Critical Contrast: Gafisa (GFA) and The Competition

Gafisa (NYSE: GFA) is one of 5 publicly-traded companies in the “Real Estate Development & Operations – NEC” industry, but how does it weigh in compared to its competitors? We will compare Gafisa to similar companies based on the strength of its analyst recommendations, earnings, institutional ownership, risk, dividends, valuation and profitability.

Profitability

This table compares Gafisa and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gafisa -195.79% -34.52% -11.97%
Gafisa Competitors 13.97% -2.55% -0.22%

Valuation & Earnings

This table compares Gafisa and its competitors gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Gafisa $263.80 million -$333.60 million -0.41
Gafisa Competitors $151.58 million -$183.43 million 11.10

Gafisa has higher revenue, but lower earnings than its competitors. Gafisa is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Insider & Institutional Ownership

3.8% of Gafisa shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Gafisa has a beta of 1.92, meaning that its share price is 92% more volatile than the S&P 500. Comparatively, Gafisa’s competitors have a beta of 0.85, meaning that their average share price is 16% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Gafisa and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gafisa 2 0 0 0 1.00
Gafisa Competitors 8 21 49 0 2.53

As a group, “Real Estate Development & Operations – NEC” companies have a potential upside of 39.72%. Given Gafisa’s competitors stronger consensus rating and higher probable upside, analysts clearly believe Gafisa has less favorable growth aspects than its competitors.

Summary

Gafisa competitors beat Gafisa on 7 of the 10 factors compared.

About Gafisa

Gafisa S.A. is a diversified national homebuilder. The Company’s segments are Gafisa (for ventures targeted at high and medium income) and Tenda (for ventures targeted at low income). The Company’s brands include Tenda, which serves the affordable entry-level housing segments, Gafisa, which offers a range of residential options to the mid to higher income segments and Alphaville (equity method investment), which focuses on the identification, development and sale of residential communities. In addition, it provides construction services to third parties on certain developments in the Gafisa segment where it retains an equity interest. Its real estate business activities include developments for sale of residential units, land subdivisions and commercial buildings; construction services, and sale of units through its brokerage subsidiaries, Gafisa Vendas Intermediacao Imobiliaria Ltda and Gafisa Vendas in Rio de Janeiro, jointly referred to as Gafisa Vendas.

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