Inc. is clearly investing heavily here, trying to scale up its presence quickly. The company finished fiscal year 2025 with an average active community count of 164, which was a 14% increase from the prior year. To be fair, they ended the fourth quarter of fiscal 2025 with 169 active communities. The big push is to hit the multi-year goal of over 200 active communities by the end of fiscal year 2027. This expansion requires significant upfront capital deployment, which is typical for Question Marks needing to build market presence fast.

High Net Debt Position, with a Net Debt to Net Capitalization ratio of 39.5%, requiring cash investment to deleverage

This leverage level shows the cash drain. At the end of fiscal year 2025 (September 30, 2025), Beazer Homes USA, Inc.'s Net Debt to Net Capitalization ratio stood at 39.5%, a slight improvement from 40.0% the year before. Honestly, this ratio is still high for a company aiming for rapid growth while needing to manage debt. The stated multi-year objective is to deleverage to the low 30% range by the end of fiscal year 2027. Reaching that target means cash flow must be prioritized for debt reduction, which competes directly with the capital needed for community expansion.

First-Time Homebuyer Segment, a high-growth market that demands heavy incentives and financing solutions to capture market share

This segment is a tough nut to crack right now, even though it represents massive potential growth. The reality is that the share of first-time home buyers has hit a record low of 21%, and their average age is now an all-time high of 40 years. Because of this dynamic, Beazer Homes USA, Inc. is having to offer aggressive incentives, especially in communities priced below $500,000. In the fourth quarter of fiscal 2025, the gross margin was only 17.2%, partly due to these larger incentives. The company is actively shifting its focus, expecting the share of closings from these lower-priced, entry-level communities to fall by double digits by the fourth quarter of the next fiscal year, moving toward move-up buyers instead.

Here's a quick look at the key metrics defining these high-investment, uncertain areas for Beazer Homes USA, Inc. as of the end of fiscal year 2025:

Land Option Agreements, controlling 62.1% of lots via options, which is a high-risk, high-reward bet on future market conditions

Beazer Homes USA, Inc. is using options to control future inventory without immediate heavy capital outlay, which is a classic strategy for managing Question Marks. As of September 30, 2025, the company controlled 62.1% of its total active lots through these option agreements. This is up from 57.8% controlled via options at the same time last year. The total number of active controlled lots stood at 24,758 at year-end FY2025. This high option percentage is a bet: it keeps capital flexible, but if market conditions sour or land values drop, the company faces impairment and abandonment charges, which it experienced in Q3 FY2025 with $10.3 million in such charges.

• Control of active lots via options as of September 30, 2025: 62.1%.
• Active controlled lots as of September 30, 2025: 24,758.
• Land acquisition and development spending in Q4 FY2025: $121.7 million.
• Target Net Debt to Net Capitalization ratio for FY2027: low 30% range.

Finance: draft 13-week cash view by Friday.