Ashton Woods USA LLC

Ongoing robust sales into a largely first-time buyer segment has driven a wide jump in backlog entering the latter part of fiscal 2020 (ends May). Our revenue forecasts, which assume Ashton Woods continues to convert these backlogged homes (into closings) at an increasingly rapid clip, is supported by the company's solid recent track record for delivering on growing demand and supply across the entry-level product range. The positive rating outlook on Ashton Woods reflects the favorable revenue and cash flow dynamics arising from a continuing shift in the company's product mix toward lower-priced homes. Ashton Woods is rapidly growing its presence across the entry-level segment, via the emergent Starlight Homes brand, even as its traditional move-up product remains key to

...Successfully closing on its growing backlog of homes continues to be key to Ashton Woods' unlocking visible growth opportunities. Double-digit (%) annual revenue increases followed the company's launch of its entry-level focused Starlight Homes brand a few years ago. This affordably priced product accounts for a third of all closings and, with Starlight land now comprising about half the company's total lot count, the brand represents Ashton's primary vehicle for growth. Ongoing robust sales into a largely first-time buyer segment has driven a wide jump in backlog entering the latter part of fiscal 2020 (ends May). Our revenue forecasts, which assume Ashton Woods continues to convert these backlogged homes (into closings) at an increasingly rapid clip, is supported by the company's solid recent track record for delivering on growing demand and supply across the entry-level product range. We expect further profit improvements to be modest in size and hard-won. Achieving gross margins from...

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