Ticonderoga Maintains a 'Buy' on Ryland Homes (RYL); RYL First Look – Orders Weak, All Other Metrics Beat Forecast

Ticonderoga maintains a 'Buy' on Ryland Homes (NYSE: RYL), PT $19.50.

Ticonderoga analyst says, "Our first take on earnings is net positive despite the headline Orders number disappointing expectations. With four builders now reporting first quarter results, it has become quite obvious that the spring selling season is a big dud and Street estimates, ours included, have been much too optimistic."

"Why are we positive on this report? It’s pretty simple: on virtually all controllable items, RYL surpassed our expectations. Revenues, Closings, Order ASPs, gross margin, SG&A, operating margin and community growth beat our expectations. Orders were the obvious disappointment, down 17% versus our admittedly optimistic 7% growth. However, as disappointing as that was, it is second only to Lennar (NYSE: LEN) this quarter with NVR Inc (NYSE: NVR) and KB Home (NYSE: KBH) producing worse declines. In our mind, RYL is executing quite well on most fronts but is suffering from a bad market. Thus, once the demand track improves, we believe this execution will shine through with better-than-peers earnings growth."

For more ratings news on Ryland Homes click here and for the rating history of Ryland Homes click here.

Shares of Ryland Homes closed at $17.55 yesterday.

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