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NVR's Q4 Earnings & Revenues Beat Estimates, Stock Rises

NVR, Inc. NVR reported fourth-quarter 2022 results, wherein this homebuilding and mortgage banking company’s earnings and revenues beat the Zacks Consensus Estimate.

Shares of this leading homebuilder increased 4.95% during the trading session on Jan 31, reflecting the better-than-expected and higher earnings and revenues.

Inside the Numbers

The company reported earnings of $133.44 per share, which surpassed the consensus mark of $104.10 by 28.2%. The reported figure increased 49.8% from the prior-year quarter’s figure of $89.09 per share.

NVR, Inc. Price, Consensus and EPS Surprise

NVR, Inc. Price, Consensus and EPS Surprise
NVR, Inc. Price, Consensus and EPS Surprise

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

Total revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.71 billion for the reported quarter, reflecting growth of 22% on a year-over-year basis.

Segment Details

Homebuilding: Revenues in the segment totaled $2.67 billion, up 23% from the year-ago quarter’s levels. The metric also topped the consensus estimate of $2.51 billion by 6.2%. Settlements in the quarter were up 13% year over year to 5,749 units. The average selling price or ASP was $464,000, up 9% year over year.

Gross margin improved 90 basis points (bps) to 25.3%, driven by higher revenues.

New orders in the quarter were down 27% from the prior-year quarter’s levels to 4,153 units. The average sales price of new orders rose 1% from the prior-year quarter’s figure to $459,000. The cancellation rate was 18% for the quarter, up from 10% a year ago. Average active communities totaled 428, up from 418 reported in fourth-quarter 2021.

As of Dec 31, 2022, backlog (on a unit basis) declined 28% to 9,162 units from the prior-year quarter and fell 25% (on a dollar basis) to $4.33 billion.

Mortgage Banking: Mortgage banking fees plunged 17.5% year over year to $44.1 million. Mortgage closed loan production totaled $1.52 billion, up 3% year over year. The capture rate was 80% for the fourth quarter, down from 89% a year ago.

2022 Highlights

Total revenues of $10.3 billion increased 18.7% from the 2021 level. Homebuilding revenues totaled $10.33 billion, reflecting an increase of 19% from 2021. Settlements grew 6% to 22,732 units. Gross margin improved 350 bps to 25.8%. Earnings grew 53.5% to $491.82 per share from $320.48 per share a year ago.

New orders for 2022 dropped 16% to 19,164 units from 22,721 units in 2021.


As of Dec 31 2022, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $2.5 billion and $19.4 million compared with $2.55 billion and $28.4 million, respectively, at 2021-end.

Zacks Rank & Recent Construction Releases

NVR currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

KB Home KBH reported unimpressive results for fourth-quarter fiscal 2022. Quarterly earnings and revenues missed the respective Zacks Consensus Estimate, thanks to prevailing industry headwinds.

Nonetheless, KBH’s earnings and revenues metrics increased on a year-over-year basis. KBH expects housing revenues in the range of $1.25-$1.40 billion in first-quarter fiscal 2023, compared with the year-ago figure of $1.39 billion. ASP is likely to be $490,000-$500,000 versus $486,100 reported a year ago. Homebuilding operating margin (assuming no inventory-related charges) is expected to be between 9.5% and 10.5%. This compares unfavorably with the year-ago figure of 12.2%.

PulteGroup, Inc. PHM reported impressive results for fourth-quarter 2022, with earnings and sales surpassing the respective Zacks Consensus Estimate and increasing on a year-over-year basis.

PHM’s adjusted earnings per share came in at $3.63 and increased 45% from $2.51 per share a year ago. The upside was driven by gains in revenues, improved gross margins and overhead leverage.

D.R. Horton, Inc. DHI reported first-quarter fiscal 2023 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.

DHI’s chairman of the board, Donald R. Horton, said, “Beginning in June 2022 and continuing through today, we have seen a moderation in housing demand caused by significant increases in mortgage interest rates and general economic uncertainty. While these pressures may persist for some time, the supply of both new and existing homes at affordable price points remains limited and demographics supporting housing demand remain favorable.”

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