Critical Analysis: AV Homes (AVHI) versus The Competition

AV Homes (NASDAQ: AVHI) is one of 20 public companies in the “Operative builders” industry, but how does it weigh in compared to its competitors? We will compare AV Homes to similar businesses based on the strength of its risk, profitability, institutional ownership, analyst recommendations, earnings, dividends and valuation.

Volatility and Risk

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AV Homes has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500. Comparatively, AV Homes’ competitors have a beta of 1.10, suggesting that their average stock price is 10% more volatile than the S&P 500.

Profitability

This table compares AV Homes and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AV Homes -2.60% 2.77% 1.22%
AV Homes Competitors 2.26% 7.08% 5.25%

Institutional & Insider Ownership

85.3% of AV Homes shares are owned by institutional investors. Comparatively, 77.9% of shares of all “Operative builders” companies are owned by institutional investors. 6.8% of AV Homes shares are owned by company insiders. Comparatively, 15.5% of shares of all “Operative builders” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares AV Homes and its competitors gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
AV Homes $843.25 million -$21.93 million 26.76
AV Homes Competitors $4.18 billion $223.65 million 14.24

AV Homes’ competitors have higher revenue and earnings than AV Homes. AV Homes is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for AV Homes and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AV Homes 0 1 0 0 2.00
AV Homes Competitors 239 919 803 52 2.33

As a group, “Operative builders” companies have a potential upside of 0.37%. Given AV Homes’ competitors stronger consensus rating and higher probable upside, analysts plainly believe AV Homes has less favorable growth aspects than its competitors.

Summary

AV Homes competitors beat AV Homes on 11 of the 13 factors compared.

AV Homes Company Profile

AV Homes, Inc. is a homebuilder engaged in the business of homebuilding and community development in Florida, Arizona and the Carolinas. The Company is also engaged in other real estate activities, such as the operation of amenities and the sale of land for third-party development. The Company’s segments include Florida, Arizona and the Carolinas. It focuses on the development and construction of primary residential communities serving first-time and move-up buyers, including under its local Bonterra Builders and Royal Oak Homes brands, and active adult communities, which are age-restricted to the age 55 and over active adult demographic. It owns approximately 5,010 developed residential lots, over 3,140 partially developed residential lots, approximately 8,650 undeveloped residential lots, and over 14,450 acres of mixed-use, commercial and industrial land. Its active adult communities include Solivita, CantaMia, Vitalia at Tradition, Encore at Eastmark and Creekside at Bethpage.

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