Markets

NVR Shares Increase on Q3 Earnings Beat and Solid Orders

NVR, Inc.’s NVR shares gained almost 4% in the pre-market trading session, after it reported better-than-expected third-quarter 2020 results. Earnings beat the Zacks Consensus Estimate and also improved year over year, buoyed by solid housing market fundamentals in the United States, courtesy of low mortgage rates.

Inside the numbers

The company reported earnings of $65.11 per share, which topped the consensus mark of $62.01 by 5%. Also, the reported figure grew 16% from the prior-year figure of $56.11 per share.

Total revenues (Homebuilding & Mortgage Banking fees combined) amounted to $1.99 billion for the reported quarter. The figure increased 4% on a year-over-year basis, attributable to higher deliveries.

NVR, Inc. Price, Consensus and EPS Surprise

NVR, Inc. Price, Consensus and EPS Surprise

NVR, Inc. price-consensus-eps-surprise-chart | NVR, Inc. Quote

Segment Details

Homebuilding: Revenues in the segment totaled $1.92 billion, up 3% from the year-ago level. The metric, however, missed the consensus estimate by 4.2%. Settlements were up 1% year over year to 5,180 units.

Nonetheless, new orders increased a notable 40% from the prior year to 6,681 units. Average sales price of new orders also inched up 4% from the prior-year quarter to $384.200. Cancellation rate was 12% for the quarter, down from 16% in the year-ago period.

Quarter-end backlog — on a unit and dollar basis — was up 32% and 37% from the year-ago quarter to 12,124 units and $4.66 billion, respectively.

Gross margin improved 100 basis points to 20%.

Mortgage Banking: Mortgage banking fees increased 82.6% year over year to $69.3 million. Moreover, mortgage closed loan production totaled $1.38 billion, up 1% year over year.

Financials

At third quarter-end, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $2.54 billion and $21.5 million compared with $1.11 billion and $29.4 million, respectively, at 2019-end.

Zacks Rank & Peer Releases

NVR — which share space with D.R. Horton, Inc. DHI in the same industry — currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

KB Home KBH reported third-quarter fiscal 2020 (ended Aug 31, 2020) results, wherein both earnings and revenues topped the respective Zacks Consensus Estimate on solid housing gross margin.

Lennar Corporation LEN — currently carrying a Zacks Rank #1 — reported better-than-expected results for third-quarter fiscal 2020 (ended Aug 31, 2020). The quarterly results benefited from robust housing market fundamentals backed by low interest rates, and persistent undersupply of new as well as existing inventory. Also, solid execution of homebuilding and financial services businesses added to its bliss.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
KB Home (KBH): Free Stock Analysis Report
 
NVR, Inc. (NVR): Free Stock Analysis Report
 
Lennar Corporation (LEN): Free Stock Analysis Report
 
D.R. Horton, Inc. (DHI): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More