XHB - United Homes Group: Housing Market Improves But Not Enough
2024-04-21 06:45:40 ET
Summary
- United Homes Group stock price continues to drop in 2024, in contrast with the broader housing market, on limited growth and high market multiples.
- Recovery in revenues is visible for Q4 2023 as both home closings and new orders are up. This can continue in 2024 on an improved housing market outlook.
- Profits are a mixed bag, though, with weaker operating margins but a sharp uptick in net profit. Considering the more representative adjusted figures reveals high market multiples.
- On balance, the recovery isn't strong enough to justify its current price. If its price drops enough or its earnings show a sharp improvement or both, the stock can look far more interesting.
Since I last wrote about the house builder United Homes Group ( UHG ) in December, its price is down by 12.3%. Even at the time, the risks to the company were clear, prompting a Hold rating on the stock. Not the least of these risks was the state of the housing market, with high-interest rates pricing out prospective buyers....
United Homes Group: Housing Market Improves, But Not Enough