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COLUMBIA, S.C. - United Homes Group, Inc. (NASDAQ: UHG) released its preliminary operational unit statistics for the first quarter ending March 31, 2025, revealing a decrease in net new orders, home starts, and closings compared to the same period last year. Net new orders fell by 22.9%, starts by 10.1%, and closings by 19.0%. Despite these challenges, InvestingPro analysis shows the company maintains strong fundamentals with a healthy current ratio of 3.19 and trailing twelve-month revenue growth of 10%. According to InvestingPro’s Fair Value model, the stock appears undervalued at its current price of $2.73, trading near its 52-week low of $2.66.
The company also reported changes in its backlog, speculative home, and model home inventory. While the total backlog inventory dropped by 23.3%, speculative homes and model homes saw a decrease of 21.3% and 27.8%, respectively. Notably, homes not yet started saw a 100% increase, albeit from a low base. Trading at a P/E ratio of just 3.73, the stock presents an interesting value proposition. Discover more insights about UHG and access comprehensive analysis of 1,400+ stocks with a InvestingPro subscription, including exclusive ProTips and detailed financial health scores.
Interim CEO Jamie Pirrello cited unusual snowfall in South Carolina markets and a slow start to the spring selling season as key factors in the reduced orders. He noted that while January sales were particularly low, there was an improvement in February, with a stronger performance in March and early April.
Jack Micenko, President of United Homes Group, highlighted a strategic shift towards higher pre-sales, which he expects to improve margins due to reduced incentives and increased option purchases by buyers. The company reported that gross margins for their refreshed product set were approximately 500 basis points higher than the overall company backlog.
Chief Financial Officer Keith Feldman discussed strategic initiatives aimed at managing the age of finished inventory and aligning spec inventory with community-level demand, which resulted in the intentional year-over-year decline in finished specs.
Based in the southeastern United States, United Homes Group focuses on residential building, employing a land-light operating strategy and targeting high-growth markets. With a market capitalization of approximately $160 million and gross profit margins of 19.27%, the company maintains a focused operational approach. For detailed insights into UHG’s financial health and growth potential, including 12 additional ProTips, visit InvestingPro.
The information in this article is based on a press release statement from United Homes Group, Inc.
In other recent news, United Homes Group Inc. reported a notable increase in revenue for the fourth quarter of 2024, reaching $134.8 million compared to $116.8 million in the same period the previous year. For the full year, revenue rose to $463.7 million from $421.5 million in 2023, with net income totaling $46.9 million for the year. The company also announced plans to open 26 new communities in 2025, with 11 set to launch in the second quarter and an additional 15 in the third quarter. United Homes introduced a new product line called "Refresh," targeting younger buyers, which has been well-received, contributing to improved gross margins. Despite a competitive market and high mortgage rates impacting affordability, United Homes remains optimistic about its long-term growth prospects. The company has also taken steps to improve its financial position by refinancing its convertible notes, reducing leverage by $10 million, and lowering cash interest expenses. Analyst firm Kennedy Lewis has become a strategic shareholder following this transaction. These developments position United Homes Group for continued success in the evolving housing market.
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