Compass Point analyst Wilkes Graham reiterated a Buy rating on Beazer Homes (NYSE: BZH) but cut his price target of $21.50 (from $25.00) following 'mixed' Q3 results.

Graham comments, "Following mixed 3Q14 results characterized by a headline miss related to a debt extinguishment and higher than expected ASP ($285k) and HB margin (22.1%), BZH sold off 11.27% intraday and hit a new 52 week low ($15.27). Since the beginning of May the stock has dropped to 58% of our 2015 tangible book estimate of $26.57 (including about $14/share in DTA) from 73% and remains one of the most undervalued builders in the sector. Despite the overhang on the space due to weak housing data points of late, we continue to believe the stock is very cheap relative to its home builder peers and warrants investor attention as it has just over 40% upside to our $21.50 price target."

The firm is lowering 2014 and 2015 EPS estimates to $0.15 and $1.06, respectively, from $0.38 and $1.32.

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Shares of Beazer Homes closed at $15.35 yesterday.