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NVR (NVR) Up 15.7% 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 15.7% 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 drivers.
NVR Q3 Earnings Beat, Homebuilding Revenues Miss, Margin Up
NVR reported mixed third-quarter 2023 results, with earnings surpassing the Zacks Consensus Estimate and Homebuilding revenues missing the same. Although the top line increased on a year-over-year basis, the bottom line declined due to softened housing demand and macroeconomic woes.
Inside the Numbers
The company reported earnings of $125.26 per share, which topped the consensus mark of $112.79 by 11.1%. The reported figure increased by 5.7% from the prior-year quarter’s figure of $118.51 per share.
Total revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.57 billion for the reported quarter, reflecting a decline of 7% on a year-over-year basis.
Segment Details
Homebuilding: Revenues in the segment totaled $2.51 billion, down 8% from the year-ago quarter. The metric lagged the consensus estimate of $2.59 billion by 3%. Settlements in the quarter were down 6% year over year to 5,606 units. The average selling price, or ASP, was $448,000, down 3% year over year.
Gross margin expanded 70 basis points year over year to 24.3%.
New orders, net of cancellations, declined 7% from the prior-year quarter’s levels to 4,746 units. The average sales price of new orders increased 1% from the prior-year quarter’s figure to $456,100. The cancellation rate was 14% for the quarter, down from 15% a year ago.
On a unit basis, the quarter-end backlog declined 4% from the prior-year quarter’s figure of 10,371 homes and fell 6% on a dollar basis to $4.8 billion.
Average active communities were 431 during the quarter versus 423 reported a year ago.
Mortgage Banking: Mortgage banking fees grew 51.2% year over year to $56.6 million. Mortgage closed loan production totaled $1.62 billion, down 2% year over year. The capture rate was 89% for the third quarter, up from 81% a year ago.
Financials
At the third-quarter end, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $2.88 billion and $32.3 million, respectively compared with $2.5 billion and $19.4 million, respectively, at 2022-end.
During the third quarter, NVR repurchased 78,750 shares for $484.3 million. At September-end, the company had 3,209,977 shares outstanding.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, NVR has a nice Growth Score of B, a grade with the same score on the momentum front. 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 broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, NVR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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NVR (NVR) Up 15.7% 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 15.7% 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 drivers.
NVR Q3 Earnings Beat, Homebuilding Revenues Miss, Margin Up
NVR reported mixed third-quarter 2023 results, with earnings surpassing the Zacks Consensus Estimate and Homebuilding revenues missing the same. Although the top line increased on a year-over-year basis, the bottom line declined due to softened housing demand and macroeconomic woes.
Inside the Numbers
The company reported earnings of $125.26 per share, which topped the consensus mark of $112.79 by 11.1%. The reported figure increased by 5.7% from the prior-year quarter’s figure of $118.51 per share.
Total revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.57 billion for the reported quarter, reflecting a decline of 7% on a year-over-year basis.
Segment Details
Homebuilding: Revenues in the segment totaled $2.51 billion, down 8% from the year-ago quarter. The metric lagged the consensus estimate of $2.59 billion by 3%. Settlements in the quarter were down 6% year over year to 5,606 units. The average selling price, or ASP, was $448,000, down 3% year over year.
Gross margin expanded 70 basis points year over year to 24.3%.
New orders, net of cancellations, declined 7% from the prior-year quarter’s levels to 4,746 units. The average sales price of new orders increased 1% from the prior-year quarter’s figure to $456,100. The cancellation rate was 14% for the quarter, down from 15% a year ago.
On a unit basis, the quarter-end backlog declined 4% from the prior-year quarter’s figure of 10,371 homes and fell 6% on a dollar basis to $4.8 billion.
Average active communities were 431 during the quarter versus 423 reported a year ago.
Mortgage Banking: Mortgage banking fees grew 51.2% year over year to $56.6 million. Mortgage closed loan production totaled $1.62 billion, down 2% year over year. The capture rate was 89% for the third quarter, up from 81% a year ago.
Financials
At the third-quarter end, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $2.88 billion and $32.3 million, respectively compared with $2.5 billion and $19.4 million, respectively, at 2022-end.
During the third quarter, NVR repurchased 78,750 shares for $484.3 million. At September-end, the company had 3,209,977 shares outstanding.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, NVR has a nice Growth Score of B, a grade with the same score on the momentum front. 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 broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, NVR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.