A month has gone by since the last earnings report for NVR (NVR Quick QuoteNVR - Free Report) . Shares have lost about 1.7% 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's Q1 Earnings Top Estimates, Revenues Fall Y/Y

NVR first-quarter 2023 earnings surpassed the Zacks Consensus Estimate. Earnings and revenues declined on a year-over-year basis.

Inside the Numbers

The company reported earnings of $99.89 per share, which topped the consensus mark of $96.46 by 3.6%. The reported figure, however, declined 14.3% from the prior-year figure of $116.56 per share.

Consolidated revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.18 billion for the reported quarter, reflecting a decline of 8% on a year-over-year basis.

Segment Details

Homebuilding: Revenues in the segment totaled $2.13 billion, down 8% from the year-ago level. The metric also missed the consensus estimate of $2.36 billion by 9.7%. Settlements in the quarter declined 11% year over year to 4,639 units. The average selling price, or ASP, was $459,400, reflecting an increase of 4% year over year.

Gross margin decreased 390 basis points to 24.6%, impacted by lower ASP of new orders and high cancellation rate.

New orders were down 1% from the prior year to 5,888 units. The average sales price of new orders fell 5% from the prior-year quarter to $441,200. The cancellation rate was 14% for the quarter, reflecting an increase from the year-ago period. Average active communities totaled 413, up from 404 reported for first-quarter 2022.

Quarter-end backlog on a unit basis decreased 23% to 10,411 units from the prior-year figure and 23% on a dollar basis to $4.79 billion.

Mortgage Banking: Mortgage banking fees decreased 32.1% year over year to $46.9 million. Mortgage closed loan production totaled $1.24 billion, down 17% year over year. The capture rate was 83% for the first quarter, down from 86% a year ago.

Financials

At first-quarter 2023-end, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $2.8 billion and $14.3 million compared with $2.5 billion and $19.4 million, respectively, at 2022-end.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

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

NVR has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

NVR belongs to the Zacks Building Products - Home Builders industry. Another stock from the same industry, D.R. Horton (DHI Quick QuoteDHI - Free Report) , has gained 0.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.

D.R. Horton reported revenues of $7.97 billion in the last reported quarter, representing a year-over-year change of -0.3%. EPS of $2.73 for the same period compares with $4.03 a year ago.

For the current quarter, D.R. Horton is expected to post earnings of $2.74 per share, indicating a change of -41.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +4% over the last 30 days.

D.R. Horton has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.