BTIG has maintained its Neutral rating on NVR Inc . (NYSE: NYSE:NVR), following the homebuilder's third-quarter earnings report.
NVR's earnings per share (EPS) of $130.50 surpassed BTIG's projection of $127.86 and came close to the Factset consensus of $131.00.
The better-than-expected results were attributed to a lower tax rate and slightly higher revenue, although this was somewhat balanced by a dip in financial services revenue and other income. The company's operating margins matched expectations at 17.8%.
NVR experienced a significant new order increase of 19%, which outperformed BTIG's estimate of a 5% rise. This growth occurred despite a year-over-year decline in community count by 2%, contrary to BTIG's estimated 2% increase.
Despite the robust order growth, BTIG points out that NVR is still challenged by a lack of community count growth, which has been a consistent concern for both the firm and NVR's management.
In other recent news, JPMorgan raised its price target for NVR Inc. to $9,820, maintaining a neutral stance. This follows NVR's third-quarter earnings per share (EPS) of $130.49, which was slightly below the consensus estimate of $131.28. Despite lower-than-expected gross margins and an increase in selling, general, and administrative expenses, NVR reported a 19% year-over-year increase in orders for the third quarter, outpacing JPMorgan's growth expectation of 13%.
In addition, NVR's third-quarter earnings fell short due to rising costs, with gross profit margins declining to 23.4% from 24.3% in the same period last year. Despite the squeeze on profits, the company saw a 5% increase in home deliveries, leading to consolidated revenues climbing 6% year-over-year to $2.73 billion, surpassing analyst estimates.
Furthermore, JPMorgan increased its price target on NVR shares following the company's second-quarter financial results. The firm revised its earnings per share estimates for 2024-25 and adjusted its share repurchase estimates for the same period.
InvestingPro Insights
NVR Inc.'s recent performance aligns with several key metrics and insights from InvestingPro. The company's strong earnings report, which exceeded BTIG's projections, is reflected in InvestingPro's data showing a robust revenue of $10.28 billion over the last twelve months as of Q3 2024, with a 3.41% growth rate. This solid financial performance is further underscored by NVR's impressive operating income margin of 19.98% for the same period.
InvestingPro Tips highlight that NVR has been aggressively buying back shares, which could be contributing to its strong earnings per share figures. Additionally, the company holds more cash than debt on its balance sheet, indicating a strong financial position that aligns with BTIG's assessment of NVR's efficient production model.
However, it's worth noting that NVR is trading at a high P/E ratio relative to near-term earnings growth, with a P/E ratio of 17.7 (adjusted for the last twelve months as of Q3 2024). This valuation concern echoes BTIG's observations about NVR's current market valuation.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for NVR, providing a deeper understanding of the company's financial health and market position.
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