Shea Homes L.P.

Overview Key strengths Key risks Established track record as a master planned community builder. Uncertainty regarding the impact around the new administration?s policies on immigration and tariffs. Solid long-term land holdings in attractive California markets. Exposed to a highly competitive, cyclical industry affected by changes in general and local economic and real estate conditions. Above-average profitability compared with peers Concentrated geographic end markets and smaller scale compared with higher-rated peers with more diverse holdings. As of Dec. 31, 2024, the company?s S&P Global Ratings-adjusted leverage was at 2.2x, with total unit deliveries of 2,222 and debt to capital of 28%. We expect Shea?s revenue to increase 15%-20% in 2025 driven by an expected increase in home deliveries, and relatively flat

...We expect Shea Homes L.P.'s EBITDA margins to decline toward 12%-13% in 2025, primarily driven by increasing buyers' incentives, outpacing home price inflation, and along with material, labor, and land inflation. As of Dec. 31, 2024, the company's S&P Global Ratings- adjusted leverage was at 2.2x, with total unit deliveries of 2,222 and debt to capital of 28%. We expect Shea's revenue to increase 15%-20% in 2025 driven by an expected increase in home deliveries, and relatively flat year-over-year average selling price. Despite revenue growth, the increasing cost of sales and along with flat year-over-year selling general and administrative cost will negatively affect EBITDA margins by 400-500 basis points. We forecast EBITDA of $300...

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