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NVR Gears Up to Report Q1 Earnings: What's in the Offing?

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NVR, Inc.’s (NVR - Free Report) first-quarter 2022 earnings and revenues are expected to have increased on a year-over-year basis, courtesy of solid demand for new homes and higher pricing.

In the last reported quarter, the top and bottom lines lagged the respective Zacks Consensus Estimate. On a year-over-year basis, earnings increased 16%. Total revenues (Homebuilding & Mortgage Banking fees combined), however, declined 5% on a year-over-year basis.

NVR has a strong earnings surprise history, having surpassed analysts’ expectations in 10 of the trailing 13 quarters.

Trend in Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has remained stable at $100.47 over the past 60 days. The estimated figure indicates an increase of 59% from the year-ago quarter. The consensus mark for revenues is pegged at $2.28 billion, suggesting a 15.9% increase from the year-ago reported figure of $1.96 billion.

NVR, Inc. Price and EPS Surprise

NVR, Inc. Price and EPS Surprise

NVR, Inc. price-eps-surprise | NVR, Inc. Quote

Key Factors to Note

NVR’s quarterly results are likely to be impressive, given higher demand for homes. The company’s first-quarter Homebuilding revenues (accounting for more than 97% of total revenues) are expected to have increased from the year-ago level, backed by robust demand for new homes and a shortage of previously owned houses in the market. Also, the rising trend of working from home owing to the coronavirus outbreak has been prompting many families to choose to live in lower-cost and low-density communities, thereby boosting demand.

Yet, inflationary pressures have been a cause of concern. The companies in the industry have been experiencing significant material cost inflation along with escalating land, labor and material costs. Also, the adverse effects of tightening global and domestic supply chains may have been a concern.

Yet, NVR has been successfully raising prices to offset inflationary pressures. The company has been undertaking additional steps to counter cost pressure and incremental tariffs, which are expected to reflect on the bottom line.

The Zacks Consensus Estimate for Homebuilding revenues is pegged at $2.31 billion, which indicates an increase from $2.18 million sequentially.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for NVR for the quarter to be reported. The company does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — to increase the odds of an earnings beat.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: NVR carries a Zacks Rank #3.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks With Favorable Combination

Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Jacobs Engineering Group Inc. (J - Free Report) has an Earnings ESP of +0.59% and a Zacks Rank #3.

Jacobs’ earnings topped the consensus mark thrice but missed the same on the other occasion, with the average surprise being 8.9%. Earnings for the to-be-reported quarter are expected to grow 2.4% year over year.

Summit Materials, Inc. (SUM - Free Report) has an Earnings ESP of +5.26% and a Zacks Rank #2.

SUM’s earnings topped the consensus mark thrice but missed the same on the other occasion, with the average surprise being 7.5%. Earnings for the to-be-reported quarter are expected to decline 15.2% year over year.

KBR, Inc. (KBR - Free Report) has an Earnings ESP of +7.52% and a Zacks Rank #2.

KBR’s earnings topped the consensus mark in all the last four quarters, with the average being 10.4%. Earnings for the to-be-reported quarter are expected to grow 18.8% year over year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Summit Materials, Inc. (SUM) - free report >>

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