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Home Builders Stocks Q1 Results: Benchmarking Toll Brothers (NYSE:TOL)


Kayode Omotosho /
2024/07/09 3:49 am EDT

As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at home builders stocks, starting with Toll Brothers (NYSE:TOL).

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 6.9% on average since the previous earnings results.

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, topping analysts' expectations by 6.7%. It was an exceptional quarter for the company, with revenue and EPS exceeding analysts' estimates.

Douglas C. Yearley, Jr., chairman and chief executive officer, stated: “We are very pleased with our second quarter results. We delivered 2,641 homes at an average price of $1.0 million, generating home sales revenues of $2.65 billion, a 6% increase compared to last year’s second quarter...

Toll Brothers Total Revenue

The stock is down 14.7% since the results and currently trades at $111.05.

We think Toll Brothers is a good business, but is it a buy today? Read our full report here, it's free.

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 Total Revenue

Tri Pointe Homes scored the fastest revenue growth among its peers. The stock is up 1.4% since the results and currently trades at $36.65.

Is now the time to buy Tri Pointe Homes? Access our full analysis of the earnings results here, it's free.

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 and volume estimates.

Skyline Champion had the weakest performance against analyst estimates in the group. The stock is down 12.3% since the results and currently trades at $68.12.

Read our full analysis of Skyline Champion's results here.

Installed Building Products (NYSE:IBP)

Founded in 1977, Installed Building Products (NYSE:IBP) is a company specializing in the installation of insulation, waterproofing, and other complementary building products for residential and commercial construction.

Installed Building Products reported revenues of $692.9 million, up 5.1% year on year, surpassing analysts' expectations by 1.4%. It was a weaker quarter for the company, with a miss of analysts' organic revenue estimates.

The stock is down 10.9% since the results and currently trades at $206.78.

Read our full, actionable report on Installed Building Products here, it's free.

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 6.8% since the results and currently trades at $53.83.

Read our full, actionable report on Taylor Morrison Home here, it's free.

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