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NVR (NVR) Down 4.4% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for NVR (NVR - Free Report) . Shares have lost about 4.4% 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 the most recent earnings report in order to get a better handle on the important drivers.
NVR Q1 Earnings & Homebuilding Revenues Beat, Orders Up
NVR reported impressive first-quarter 2024 results, with earnings and Homebuilding revenues surpassing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was backed by improved demand trends, which resulted in higher order volumes.
Inside the Numbers
The company reported earnings of $116.41 per share, which topped the consensus mark of $106.03 by 9.8%. The reported figure increased 17% from the prior-year quarter’s figure of $99.89 per share.
Total revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.33 billion in the reported quarter, up 7% on a year-over-year basis.
Segment Details
Homebuilding: Revenues in the segment totaled $2.29 billion, up 7% from the year-ago quarter. The metric topped the consensus estimate of $2.15 billion by 6.1%. Settlements in the quarter were up 10% year over year to 5,089 units. The average selling price, or ASP, was $449,200, down 2% year over year.
Gross margin contracted 10 basis points year over year to 24.5%. Our estimate for the metric was 24.3%.
New orders, net of cancellations, increased 3% from the prior-year quarter’s levels to 6,049 units. The average sales price of new orders increased 3% from the prior-year quarter’s figure to $454,300. The cancelation rate was 13% for the quarter, down from 14% a year ago.
On a unit basis, backlog at the end of Mar 31, 2024, improved 7% from the prior-year quarter’s figure to 11,189 homes and rose 9% on a dollar basis to $5.22 billion.
Average active communities were 427 during the quarter, up from 413 reported a year ago.
Mortgage Banking: Mortgage banking fees inched up 0.7% year over year to $47.3 million. Mortgage closed loan production totaled $1.38 billion, up 11% year over year. The capture rate was 86% in the first quarter, up from 83% a year ago.
Financials
As of Mar 31, 2024, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $2.84 billion and $27.8 million compared with $3.13 billion and $36.4 million, respectively, at 2023-end.
During the first quarter, NVR repurchased 66,858 shares for $496.9 million. At March-end, the company had 3,167,625 shares outstanding.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
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 downward 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) Down 4.4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for NVR (NVR - Free Report) . Shares have lost about 4.4% 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 the most recent earnings report in order to get a better handle on the important drivers.
NVR Q1 Earnings & Homebuilding Revenues Beat, Orders Up
NVR reported impressive first-quarter 2024 results, with earnings and Homebuilding revenues surpassing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was backed by improved demand trends, which resulted in higher order volumes.
Inside the Numbers
The company reported earnings of $116.41 per share, which topped the consensus mark of $106.03 by 9.8%. The reported figure increased 17% from the prior-year quarter’s figure of $99.89 per share.
Total revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.33 billion in the reported quarter, up 7% on a year-over-year basis.
Segment Details
Homebuilding: Revenues in the segment totaled $2.29 billion, up 7% from the year-ago quarter. The metric topped the consensus estimate of $2.15 billion by 6.1%. Settlements in the quarter were up 10% year over year to 5,089 units. The average selling price, or ASP, was $449,200, down 2% year over year.
Gross margin contracted 10 basis points year over year to 24.5%. Our estimate for the metric was 24.3%.
New orders, net of cancellations, increased 3% from the prior-year quarter’s levels to 6,049 units. The average sales price of new orders increased 3% from the prior-year quarter’s figure to $454,300. The cancelation rate was 13% for the quarter, down from 14% a year ago.
On a unit basis, backlog at the end of Mar 31, 2024, improved 7% from the prior-year quarter’s figure to 11,189 homes and rose 9% on a dollar basis to $5.22 billion.
Average active communities were 427 during the quarter, up from 413 reported a year ago.
Mortgage Banking: Mortgage banking fees inched up 0.7% year over year to $47.3 million. Mortgage closed loan production totaled $1.38 billion, up 11% year over year. The capture rate was 86% in the first quarter, up from 83% a year ago.
Financials
As of Mar 31, 2024, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $2.84 billion and $27.8 million compared with $3.13 billion and $36.4 million, respectively, at 2023-end.
During the first quarter, NVR repurchased 66,858 shares for $496.9 million. At March-end, the company had 3,167,625 shares outstanding.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
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 downward 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.