NVR Q1 Earnings Miss Estimates, Homebuilding Revenues Rise Y/Y

NVR, Inc. NVR reported first-quarter 2025 results, with earnings and Homebuilding revenues missing the Zacks Consensus Estimate. Homebuilding revenues increased year over year, while the bottom line declined from the prior-year quarter’s figure.For the quarter, the Homebuilding segment reported a modest increase in settlements and settlement prices, while new orders and average sales prices declined. The backlog weakened, and gross margins compressed due to higher lot costs and affordability pressures. Meanwhile, mortgage banking operations posted gains in both closed loan production and segment income.Inside NVR’s HeadlinesThe company reported earnings of $94.83 per share, missing the Zacks Consensus Estimate of $107.87 by 12.1%. The reported figure decreased 18.5% from the prior-year quarter’s earnings of $116.41 per share. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)Homebuilding revenues of $2.35 billion missed the consensus mark of $2.38 billion by 1%. Consolidated revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.40 billion, up 3% on a year-over-year basis.NVR, Inc. Price, Consensus and EPS Surprise NVR, Inc. price-consensus-eps-surprise-chart | NVR, Inc. QuoteSegment Details of NVRHomebuilding: The segment’s revenues grew 3% from the year-ago quarter. Settlements in the quarter were up 1% year over year to 5,133 units. Our model predicted settlements to increase 10.2% year over year to 5,271 units. The average selling price (ASP) for settlements was up 2% year over year to $457,900. Our estimate for the metric was $454,400.The gross margin contracted 260 basis points year over year to 21.9%. Our estimate for the metric was 22%.New orders decreased 12% from the prior-year quarter’s level to 5,345 units. However, the ASP of new orders declined 1% from the prior-year quarter’s figure to $448,500. Our model predicted the ASP of new orders at $459,900. The cancellation rate was 16%, up from 13% a year ago.On a unit basis, backlog at the end of March 31, 2025, decreased 9% from the prior-year quarter’s figure to 10,165 homes and fell 7% on a dollar basis to $4.84 billion.The average active communities were 401 in the quarter, down from 427 reported a year ago.Mortgage Banking: Mortgage banking fees increased 11.2% year over year to $52.6 million. Mortgage closed loan production totaled $1.43 billion, up 4% year over year. The capture rate was 86% in the first quarter, flat year over year.NVR’s FinancialsAs of March 31, 2025, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $2.18 billion and $34.2 million, respectively, compared with $2.56 billion and $49.6 million at 2024-end.During 2024, NVR repurchased 77,120 shares for $583.4 million. At the end of the first quarter of 2025, the company had 2,944,615 shares outstanding.NVR's Zacks Rank & Recent Peer ReleasesNVR currently has a Zacks Rank #4 (Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.KB Home KBH reported lackluster fiscal first-quarter 2025 results. The quarter’s earnings and total revenues missed the Zacks Consensus Estimate and tumbled year over year.The quarter’s result reflects the softness in the housing market as homebuyers are still navigating through affordability concerns due to high mortgage rates. Besides, the ongoing macroeconomic uncertainties and other regulatory changes in the country are adding to the instability of the housing market. Owing to these market uncertainties and a lower net order level at the end of the quarter, KB Home lowered its fiscal 2025 guidance.Lennar Corporation LEN reported first-quarter fiscal 2025 results, wherein its earnings and revenues surpassed the Zacks Consensus Estimate. On a year-over-year basis, the top line increased, but the bottom line declined.The quarter’s performance was impacted by a challenging macroeconomic environment. Although demand remained strong, higher interest rates, inflation and weak consumer confidence made homeownership less accessible. A limited supply of affordable homes added to the difficulties, leading to a decline in the company's average sales price. Moving forward to fiscal 2025, to counter the market uncertainties, Lennar aims to focus on its volume-based strategy to drive sales and implement an asset-light, land-light business model.D.R. Horton, Inc. DHI reported dismal second-quarter fiscal 2025 (ended March 31, 2025) results, with earnings and total revenues missing Zacks Consensus Estimate and decreasing on a year-over-year basis.The continued housing market softness due to declining consumer confidence and affordability concerns marred the company’s quarterly performance. Such a weak market scenario resulted in lower net sales orders. Furthermore, soft contributions from the Rental operations and the Financial Services segment added to the downtrend. Although the company is actively engaging in offering necessary sales incentives to drive traffic and incremental sales, it is adversely impacting the bottom line. This, alongside elevated selling, general and administrative expenses, is hurting the margins.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them 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 Lennar Corporation (LEN): Free Stock Analysis Report D.R. Horton, Inc. (DHI): Free Stock Analysis Report NVR, Inc. (NVR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks