United Homes Group reports decline in Q2 new orders and closings

COLUMBIA - United Homes Group, Inc. (NASDAQ:UHG), a homebuilder with a market capitalization of $167 million trading at an attractive P/E ratio of 4.4x, reported a 5.9% year-over-year decline in net new orders for the second quarter ended June 30, 2025, according to preliminary operational statistics released by the company. InvestingPro analysis suggests the stock is currently undervalued, despite challenging market conditions.

The homebuilder recorded 304 net new orders in the second quarter compared to 323 in the same period last year. Home closings decreased by 10.1% to 303 units from 337 in the prior-year quarter. Home starts increased by 2.9% to 357 from 347 a year earlier. The company maintains strong financial health with a current ratio of 4.44, indicating robust liquidity to meet short-term obligations.

For the first half of 2025, net new orders fell 15.1% to 600 units from 707 in the comparable period of 2024. Home closings for the six-month period decreased 14.4% to 555 from 648 a year ago, while starts declined 2.9% to 605 from 623.

The company’s total inventory, including backlog, speculative homes, and model homes, decreased 17.6% to 657 units as of June 30, 2025, compared to 797 units at the same time last year.

Chief Executive Officer Jack Micenko attributed the decline in net new orders to a 10% reduction in active community count, which he said is expected to reverse in the second half of 2025. Despite recent challenges, InvestingPro data shows the company maintaining revenue growth of 5.24% over the last twelve months. Subscribers can access 10+ additional ProTips and comprehensive financial metrics for deeper analysis.

"We have a number of new communities coming online, which should translate into a double-digit increase in active communities in the second half of the year," Micenko said in the press release.

The company also reported that its product refresh initiative is driving margin improvement, with refreshed product gross margins approximately 300 basis points higher than legacy product margins in the second quarter. This initiative aims to address the company’s current gross profit margin of 17.07%, which InvestingPro analysis identifies as an area for improvement.

United Homes Group operates in southeastern markets with communities in South Carolina, North Carolina, and Georgia, focusing on entry-level and move-up single-family houses.

In other recent news, United Homes Group Inc. reported a 13.7% decline in revenue for the first quarter of 2025, totaling $87 million, compared to the same period last year. Despite this decrease, the company achieved a net income of $18.2 million. The average sales price of homes increased by 2.9%, which contributed to a slight improvement in the gross margin to 16.2%. In leadership changes, John G. Micenko, Jr. has been appointed as the new CEO, while Jeremy Pyle has been promoted to co-Chief Operating Officer. The board has also formed a special committee to explore strategic options, such as a potential sale of the company or its assets, with Vestra Advisors and Paul, Weiss, Rifkind, Wharton & Garrison LLP engaged as advisors. Furthermore, during the company’s Annual Meeting of Shareholders, Robert Dozier and Alan Levine were elected as Class II directors, and Forvis Mazars, LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2025. These developments reflect United Homes Group’s ongoing efforts to navigate economic challenges and optimize its operations.

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