As of June 6, 2025, Beazer Homes USA Inc's estimated intrinsic value ranges from $41.61 to $134.08 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $115.21 | +427.5% |
| Discounted Cash Flow (5Y) | $107.77 | +393.4% |
| Dividend Discount Model (Multi-Stage) | $134.08 | +513.9% |
| Dividend Discount Model (Stable) | $56.67 | +159.5% |
| Earnings Power Value | $41.61 | +90.5% |
Is Beazer Homes USA Inc (BZH) undervalued or overvalued?
With the current market price at $21.84, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Beazer Homes USA Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.75 | 0.92 |
| Cost of equity | 7.3% | 10.0% |
| Cost of debt | 6.9% | 12.4% |
| Tax rate | 14.2% | 16.8% |
| Debt/Equity ratio | 1.65 | 1.65 |
| After-tax WACC | 6.5% | 10.2% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $108 | $4,263M | 82.8% |
| 10-Year Growth | $115 | $4,488M | 63.7% |
| 5-Year EBITDA | $42 | $2,280M | 67.9% |
| 10-Year EBITDA | $66 | $3,006M | 45.7% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $178M |
| Discount Rate (WACC) | 10.2% - 6.5% |
| Enterprise Value | $1,751M - $2,764M |
| Net Debt | $997M |
| Equity Value | $754M - $1,767M |
| Outstanding Shares | 30M |
| Fair Value | $25 - $58 |
| Selected Fair Value | $41.61 |
| Metric | Value |
|---|---|
| Market Capitalization | $662M |
| Enterprise Value | $1659M |
| Trailing P/E | 6.95 |
| Forward P/E | 3.98 |
| Trailing EV/EBITDA | 5.60 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 1.65 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $34.56 |
| Discounted Cash Flow (5Y) | 25% | $26.94 |
| Dividend Discount Model (Multi-Stage) | 20% | $26.82 |
| Dividend Discount Model (Stable) | 15% | $8.50 |
| Earnings Power Value | 10% | $4.16 |
| Weighted Average | 100% | $100.98 |
Based on our comprehensive valuation analysis, Beazer Homes USA Inc's weighted average intrinsic value is $100.98, which is approximately 362.4% above the current market price of $21.84.
Key investment considerations:
Given these factors, we believe Beazer Homes USA Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.