Over the last 12 months, the FTSE 250 has delivered some robust positive returns for investors. But sadly, not all of its constituent stocks have been so fortunate. And one of the worst performers has been Vistry Group (LSE:VTY).

Even as demand for new houses remains high, the homebuilder has struggled to deliver on its targets, instead issuing profit warnings to shareholders. As a result, investors have been jumping ship, and the stock is down a whopping 56% since the start of August last year!

Obviously, that’s not what investors like to see. But let’s not forget that beaten-down stocks can sometimes be fantastic buying opportunities if the problems that caused them to drop are fixable.

So, looking at Vistry today, is now the time to consider buying some shares?

What went wrong?

There are a lot of factors contributing to the downfall of the share price. However, one of the biggest drivers seems to be operational mismanagement.

In October 2024, the company announced it had underestimated the development costs for projects in its South Division by as much as 10%. Skip ahead to December, and more problems with this segment emerged, resulting in construction delays and yet another profit warning.

Overall, underlying pre-tax profit guidance for 2024 went from £350m down to £250m – a near-40% collapse compared to 2023 levels.

To be fair, Vistry isn’t the only homebuilder that’s struggled of late. Adverse economic conditions have led to higher input costs, while elevated interest rates have slowed buying activity despite high demand. And the impact of this can also be seen by looking at the share prices of Persimmon and Barratt Redrow, which are both down near 30%.  

However, unlike its peers, there are clearly some deep-rooted operational problems at Vistry. Yet with all this damage seemingly baked into today’s valuation, should investors be more optimistic moving forward?

The bull case

While the share price certainly doesn’t reflect it, Vistry has actually made some concrete progress in addressing the numerous problems. Management has begun restructuring its divisions to simplify operations and reduce the number of reporting lines. This gives CEO Greg Fitzgerald much closer insight into what’s actually happening throughout the business, reducing the risk of future lower-level mismanagement.

The hit to profits will undoubtedly take some time to recover. But looking at its interim results for 2025, the firm seems to have stabilised its bottom line and hit its revamped targets while also making progress towards deleveraging the balance sheet.

That certainly lays a strong foundation for a rebound. And with the government rolling out its new £39bn Affordable Homes Programme, demand for Vistry’s homebuilding activities looks primed to surge.

This all points to the beginning of a new FTSE 250 recovery story. But it does hinge upon flawless execution. Given that investors are keeping Vistry on a very short leash, any further stumbles could trigger yet another sharp sell-off. So, while a buying opportunity may have emerged, it definitely comes with significant risks – something that investors must consider carefully.