Standard Pacific (SPF, Financial) looks pretty solid on the recent rebound in the housing market. It is marching well against its strategies that continue to deliver positive results for the company. Its revenue increased 18% in the recently reported third quarter. However, its earnings per share of $0.14 missed by $0.01 earnings per share over the same quarter last year.
On track to grow
Nevertheless, the company stands tall on many grounds such as net new orders, home deliveries, community counts, backlog, and strong average selling prices. Standard Pacific has witnessed growth in each of these considerations that play a vital role and reflect real performance for homebuilders. These considerations grew 4%, 3%, 10%, 17% and 15% respectively. Standard Pacific remains on track to better capitalize on this growth momentum that would result in better performance in the future.
Looking ahead, the homebuilder remains focused investing on four key strategic areas such as capital allocated to land, the amount of financial leverage on its balance sheet, the amount of cash reserves it holds on its balance sheet and the return of capital to its shareholders. These strategic areas certainly carry larger leverage on its profitability and growth in the future.
Valuation and financial metrics
Standard Pacific looks pretty healthy to take advantage of the rebound in the housing market. Its efforts are delivering results. Moreover, Standard Pacific remains solid with its land strategy to open new communities in the right markets that are well-located. It has attractive product portfolio that better appeals to customer requirements that should gear up its sales going forward. The analysts expect its earnings to grow at CAGR of 12.80% this year and 17.00% by next year respectively. This indicates good short term return on the earnings.
Moreover, the stock is really cheap. It is trading at trailing P/E of 13.19 and forward P/E of 11.40. This indicates strong growth for its bottom line going forward. It has profit and operating profit margins of 9.45% and 15.02% respectively and ROE of 14.24% for trailing twelve months. Its balance sheet carries total cash of $15.30 million and has total debt of $1.90 billion.
