Here’s why Citi says crypto prices have been weak recently
Investing.com -- S&P Global Ratings has revised its outlook for Tri Pointe Homes Inc. to positive from stable while affirming the company’s ratings, citing strong credit metrics and a robust balance sheet.
The rating agency expects TPH to maintain debt to EBITDA below 1x over the next 12 months, supported by substantial cash reserves. As of June 30, 2025, the company’s debt to EBITDA ratio stood at 0.7x with balance sheet cash of $622.6 million. S&P projects TPH’s net debt will be between $350 million and $400 million by the end of 2025.
Despite these strong metrics, S&P anticipates higher input costs and incentives will continue to constrain margins. EBITDA margins are forecast to stabilize around 14%-15% through 2025 before declining to 12%-13% in 2026. The company’s EBITDA margins have already decreased to about 16.7% in June 2025 from 19.1% in June 2023.
S&P expects TPH’s 2025 consolidated revenue to decline about 20% to approximately $3.6 billion, with EBITDA falling 30%-35% to between $525 million and $565 million. Nevertheless, the company is projected to maintain debt to EBITDA below 1x over the next two years.
The rating agency noted that TPH’s size and scale remain smaller than higher-rated peers. The company is expected to deliver approximately 5,500 homes over the next 12 months, considerably lower than ’BB+’ rated competitors. However, TPH has expanded its geographic presence with recent entries into Utah, Orlando, and the coastal Carolinas.
As of June 30, 2025, TPH had 150 average active communities. The company plans to reinvest operating cash flows into land spending, which is expected to expand community count by approximately 10% by the end of 2026.
S&P indicated it could upgrade TPH’s rating if the company’s revenue, earnings, closing volume, and market presence become more aligned with ’BB+’-rated homebuilder peers, while maintaining debt to EBITDA below 1.5x and EBITDA to interest coverage comfortably above 10x.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.