James McCanless • Wedbush Securities

Answer

CFO Allison Aden clarified that tariffs could impact 5-8% of material costs, primarily on components sourced from China like lighting and plumbing. Executive Mark Fusler stated that chattel rates are in the 8-9% range with no material impact on credit availability. CEO William Boor noted that significant price competition is isolated, mainly in Florida, and has been more pronounced on lower-priced, single-wide homes. Regarding Florida, Boor mentioned it is a notable but not overwhelming part of the business. On OSB prices, Aden acknowledged the recent decline but cautioned that the market can change quickly, especially during the spring building season.

Ask Fintool Equity Research AI

Answer

President and CEO William Boor stated that FEMA orders have been 'strangely quiet' but that Cavco has four plants ready to serve Southern California if needed. Executive Mark Fusler provided the current chattel loan rate range of 8.6% to 9.6%. Regarding the new administration, Boor noted potential inflationary pressure from tariffs but also a potential upside from a more favorable regulatory environment. EVP and CFO Allison Aden explained that commodity price changes, like the recent drop in OSB, typically flow through to cost of goods sold with a 60 to 90-day lag.

Ask Fintool Equity Research AI

Answer

Ara Hovnanian, Chairman, President and CEO, described May sales as "status quo" with April. He explained that clearing older land vintages is a community-by-community process without a specific system-wide timeline, noting the '22 vintage is about 10% of lots. Regarding margins, he expressed hope they are near a bottom, referencing the flat Q3 guidance. He also conveyed optimism for slight reductions in construction costs, with the notable exception of lumber, which remains a significant unknown.

Ask Fintool Equity Research AI

Answer

CEO Ara Hovnanian stated it is too difficult to forecast the duration of the 18.5% gross margin due to significant month-to-month market volatility. He identified stronger markets with pricing power as being on the East Coast, particularly the Northeast, Mid-Atlantic, Delaware, and the Carolinas. Regarding wildfires, Hovnanian explained the primary impact is indirect, as the limited pool of trade labor is drawn to recovery efforts, creating labor constraints for new construction, similar to the effect of recent hurricanes in Florida.

Ask Fintool Equity Research AI

Answer

EVP & CFO Russ Devendorf characterized May demand as consistent with April's challenging but steady environment, requiring incentives. He reiterated that the 3,000-3,100 closing target remains their goal despite not issuing formal guidance due to macro volatility. He declined to comment on a competitor's transaction but viewed the investment as a positive signal for the industry.

Ask Fintool Equity Research AI

Answer

EVP & CFO Russ Devendorf clarified that community count growth is expected to be in the low double-digits (around 12%), from 78 to nearly 90, and that they could still approach the prior 15% target depending on lot delivery timing. He confirmed 2025 growth is entirely organic, driven by market expansions. While open to opportunistic M&A, nothing is imminent. He also reaffirmed that the $335k-$345k average closing price range for 2025 remains valid.

Ask Fintool Equity Research AI

Answer

CFO Russ Devendorf projected that SG&A as a percentage of revenue could see about 50 basis points of leverage in 2025, targeting around 13%, despite investments in new markets. He noted Q3 incentives were just over 3%. CEO Greg Bennett explained that in Alabama, the company is addressing affordability primarily by accepting lower margins to maintain sales pace rather than by significantly altering floor plans.

Ask Fintool Equity Research AI

Answer

CEO Damon Hininger explained it was difficult to quantify transportation revenue yet as it's often bundled into per diem rates, a point CFO David Garfinkle reiterated. Hininger declined to comment on specific acquisition targets for competitive reasons. Regarding the BOP, Hininger noted a new director was recently appointed and expects more clarity on their strategy over the summer, with Garfinkle adding that CoreCivic's secure facilities offer a cost-effective solution for the BOP's infrastructure challenges.

Ask Fintool Equity Research AI

Answer

CEO Damon Hininger and CFO David Garfinkle explained that opportunities with ICE alone could lift occupancy, and added that the U.S. Marshals Service population could also grow significantly. They highlighted recent state contract wins as another driver. Garfinkle reiterated the EBITDA uplift comes from activating ~15,000 idle/leased beds. President Patrick Swindle and Hininger explained that since staffing is two-thirds of costs, they are less exposed to supply inflation, and federal contracts include wage determination clauses that allow for dollar-for-dollar reimbursement of mandated wage increases, protecting them from labor inflation.

Ask Fintool Equity Research AI

Answer

CFO Mark Suchinski indicated that once leverage is significantly reduced to the company's comfort level of 2.0x to 2.5x, the opportunity to return capital to shareholders could be accelerated. He clarified that for the Northlake contract, the upfront capital investment is made by GEO and is included in the company's guidance. These costs are then recovered through pricing over the life of the contract, making the project accretive over its term.

Ask Fintool Equity Research AI

Answer

CFO Mark Suchinski clarified that reaching the prior peak of 370,000 ISAP participants would generate an incremental $250 million in revenue, with further upside if counts exceed that level. Executive Chairman George Zoley added that the $16 million investment is to build inventory for GPS ankle monitors in anticipation of higher demand. Zoley stated that while the initial focus has been on detention, the procurement process for monitoring is now accelerating at an unprecedented pace, and GEO is positioning itself to scale from hundreds of thousands to potentially millions of participants.

Ask Fintool Equity Research AI

Answer

CEO Allan Merrill noted that labor availability has loosened, creating a potential cost tailwind, and that significant efficiencies are being found in the Zero Energy Ready building process. He confirmed the trend of higher backlog conversion should persist. Regarding buybacks, Merrill stated that 'all the tools are in the toolkit,' highlighting the company's large authorization and opportunistic track record.

Ask Fintool Equity Research AI

Answer

Executive David Goldberg confirmed the guidance is for adjusted gross margin. Chairman and CEO Allan Merrill clarified that while sequential community count can be uneven, year-over-year growth is locked in, justifying the focus on improving sales pace. Merrill also explained that the 60% spec mix is a reflection of the current market environment and not a specific product strategy, noting that specs are offered across their communities and are not exclusively entry-level products.

Ask Fintool Equity Research AI

Answer

CEO Eric Lipar confirmed that wholesale demand exists at the right price but is highly market-specific. Executive Joshua Fattor stated that $177.7 million remains on the share repurchase authorization and that buybacks are a compelling investment and priority, especially when the stock trades at a discount to book value. Lipar added that new communities are opening in high-volume areas like the Carolinas and high-ASP markets on the West Coast, which will support full-year goals.

Ask Fintool Equity Research AI

Answer

CEO Eric Lipar stated they have not seen an impact from layoffs in the D.C. area, clarifying their communities are in further-out locations, including West Virginia. On converting renters, he noted that while demand for homeownership is constant, the affordability gap between renting and owning is wider than ever, requiring higher marketing spend (reflected in SG&A) to find qualified buyers. For expansion, Lipar confirmed the focus is on increasing community count within their existing 35 markets, not entering new ones.

Ask Fintool Equity Research AI

Answer

CEO Eric Lipar acknowledged the affordability challenge is significant but did not provide a specific number of affected households. He projected a 2025 sales pace similar to 2024, which, combined with higher ASPs and 10-20% community count growth, would still result in a positive year. He stated they are near the lower limit on home sizes without compromising quality and confirmed that the luxury Terrata brand is a growth area, with plans to include it in more communities, sometimes alongside LGI Homes product.

Ask Fintool Equity Research AI

Answer

Chief Executive Officer William Schwartz stated that the AZEK acquisition could create disruption in 2-step distribution, reinforcing UFPI's strategy to invest in its own distribution capabilities. He also confirmed they have not seen any substantial cancellations or slowdowns in the concrete forming business. Regarding other commodities, both Schwartz and Chief Financial Officer Michael Cole indicated that lumber is the primary focus and there were no other specific products to highlight, though cost pressures persist in Construction and Packaging.

Ask Fintool Equity Research AI

Answer

Sheryl Palmer, Chairman and CEO, acknowledged a slight, temporary increase in cancellations at the beginning of the quarter, which she described as a normal pattern. She stated that she expects the rate to level out and was not concerned, as the absolute numbers remained strong.

Ask Fintool Equity Research AI

Answer

CEO Douglas Bauer attributed the softness in certain markets to a 'very anxious buyer profile' rather than competitive pressures, given the company's premium locations. President & COO Tom Mitchell detailed the buyer mix for Q1, stating entry-level was about 41% and combined move-up was 53% for both deliveries and orders. CFO Glenn Keeler explained the higher full-year ASP guidance is a result of a richer product mix, with more weight towards the West.

Ask Fintool Equity Research AI

Answer

CFO Glenn Keeler clarified that the spec level is in line with historical norms and is not the driver of the margin forecast; the change is due to community mix. President and COO Tom Mitchell noted the spec vs. build-to-order margin spread has widened to about 4%. EVP and CMO Linda Mamet confirmed a lower mix of first-time buyers in the backlog. Keeler reaffirmed the 170-180 community count target for 2026 remains viable.

Ask Fintool Equity Research AI

Answer

EVP & CMO Linda Mamet clarified that while rate volatility causes hesitation, Tri Pointe's well-qualified buyers often prefer using incentives for design upgrades over financing aid. President & COO Tom Mitchell noted the average mortgage rate on locked backlog is 6.0%. Mamet added that only 3% of Q3 orders used a forward commitment. CFO Glenn Keeler confirmed the customer mix for new communities will remain similar, at about 50% premium entry-level.

Ask Fintool Equity Research AI

Answer

CFO John Dixon attributed the projected back-half increase in closings to significant community count growth coming online in Q2 and Q3. He stated that savings from cost-reduction initiatives are already incorporated into the full-year SG&A guidance. Dixon also noted that the average mortgage rate buydown in Q1 was to the mid-5% range and that the overall incentive mix was approximately 55% price-related and 45% mortgage-related.

Ask Fintool Equity Research AI

Answer

CEO Robert Francescon confirmed that current incentive levels are consistent with Q4 at around 900 basis points. He also stated that the 2025 delivery growth guidance assumes a flat absorption pace of roughly 3.2x, with growth driven by community count. Regarding M&A, Francescon noted the company is always evaluating deals that fit its strategy of deepening its presence in existing markets, similar to the two acquisitions completed in 2024.

Ask Fintool Equity Research AI

Answer

Executive Phillip Creek described the backlog margin as 'pretty flat' and expects continued pressure throughout the year. He also provided spec inventory numbers: 700 completed and 2,400 total, up from 400 and 1,900 a year ago, respectively. CEO Robert Schottenstein characterized the sales environment as highly volatile and unpredictable, making forecasting difficult. He estimated that true pricing power currently exists in less than 10% of their communities.

Ask Fintool Equity Research AI

Answer

CEO Robert Schottenstein suggested the Q4 gross margin is a good barometer for the near future, as it reflects the current cost of necessary rate buydowns. Executive Phillip Creek explained the regional order growth disparity was primarily due to a very weak prior-year comparable in the South. He also confirmed that the percentage of homes sold and closed in-quarter could potentially rise from 30% to 40%. On land, Schottenstein noted that while material costs are stable, acquisition of prime land remains competitive, with Creek adding that finished lot costs have risen 10-15% over the last year.

Ask Fintool Equity Research AI

Answer

CEO Robert Schottenstein noted that sales improved as the quarter progressed and that October was 'playing out better than expected.' Executive Phillip Creek added that the strong performance of new communities, including move-up projects, has helped margins. Regarding the election, Schottenstein stated it was more of a general consumer confidence issue rather than buyers waiting for a specific policy, like a tax credit. On pricing, Creek mentioned that while the average sales price has risen, pricing and incentives are managed on a targeted, per-community basis to optimize returns.

Ask Fintool Equity Research AI

Answer

EVP and CFO Bill Wheat clarified that finished specs were down significantly on a sequential basis and are expected to decline further, with improved cycle times enabling faster turns on a leaner inventory base. EVP and COO Michael Murray attributed the low cancellation rate to highly committed buyers in the current market, rather than a specific corporate directive.

Ask Fintool Equity Research AI

Answer

COO Rob McGibney acknowledged that while some meter delays persist in California, the worst of the fire-related impact is over and he expects the situation to normalize soon. He confirmed that in the stronger West and Southwest regions, prices were not cut because communities were already selling at pace. He cited Las Vegas as a market where they have been able to continually raise prices while maintaining strong sales.

Ask Fintool Equity Research AI

Answer

CEO Peter Jackson confirmed that managing price to protect share in value-add has been ongoing for the past 8-12 months. He stated that any change in tone on multifamily was unintentional and that the market has been relatively stable, despite some earlier 'green shoots' commentary.

Ask Fintool Equity Research AI

Answer

CFO Hilla Sferruzza clarified that while the per-home cost of their rate lock offerings hasn't changed materially, the utilization rate by homebuyers has increased. CEO Phillippe Lord reiterated guidance to end 2024 with over 300 communities, including Elliott, and projected double-digit community count growth for 2025, deferring a more specific number for a future release.

Ask Fintool Equity Research AI

Answer

Executive Robert Bates stated that while the Board supports buybacks, the company will not commit to a specific quarterly amount, preferring to repurchase opportunistically when the stock trades near its internal calculation of liquidation value. Regarding the liability reversal, Bates grouped it with other balance sheet cleanup activities, such as non-core asset sales. He indicated that the accounting team is actively reviewing the balance sheet, and similar clean-up items, both positive and negative, could occur in the future as they address older items.

Ask Fintool Equity Research AI

Answer

President and CEO Michael Bieber highlighted Florida and Texas as the company's fastest-growing regions, with significant employee growth driven by state and local demand. He stated the Enica acquisition supports a strategy to expand the commercial business, with a focus on future M&A to capture data center opportunities. Executive Vice President and CFO Creighton Early added that while growth is broad-based, the state and local government sector has been a standout performer contributing to the raised guidance.

Ask Fintool Equity Research AI