Shares of Green Brick Partners (NYSE: GRBK) tumbled 6.03% in after-hours trading on Wednesday following the release of the company's first quarter 2025 financial results, which fell short of analyst expectations.

The Texas-based homebuilder reported earnings per share (EPS) of $1.67, missing the consensus estimate of $1.83 by 8.74%. This represents a decrease of 8.24% compared to the $1.82 per share earned in the same period last year. Revenue for the quarter came in at $497.62 million, up 11.24% year-over-year but falling short of the expected $503.82 million.

Despite reporting record net new home orders of 1,106 for the quarter, investors appeared concerned about the company's declining profitability. Green Brick's homebuilding gross margin decreased to 31.2% from 33.4% in the prior year period, indicating increasing cost pressures. Additionally, net income attributable to Green Brick Partners fell 9.9% year-over-year to $75.06 million, further contributing to the negative sentiment.

While the company highlighted its strategic focus on infill and infill-adjacent locations and maintained a strong balance sheet, the earnings miss and margin compression seem to have overshadowed these positives. As the housing market faces challenges from rising interest rates and affordability concerns, investors may be reassessing their outlook on homebuilders like Green Brick Partners.