NVR Earnings Preview

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Investors hope NVR (NYS: NVR) will top analyst estimates once again after beating predictions by $0.28 in the previous quarter. The company will unveil its latest earnings Friday. NVR is engaged in the construction and sale of single-family detached homes, townhomes, and condominium buildings.

What analysts say:

  • Buy, sell, or hold?: Half of analysts think investors should stand pat on NVR while the remaining half rate the stock as a buy Half of analysts think investors should stand pat on NVR. Analysts like NVR better than competitor D.R. Horton overall. Seven out of 15 analysts rate D.R. Horton a buy compared with three of six for NVR. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.
  • Revenue Forecasts: On average, analysts predict $723.6 million in revenue this quarter. That would represent a rise of 9.3% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $7.74 per share. Estimates range from $6.72 to $8.48.

What our community says:
Most CAPS All-Stars are skeptical of NVR prospects, with 65.7% granting it an "underperform" rating. The community is divided on the stock with 47.1% Fools assigning it an "outperform" rating and 52.9% an "underperform" rating. Fools are bearish on NVR and haven't been shy with their opinions lately, logging 295 posts in the past 30 days. NVR's bearish CAPS rating of one out of five stars falls short of the Fool community sentiment.

Management:
NVR's income has fallen year over year by an average of 35.3% over the past five quarters. Revenue has fallen in the past two quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

19.9%

19%

19.4%

20.4%

Operating Margin

9.2%

4.9%

13.9%

8.7%

Net Margin

5.5%

2.9%

7.2%

6.5%

One final thing: If you want to keep tabs on NVR movements, and for more analysis on the company, make sure you add it to your watchlist.

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At the time this article was published

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