It has been about a month since the last earnings report for NVR (NVR Quick QuoteNVR - Free Report) . Shares have lost about 9.5% 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 catalysts.

NVR Q4 Earnings & Homebuilding Revenues Beat Estimates, Up Y/Y

NVR reported impressive fourth-quarter 2024 results, with earnings and Homebuilding revenues surpassing the Zacks Consensus Estimate. Both metrics increased on a year-over-year basis.

The quarterly performance showed strong growth in settlements. Although new orders decreased in the quarter, the average selling price increased.

Inside NVR’s Headlines

The company reported earnings of $139.93 per share, which surpassed the Zacks Consensus Estimate of $126.41 by 10.7%. The reported figure increased 15% from the prior-year quarter’s earnings of $121.56 per share.

Homebuilding revenues of $2.78 billion topped the consensus mark of $2.69 billion by 3.3%. Consolidated revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.85 billion, up 17% on a year-over-year basis.

Segment Details of NVR

Homebuilding: The segment’s revenues grew 16% from the year-ago quarter. Settlements in the quarter were up 16% year over year to 6,180 units. The average selling price (“ASP”) for settlements was flat year over year at $450,000. The gross margin contracted 50 basis points year over year to 23.6%.

New orders decreased 8% from the prior-year quarter’s level to 4,794 units. However, the ASP of new orders increased 4% from the prior-year quarter’s figure to $469,000. The cancellation rate was 17%, up from 13% a year ago.

On a unit basis, backlog at the end of Dec. 31, 2024, decreased 3% from the prior-year quarter’s figure to 9,953 homes but rose 1% on a dollar basis to $4.79 billion. The average active communities were 426 in the quarter, down from 438 reported a year ago.

Mortgage Banking: Mortgage banking fees increased 42.7% year over year to $64.9 million. Mortgage closed loan production totaled $1.70 billion, up 13% year over year. The capture rate was 86% in the fourth quarter, down from 88% a year ago.

NVR’s 2024 Highlights

Earnings were $506.69 per share, indicating an increase from $463.31 reported a year ago. Homebuilding revenues were $10.29 billion, up from $9.31 billion in 2023. Total revenues were $10.52 billion, up 11% year over year. Settlements were 22,836 units, up 11%. Gross margin for the year decreased to 23.7% from 24.3% in 2023. Nonetheless, new orders grew 4% to 22,560 units for the year from 2023 level.

NVR’s Financials

As of Dec. 31, 2024, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $2.56 billion and $49.6 million, respectively, compared with $3.13 billion and $36.4 million at 2023-end.

During 2024, NVR repurchased 256,871 shares for $2.1 billion. At December 2024-end, the company had 3,011,644 shares outstanding.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -9.98% due to these changes.

VGM Scores

At this time, NVR has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. 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 this revision indicates a downward shift. It's no surprise NVR has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.