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NVR (NVR) Up 11.5% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for NVR (NVR - Free Report) . Shares have added about 11.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is NVR due for a pullback? 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 Q2 Earnings Lag Estimates, Order & Backlog Solid
NVR, Inc. delivered a lackluster performance in second-quarter 2020, wherein both earnings and homebuilding revenues lagged the Zacks Consensus Estimate and declined year over year.
Meanwhile, the impact of COVID-19 — which has significantly impacted all facets of the business — on future operational and financial performance is still unpredictable.
Inside the numbers
The company reported earnings of $42.50 per share, which lagged the consensus mark of $44.89 by 5.3%. Also, the reported figure declined 19.9% from the prior-year figure of $53.09 per share.
Total revenues (Homebuilding & Mortgage Banking fees combined) amounted to $1.62 billion during the reported quarter. The figure declined 10% on a year-over-year basis due to increase in sales cancellations during the pandemic.
Segment Details
Homebuilding: Revenues in the segment totaled $1.59 billion, down 9.6% from the year-ago level. The metric also missed the consensus estimate of $1.65 billion by 3.5%.
Nonetheless, new orders increased 13% from the prior year to 5,901 units. Average sales price of new orders also inched up 2% from the prior-year quarter to $365,400. Cancellation rate was 16% in the quarter compared with 13% in the year-ago period. Settlements were down 9% year over year to 4,296 units.
Quarter-end backlog — on a unit and dollar basis — was up 11% and 14% from the year-ago quarter to 10,623 units and $4.01 billion, respectively.
Gross margin improved 30 basis points to 19.2%.
Mortgage Banking: Mortgage banking fees decreased 26.1% year over year to $31.6 million. Moreover, mortgage closed loan production totaled $1.14 billion, down 7% year over year due to reduction in secondary marketing gains on sales of loans owing to disruption caused by the COVID-19 pandemic.
Financials
At the end of the reported quarter, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $1,982.9 million and $18 million compared with $1,110.9 million and $29.4 million, respectively, at 2019-end.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 32.48% due to these changes.
VGM Scores
Currently, NVR has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise 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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NVR (NVR) Up 11.5% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for NVR (NVR - Free Report) . Shares have added about 11.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is NVR due for a pullback? 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 Q2 Earnings Lag Estimates, Order & Backlog Solid
NVR, Inc. delivered a lackluster performance in second-quarter 2020, wherein both earnings and homebuilding revenues lagged the Zacks Consensus Estimate and declined year over year.
Meanwhile, the impact of COVID-19 — which has significantly impacted all facets of the business — on future operational and financial performance is still unpredictable.
Inside the numbers
The company reported earnings of $42.50 per share, which lagged the consensus mark of $44.89 by 5.3%. Also, the reported figure declined 19.9% from the prior-year figure of $53.09 per share.
Total revenues (Homebuilding & Mortgage Banking fees combined) amounted to $1.62 billion during the reported quarter. The figure declined 10% on a year-over-year basis due to increase in sales cancellations during the pandemic.
Segment Details
Homebuilding: Revenues in the segment totaled $1.59 billion, down 9.6% from the year-ago level. The metric also missed the consensus estimate of $1.65 billion by 3.5%.
Nonetheless, new orders increased 13% from the prior year to 5,901 units. Average sales price of new orders also inched up 2% from the prior-year quarter to $365,400. Cancellation rate was 16% in the quarter compared with 13% in the year-ago period. Settlements were down 9% year over year to 4,296 units.
Quarter-end backlog — on a unit and dollar basis — was up 11% and 14% from the year-ago quarter to 10,623 units and $4.01 billion, respectively.
Gross margin improved 30 basis points to 19.2%.
Mortgage Banking: Mortgage banking fees decreased 26.1% year over year to $31.6 million. Moreover, mortgage closed loan production totaled $1.14 billion, down 7% year over year due to reduction in secondary marketing gains on sales of loans owing to disruption caused by the COVID-19 pandemic.
Financials
At the end of the reported quarter, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $1,982.9 million and $18 million compared with $1,110.9 million and $29.4 million, respectively, at 2019-end.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 32.48% due to these changes.
VGM Scores
Currently, NVR has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise NVR has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.