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Why Is NVR (NVR) Down 2.2% Since Last Earnings Report?
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A month has gone by since the last earnings report for NVR (NVR - Free Report) . Shares have lost about 2.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NVR due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
NVR, Inc. reported better-than-expected results for first-quarter 2021. Earnings not only beat estimates for the third straight quarter but also improved significantly year over year. Results benefited from robust demand for new homes on lower mortgage rates and a rising work-from-home trend in the United States.
Earnings & Revenue Discussion
The company reported earnings of $63.21 per share, which topped the consensus mark of $61.90 by 2.1%. Also, the reported figure grew 40.6% from the prior-year figure of $44.96 per share.
Total revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.04 billion for the reported quarter. The figure increased 29% on a year-over-year basis, backed by robust demand for new homes on lower mortgage rates.
Segment Details
Homebuilding: Revenues at the segment totaled $1.96 billion, up 26.2% from the year-ago level. However, the metric missed the consensus estimate of $2.1 billion by 4.4%. Settlements were up 20% year over year to 5,072 units. Notably, new orders increased a notable 26% from the prior year to 6,314 units. Average sales price of new orders also inched up 10% from the prior-year quarter to $410,500. Cancellation rate was 10% for the quarter, down from 21% in the year-ago period.
Quarter-end backlog — on a unit and dollar basis — was up 42% and 51% from the year-ago quarter to 12,791 units and $5.20 billion, respectively.
Gross margin in the first quarter of 2021 expanded 290 bps to 19.7% from the year ago period.
Mortgage Banking: Mortgage banking fees increased 189.8% year over year to $77.7 million. Moreover, mortgage closed loan production totaled $1.41 billion, up 25% year over year.
Financials
At first-quarter end, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $2.75 billion and $21.1 million compared with $2.71 billion and $63.55 million, respectively, at 2020-end.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
Currently, NVR has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
NVR has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is NVR (NVR) Down 2.2% Since Last Earnings Report?
A month has gone by since the last earnings report for NVR (NVR - Free Report) . Shares have lost about 2.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NVR due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
NVR Q1 Earnings Surpass Estimates, Backlogs Rise 42% Y/Y
NVR, Inc. reported better-than-expected results for first-quarter 2021. Earnings not only beat estimates for the third straight quarter but also improved significantly year over year. Results benefited from robust demand for new homes on lower mortgage rates and a rising work-from-home trend in the United States.
Earnings & Revenue Discussion
The company reported earnings of $63.21 per share, which topped the consensus mark of $61.90 by 2.1%. Also, the reported figure grew 40.6% from the prior-year figure of $44.96 per share.
Total revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.04 billion for the reported quarter. The figure increased 29% on a year-over-year basis, backed by robust demand for new homes on lower mortgage rates.
Segment Details
Homebuilding: Revenues at the segment totaled $1.96 billion, up 26.2% from the year-ago level. However, the metric missed the consensus estimate of $2.1 billion by 4.4%. Settlements were up 20% year over year to 5,072 units.
Notably, new orders increased a notable 26% from the prior year to 6,314 units. Average sales price of new orders also inched up 10% from the prior-year quarter to $410,500. Cancellation rate was 10% for the quarter, down from 21% in the year-ago period.
Quarter-end backlog — on a unit and dollar basis — was up 42% and 51% from the year-ago quarter to 12,791 units and $5.20 billion, respectively.
Gross margin in the first quarter of 2021 expanded 290 bps to 19.7% from the year ago period.
Mortgage Banking: Mortgage banking fees increased 189.8% year over year to $77.7 million. Moreover, mortgage closed loan production totaled $1.41 billion, up 25% year over year.
Financials
At first-quarter end, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $2.75 billion and $21.1 million compared with $2.71 billion and $63.55 million, respectively, at 2020-end.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
Currently, NVR has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
NVR has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.