Key Takeaways NVR's Q2 earnings fell 23% as homebuilding revenues dropped 11%, sending shares down 3.1%.Settlements fell 8% and average pricing dropped 3% as higher lot costs pressured margins.New orders and backlog units rose 9%, while the cancellation rate improved to 14.9%. NVR, Inc. (NVR - Free Report) reported second-quarter 2026 results, with earnings and Homebuilding revenues missing the Zacks Consensus Estimate. Earnings and Homebuilding revenues also declined on a year-over-year basis.
The quarter reflected stronger order activity and a lower cancellation rate, but fewer settlements, softer pricing and margin pressure weighed on results. Backlog units increased 9% year over year, while Homebuilding gross margin contracted amid higher lot costs, affordability challenges and land deposit impairments.
Following the results, NVR stock slipped 3.1% during yesterday’s trading hours.
Inside NVR’s Q2 HeadlinesThe company reported earnings of $83.96 per share, down 22.6% year over year and missing the Zacks Consensus Estimate of $94.82 by 11.5%.
Homebuilding revenues of $2.28 billion also missed the consensus mark of $2.41 billion by 5.2%. Revenues declined 10.5% year over year from $2.55 billion, reflecting lower settlement volumes and a decrease in the average settlement price.
Consolidated revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.33 billion, down 10.4% on a year-over-year basis.
NVR Faces Lower Settlements and Pricing PressureHomebuilding revenues decreased to $2.28 billion from $2.55 billion in the prior-year quarter. Settlements fell 8% to 5,058 units from 5,475 units, limiting revenue generation during the period. Our model predicted settlements to decline 6.7% year over year to 5,107 units.
The average settlement price declined 3% year over year to $450,700. The combination of fewer closings and a lower average price weighed on the segment’s top-line performance. Our estimate for the metric was $471,500.
NVR Sees Margin CompressionHomebuilding gross margin contracted to 19.2% from 21.5% a year ago. Profitability was pressured by higher lot costs, continued affordability challenges and weak consumer sentiment, which led to increased pricing pressure. Our estimate for the metric was 18.8%.
The quarter also included approximately $21.7 million of contract land deposit impairments. Consequently, homebuilding income before taxes declined 30% year over year to $293.2 million.
NVR Sees Mortgage Banking Activity ModerateMortgage closed loan production declined 13% year over year to $1.35 billion from $1.56 billion. Mortgage banking fees decreased to $46.6 million from $50.5 million.
Mortgage banking income before taxes fell 14% to $25.4 million from $29.6 million. The capture rate, which represents the percentage of NVR homebuyers using the company’s mortgage services, decreased to 85% from 87%.
NVR Benefits From Stronger Order ActivityNew orders, net of cancellations, increased 9% year over year to 5,885 units. Growth was led by the South East, where orders rose to 2,228 units from 1,953 units, while Mid Atlantic orders increased to 2,081 units from 1,930 units.
The average sales price of new orders declined 5% to $437,100. Our model predicted the ASP of new orders at $457,300. However, the cancellation rate improved to 14.9% from 16.5%, suggesting that a greater proportion of signed contracts remained intact during the quarter.
NVR Builds Backlog Despite Lower Average PricingBacklog totaled 10,998 units as of June 30, 2026, up 9% from 10,069 units a year earlier. The dollar value of backlog increased 5% to $4.99 billion.
The average backlog price declined to $453,900 from $472,100. Average active communities increased to 442 from 426, expanding the company’s selling footprint while stronger order activity supported the year-over-year backlog increase.
NVR Maintains Liquidity and Continues BuybacksHomebuilding cash and cash equivalents were $1.09 billion as of June 30, 2026, compared with $1.88 billion at the end of 2025. Homebuilding inventory increased to $2.24 billion from $1.72 billion during the same period. Mortgage banking cash and cash equivalents were $50.9 million versus $32.6 million at year-end.
NVR repurchased 54,716 shares during the quarter for an aggregate cost of $357.8 million. Shares outstanding declined to 2.68 million from 2.88 million a year earlier, helping offset part of the effect of lower net income on per-share earnings.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PulteGroup, Inc. (PHM - Free Report) reported better-than-expected second-quarter 2026 results, with adjusted earnings and total revenues topping the Zacks Consensus Estimate, but declining year over year. The quarterly results reflect reduced home-closing volumes, softer average selling prices (ASP) and margin compression.
PulteGroup ended the quarter with a backlog of 10,966 homes, up 1.7% from the prior-year level. Backlog units increased in the Northeast, Florida, Midwest and Texas, while the Southeast and West reported declines. The value of homes in backlog slipped 0.6% to $6.80 billion. The divergence between higher units and lower value indicates that the average value of homes in backlog declined year over year, consistent with PHM’s broader pricing pressure.
D.R. Horton, Inc. (DHI - Free Report) reported third-quarter fiscal 2026 earnings of $3.20 per share, beating the Zacks Consensus Estimate of $2.99 by 7%. Revenues of $9.23 billion also surpassed the consensus mark of $9.19 billion by 0.5%. On a year-over-year basis, earnings declined 4.8%, while revenues increased marginally.
DHI’s earnings and revenue beat was driven by higher home-closing volumes, resilient home sales margins, disciplined management of pricing and incentives, and contributions from the Rental, Forestar and Financial Services businesses. However, lower profitability, elevated incentives and cautious consumer demand continued to weigh on results. D.R. Horton now expects fiscal 2026 consolidated revenues of $32.5-$33 billion, down from $33.5-$34.5 billion expected earlier.
Lennar Corporation (LEN - Free Report) reported mixed second-quarter fiscal 2026 results, with adjusted earnings topping the Zacks Consensus Estimate while revenues missed the same. Year over year, both metrics declined, given ongoing softness in housing demand and a lower ASP for homes delivered.
LEN’s Homebuilding revenues declined 2% year over year to $7.62 billion from $7.84 billion, with home deliveries increasing 2% to 20,519 homes from 20,131 homes a year ago. Backlog at quarter-end increased to 16,818 homes from 15,538 homes. For the third quarter of fiscal 2026, Lennar expects home deliveries in the range of 20,500-21,500 and new orders between 21,000 and 22,000 homes. Gross margin on home sales is expected to be approximately 16%.
NVR (NVR - Free Report) came out with quarterly earnings of $83.96 per share, missing the Zacks Consensus Estimate of $94.82 per share. This compares to earnings of $108.54 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of -11.45%. A quarter ago, it was expected that this homebuilder would post earnings of $78.25 per share when it actually produced earnings of $67.76, delivering a surprise of -13.41%.
Over the last four quarters, the company has surpassed consensus EPS estimates two times.
NVR, which belongs to the Zacks Building Products - Home Builders industry, posted revenues of $2.28 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 5.23%. This compares to year-ago revenues of $2.55 billion. The company has topped consensus revenue estimates two times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
NVR shares have lost about 12.9% since the beginning of the year versus the S&P 500's gain of 9.6%.
What's Next for NVR?While NVR has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for NVR was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $107.42 on $2.59 billion in revenues for the coming quarter and $371.11 on $9.59 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Building Products - Home Builders is currently in the bottom 16% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Another stock from the same industry, M/I Homes (MHO - Free Report) , has yet to report results for the quarter ended June 2026. The results are expected to be released on July 29.
This homebuilder is expected to post quarterly earnings of $3.17 per share in its upcoming report, which represents a year-over-year change of -28.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
M/I Homes' revenues are expected to be $1.18 billion, up 1.8% from the year-ago quarter.
, /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its second quarter ended June 30, 2026 of $236.5 million, or $83.96 per diluted share. For the second quarter ended June 30, 2026, net income and diluted earnings per share decreased 29% and 23%, respectively, when compared to 2025 second quarter net income of $333.7 million, or $108.54 per diluted share. Consolidated revenues for the second quarter of 2026 totaled $2.33 billion, compared to $2.60 billion in the second quarter of 2025.
For the six months ended June 30, 2026, consolidated revenues were $4.21 billion, a 16% decrease from $5.00 billion reported for the same period of 2025. Net income for the six months ended June 30, 2026 was $434.8 million, a decrease of 31% when compared to net income for the six months ended June 30, 2025 of $633.3 million. Diluted earnings per share for the six months ended June 30, 2026 was $151.38, a decrease of 26% from $203.20 per diluted share for the same period of 2025.
Homebuilding
New orders in the second quarter of 2026 increased by 9% to 5,885 units, when compared to 5,379 units in the second quarter of 2025. The average sales price of new orders in the second quarter of 2026 was $437,100, a decrease of 5% when compared to the second quarter of 2025. The cancellation rate in the second quarter of 2026 was 15% compared to 17% in the second quarter of 2025. Settlements in the second quarter of 2026 decreased by 8% to 5,058 units, compared to 5,475 units in the second quarter of 2025. The average settlement price in the second quarter of 2026 was $450,700, a decrease of 3% when compared to the second quarter of 2025. Our backlog of homes sold but not settled as of June 30, 2026 increased on a unit basis by 9% to 10,998 units and increased on a dollar basis by 5% to $4.99 billion when compared to the respective backlog unit and dollar balances as of June 30, 2025.
Homebuilding revenues of $2.28 billion in the second quarter of 2026 decreased by 11% compared to homebuilding revenues of $2.55 billion in the second quarter of 2025. Gross profit margin in the second quarter of 2026 decreased to 19.2%, from 21.5% in the second quarter of 2025. Gross profit margin was negatively impacted by higher lot costs, pricing pressure due to continued affordability challenges and weak consumer sentiment, and by contract land deposit impairments totaling approximately $21.7 million. Income before tax from the homebuilding segment totaled $293.2 million in the second quarter of 2026, a decrease of 30% when compared to the second quarter of 2025.
Mortgage Banking
Mortgage closed loan production in the second quarter of 2026 totaled $1.35 billion, a decrease of 13% when compared to the second quarter of 2025. Income before tax from the mortgage banking segment totaled $25.4 million in the second quarter of 2026, a decrease of 14% when compared to $29.6 million in the second quarter of 2025.
About NVR
NVR, Inc. operates in two business segments: homebuilding and mortgage banking. The homebuilding segment sells and builds homes under the Ryan Homes, NVHomes and Heartland Homes trade names, and operates in thirty-seven metropolitan areas in sixteen states and Washington, D.C. For more information about NVR, Inc. and its brands, see www.nvrinc.com, www.ryanhomes.com, www.nvhomes.com and www.heartlandluxuryhomes.com.
Some of the statements in this release made by the Company constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as "believes," "expects," "may," "will," "should," "could," or "anticipates" or the negative thereof or other comparable terminology. All statements other than of historical facts are forward-looking statements. Forward-looking statements contained in this document may include those regarding market trends, NVR's financial position and financial results, business strategy, the outcome of pending litigation, investigations or similar contingencies, and projected plans and objectives of management for future operations. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance of NVR to be materially different from future results, performance or achievements expressed or implied by the forward-looking statements. Such risk factors include, but are not limited to the following: general economic and business conditions (on both a national and regional level); interest rate changes; access to suitable financing by NVR and NVR's customers; increased regulation in the mortgage banking industry; the ability of our mortgage banking subsidiary to sell loans it originates into the secondary market; competition; the availability and cost of land and other raw materials used by NVR in its homebuilding operations; shortages of labor; the economic impact of a major epidemic or pandemic; weather related slow-downs; building moratoriums; governmental regulation; fluctuation and volatility of stock and other financial markets; mortgage financing availability; and other factors over which NVR has little or no control. NVR undertakes no obligation to update such forward-looking statements except as required by law.
NVR, Inc.
Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Homebuilding:
Revenues
$ 2,279,771
$ 2,548,267
$ 4,114,650
$ 4,898,712
Other income
12,095
25,088
40,144
51,800
Cost of sales
(1,841,217)
(1,999,983)
(3,315,756)
(3,835,358)
Selling, general and administrative
(150,721)
(149,170)
(307,692)
(314,287)
Interest expense
(6,698)
(6,685)
(13,552)
(13,866)
Homebuilding income
293,230
417,517
517,794
787,001
Mortgage Banking:
Mortgage banking fees
46,585
50,547
92,769
103,134
Interest income
3,983
4,493
7,612
8,299
Other income
1,292
1,301
2,069
2,394
General and administrative
(26,153)
(26,425)
(49,280)
(51,118)
Interest expense
(296)
(300)
(629)
(573)
Mortgage banking income
25,411
29,616
52,541
62,136
Income before taxes
318,641
447,133
570,335
849,137
Income tax expense
(82,183)
(113,396)
(135,518)
(215,824)
Net income
$ 236,458
$ 333,737
$ 434,817
$ 633,313
Basic earnings per share
$ 87.65
$ 114.52
$ 158.75
$ 214.78
Diluted earnings per share
$ 83.96
$ 108.54
$ 151.38
$ 203.20
Basic weighted average shares outstanding
2,698
2,914
2,739
2,949
Diluted weighted average shares outstanding
2,816
3,075
2,872
3,117
NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
June 30, 2026
December 31, 2025
ASSETS
Homebuilding:
Cash and cash equivalents
$ 1,093,736
$ 1,883,844
Restricted cash
44,562
34,348
Receivables
49,642
32,742
Inventory:
Lots and housing units, covered under sales agreements with customers
1,877,430
1,410,695
Unsold lots and housing units
307,698
252,029
Land under development
21,067
39,312
Building materials and other
29,094
21,524
2,235,289
1,723,560
Contract land deposits, net
927,380
851,458
Property, plant and equipment, net
99,248
103,770
Operating lease right-of-use assets
110,893
110,535
Other assets
348,163
349,306
4,908,913
5,089,563
Mortgage Banking:
Cash and cash equivalents
50,938
32,642
Restricted cash
8,023
6,047
Mortgage loans held for sale, net
396,678
571,596
Property and equipment, net
7,723
7,727
Operating lease right-of-use assets
22,538
23,953
Other assets
75,807
125,402
561,707
767,367
Total assets
$ 5,470,620
$ 5,856,930
NVR, Inc.
Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)
(unaudited)
June 30, 2026
December 31, 2025
LIABILITIES AND SHAREHOLDERS' EQUITY
Homebuilding:
Accounts payable
$ 375,478
$ 259,244
Accrued expenses and other liabilities
311,697
376,976
Customer deposits
294,698
249,210
Operating lease liabilities
117,947
117,589
Senior notes
908,162
909,160
2,007,982
1,912,179
Mortgage Banking:
Accounts payable and other liabilities
46,849
53,738
Operating lease liabilities
24,593
26,144
71,442
79,882
Total liabilities
2,079,424
1,992,061
Commitments and contingencies
Shareholders' equity:
Common stock, $0.01 par value; 60,000,000 shares authorized; 20,555,330 shares
issued as of both June 30, 2026 and December 31, 2025
206
206
Additional paid-in capital
3,223,670
3,155,367
Deferred compensation trust – 106,697 shares of NVR, Inc. common stock as of
both June 30, 2026 and December 31, 2025
(16,710)
(16,710)
Deferred compensation liability
16,710
16,710
Retained earnings
16,821,586
16,386,769
Less treasury stock at cost – 17,877,177 and 17,755,943 shares as of June 30, 2026
and December 31, 2025, respectively
(16,654,266)
(15,677,473)
Total shareholders' equity
3,391,196
3,864,869
Total liabilities and shareholders' equity
$ 5,470,620
$ 5,856,930
NVR, Inc.
Operating Activity
(dollars in thousands)
(unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Units
Average
Price
Units
Average
Price
Units
Average
Price
Units
Average
Price
New orders, net of cancellations:
Mid Atlantic (1)
2,081
$ 499.2
1,930
$ 531.3
3,998
$ 499.2
3,796
$ 523.0
North East (2)
390
$ 639.4
424
$ 655.3
859
$ 624.4
801
$ 674.0
Mid East (3)
1,186
$ 419.2
1,072
$ 424.2
2,369
$ 422.2
2,170
$ 422.0
South East (4)
2,228
$ 353.3
1,953
$ 361.7
4,397
$ 356.0
3,957
$ 359.0
Total
5,885
$ 437.1
5,379
$ 458.1
11,623
$ 438.6
10,724
$ 453.3
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Units
Average Price
Units
Average Price
Units
Average Price
Units
Average Price
Settlements:
Mid Atlantic (1)
1,721
$ 511.1
2,101
$ 537.2
3,139
$ 515.3
4,151
$ 532.6
North East (2)
452
$ 621.1
474
$ 651.7
818
$ 637.2
945
$ 632.5
Mid East (3)
1,056
$ 429.4
1,082
$ 415.8
1,778
$ 429.6
2,095
$ 411.6
South East (4)
1,829
$ 364.1
1,818
$ 363.3
3,338
$ 363.0
3,417
$ 359.2
Total
5,058
$ 450.7
5,475
$ 465.4
9,073
$ 453.5
10,608
$ 461.8
As of June 30,
2026
2025
Units
Average
Price
Units
Average
Price
Backlog:
Mid Atlantic (1)
4,019
$ 509.2
3,713
$ 532.6
North East (2)
1,014
$ 632.9
911
$ 698.4
Mid East (3)
2,224
$ 426.2
2,120
$ 426.8
South East (4)
3,741
$ 362.5
3,325
$ 371.6
Total
10,998
$ 453.9
10,069
$ 472.1
NVR, Inc.
Operating Activity (Continued)
(dollars in thousands)
(unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Average active communities:
Mid Atlantic (1)
133
120
129
120
North East (2)
28
26
29
25
Mid East (3)
95
94
97
93
South East (4)
186
186
182
175
Total
442
426
437
413
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Homebuilding data:
New order cancellation rate
14.9 %
16.5 %
14.4 %
16.0 %
Lots controlled at end of period
184,400
171,400
Mortgage banking data:
Loan closings
$ 1,354,713
$ 1,555,280
$ 2,407,697
$ 2,988,201
Capture rate
85 %
87 %
84 %
87 %
Common stock information:
Shares outstanding at end of period
2,678,153
2,883,215
Number of shares repurchased
54,716
65,834
144,896
142,954
Aggregate cost of shares repurchased
$ 357,777
$ 471,413
$ 989,733
$ 1,054,807
(1)
Maryland, Virginia, West Virginia, Delaware and Washington, D.C.
(2)
New Jersey and Eastern Pennsylvania
(3)
New York, Ohio, Western Pennsylvania, Indiana and Illinois
(4)
North Carolina, South Carolina, Tennessee, Florida, Georgia and Kentucky
Key Takeaways NVR is expected to post lower earnings and revenues amid a softer housing market.NVR's homebuilding business is likely to have faced pressure as affordability challenges curb buyer demand.NVR is expected to see modest improvement in orders and backlog despite settlement and margin pressure. NVR, Inc. (NVR - Free Report) is expected to report lower earnings in the second quarter of 2026. Homebuilding revenues are also likely to have decreased on a year-over-year basis, given soft demand and margin headwinds.
In the last reported quarter, earnings and homebuilding revenues missed the Zacks Consensus Estimate by 13.4% and 7.9%, respectively. Also, both metrics declined on a year-over-year basis by 29% and 22%.
The company’s earnings beat the consensus mark in three of the last four quarters and missed once, the average surprise being 2.5%.
How Are Estimates Placed for NVR Stock?The Zacks Consensus Estimate for the to-be-reported quarter’s EPS has increased to $95.80 from $95.20 in the past 30 days. The estimated figure indicates a 11.74% decrease from the year-ago EPS of $108.54.
The consensus mark for revenues is pegged at $2.41 billion, indicating a decrease of 5.6% from the year-ago reported figure of $2.55 billion.
Factors Likely to Shape NVR’s Q2 ResultsNVR's second-quarter Homebuilding revenues are expected to have remained under pressure as elevated mortgage rates and higher homeownership costs are likely to have continued to limit affordability across many markets. Affordability challenges, coupled with cautious consumer sentiment, are expected to have delayed purchase decisions and moderated buyer demand during the quarter. The company is also likely to have maintained elevated sales incentives to support demand amid the challenging housing environment.
Our model predicts Homebuilding revenues (which accounted for 97.8% of total revenues in 2025) to decline 5.5% year over year to $2.41 billion in the to-be-reported quarter. For the quarter to be reported, we anticipate total settlements to decrease 6.7% to 5,107 units on a year-over-year basis.
The company's bottom line is expected to have decreased year over year in the quarter as elevated sales incentives are likely to have weighed on profitability. At the same time, higher lot, labor and building materials costs are expected to have increased construction expenses, creating additional pressure on homebuilding margins. We expect the homebuilding gross margin to be 18.3%, down 320 basis points year over year.
Our model predicts total new orders to increase slightly by 0.8% year over year to 5,421 units. The backlog is currently pegged at 10,484 units, which indicates an increase from 10,069 units reported a year ago. We expect the value of the backlog to be $4.77 billion, implying a slight increase from $4.75 billion in the corresponding year-ago quarter.
What the Zacks Model Unveils for NVROur proven model does not conclusively predict an earnings beat for NVR for the quarter to be reported. The company does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
NVR’s Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
NVR’s Zacks Rank: NVR currently carries a Zacks Rank #3 (Hold).
Stocks With the Favorable CombinationHere are some companies in the Zacks Construction sector that, according to our model, have the right combination of elements to post an earnings beat in the quarter to be reported.
Dycom Industries, Inc. (DY - Free Report) currently has an Earnings ESP of +0.47% and sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
With the average surprise being 25%, Dycom’s earnings beat estimates in the last four quarters. Dycom’s earnings for the to-be-reported quarter are expected to increase 39.3%.
Owens Corning (OC - Free Report) has an Earnings ESP of +1.66% and a Zacks Rank of 3 at present.
For the quarter to be reported, Owens Corning’s earnings are expected to decline 27.3%. OC’s earnings beat estimates in three of the last four quarters and missed on one occasion, the average surprise being 3.8%.
United Rentals (URI - Free Report) currently has an Earnings ESP of +1.39% and a Zacks Rank of 2.
The company’s earnings beat estimates in one of the trailing four quarters and missed on the other three occasions, the average negative surprise being 1.5%. United Rentals’ earnings for the quarter are expected to increase 11.5%.
Investors looking for stocks in the Building Products - Home Builders sector might want to consider either Meritage Homes (MTH) or NVR (NVR). But which of these two stocks is more attractive to value investors?
Analyst’s Disclosure: I/we have a beneficial long position in the shares of LEN, BRK.B, BRK.A, SPY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
NVR (NVR) witnessed a jump in share price last session on above-average trading volume. The latest trend in earnings estimate revisions for the stock doesn't suggest further strength down the road.
Investors interested in stocks from the Building Products - Home Builders sector have probably already heard of Persimmon Plc (PSMMY - Free Report) and NVR (NVR - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Persimmon Plc has a Zacks Rank of #2 (Buy), while NVR has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that PSMMY likely has seen a stronger improvement to its earnings outlook than NVR has recently. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
PSMMY currently has a forward P/E ratio of 10.21, while NVR has a forward P/E of 16.99. We also note that PSMMY has a PEG ratio of 1.36. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. NVR currently has a PEG ratio of 4.69.
Another notable valuation metric for PSMMY is its P/B ratio of 0.94. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, NVR has a P/B of 5.07.
These metrics, and several others, help PSMMY earn a Value grade of A, while NVR has been given a Value grade of C.
PSMMY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that PSMMY is likely the superior value option right now.
HomeIndustriesConstruction/Real EstateThe Ratings GameThe Ratings GameSeaport analyst says the ‘bottoming process’ they previously saw appears to have come undone due to the weak outlook for job growthPublished: April 7, 2026 at 10:15 a.m. ET
A Seaport analyst has turned bearish on multiple home-builder stocks, saying the outlook for job growth could be worse for the housing market over the long term than the recent jump in oil prices. Photo: Getty ImagesShares of home builders were losing ground in early Tuesday trading after a Seaport analyst downgraded all the stocks he covered, giving up on his previous view that housing demand was starting to bottom.
Wall Street has been focused on the recent surge in oil and gasoline prices, which reduces the buying power of potential home buyers, but that’s not the main reason for analyst Kenneth Zener’s U-turn on home builders. What undermines the view that demand for new homes was stabilizing, he said, is data showing that job growth has been weak and that the break-even employment rate — the hiring needed to offset job losses — appears to be in long-term decline.
One problem with lowering the cost of capital is when you have to raise it. That's the overly simplistic issue pitting prospective homebuyers against a market with a chronic lack of supply.
Mortgage rates may not be high by historical standards. But compared to the last 15 years, many would-be homebuyers are priced out. As of April 14, the 10-year Treasury note shows no signs of relief. It acts as a spread for the 30-year fixed mortgage.
This stings after the Great Relocation of 2020–2021, when homes changed hands at breakneck speed and record prices. Today, few homeowners are willing to trade a 3% mortgage for one near 7%.
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That lock-in effect has frozen existing inventory. New construction is often the only housing available. For risk-tolerant investors, that creates a real, if nuanced, opportunity. But first, it’s important to understand the nature of the crisis.
The Supply Crisis That Won't Fix Itself Before examining individual stocks, the macro backdrop matters. The U.S. housing supply gap widened to an estimated 4.03 million homes in 2025. That figure has grown every year for over a decade.
The White House economists estimate the shortage could be as large as 10 million homes. The gap reflects years of underbuilding, zoning restrictions, and labor shortages. None of those issues can be resolved quickly.
Even under an optimistic scenario—construction up 50%, pent-up demand fully absorbed—closing the gap takes roughly seven years. That's a long structural tailwind for builders and something that investors can profit from.
There's also a generational demand reservoir building. An estimated 1.82 million Millennial and Gen Z households were "missing" in 2025. High costs have delayed their entry into the market. That demand doesn't disappear. It waits.
Why High Rates Are a Double-Edged Sword for Builders Here's the counterintuitive core of this story. The same rates that crush affordability are also keeping existing homeowners in place. Sellers don't want to trade a 3% mortgage for 7%. So they stay put.
That freeze drains resale inventory. It pushes buyers who can still qualify toward new construction. Builders become the only game in town. Now here are three stocks to consider.
D.R. Horton (DHI): Built for This Market D.R. Horton NYSE: DHI is the largest homebuilder in the U.S. by volume. Its focus on entry-level, affordably priced homes is precisely what this market demands most. That positioning is not an accident.
D.R. Horton Today
$153.99 +7.28 (+4.96%)
As of 06/11/2026 03:59 PM Eastern
This is a fair market value price provided by Massive. Learn more.
52-Week Range$119.54▼
$184.54Dividend Yield1.17%
P/E Ratio14.43
Price Target$168.54
D.R. Horton's strategy is often summarized as "pace over price." The company would rather offer incentives to keep inventory moving than hold out for peak margins. In a high-rate, affordability-constrained market, that philosophy works.
DHI operates in-house mortgage and financial services divisions. These allow it to fund rate buydowns directly. It captures buyers who otherwise couldn't qualify at prevailing market rates. Smaller builders simply can't compete with that.
The company's three-to-five-year earnings per share (EPS) growth rate is pegged near 18%. That suggests the market may be underpricing the durability of its model. The primary risk is sustained high rates pushing buydown costs higher and compressing margins further into 2027.
Lennar (LEN): Pivoting to Asset-Light at Scale Lennar Corp. NYSE: LEN is executing one of the most deliberate strategic pivots in the sector. It is actively moving toward an asset-light model. LEN offloads land development to third-party entities to reduce balance sheet exposure.
Lennar Today
$94.95 +5.10 (+5.68%)
As of 06/11/2026 03:59 PM Eastern
This is a fair market value price provided by Massive. Learn more.
52-Week Range$81.18▼
$144.24Dividend Yield2.11%
P/E Ratio13.64
Price Target$97.27
In Q1 2026, Lennar delivered 16,863 homes, down 5% year-over-year. But new orders rose 1% to 18,515 homes. That order growth matters. It signals demand is holding even as the company reshapes its cost structure.
The concern is incentive spending. Lennar has been allocating roughly 14% of its sales price to mortgage rate buydowns and closing cost assistance. That preserves volume. It also compresses margins.
If rates remain elevated through late 2026, that incentive load may have to climb higher still. Investors should watch gross margin trends closely each quarter.
Lennar's scale gives it staying power. But this is a transition story, and transitions carry risk.
NVR Inc.: The Capital Efficiency Blueprint NVR Inc. NYSE: NVR is architecturally different from its two larger peers. It owns almost no land outright. Instead, it controls lots through options contracts, which give it the right, but not the obligation, to buy.
NVR Today
$6,470.01 +164.97 (+2.62%)
As of 06/11/2026 04:00 PM Eastern
52-Week Range$5,501.01▼
$8,618.28P/E Ratio15.77
Price Target$7,649.33
That distinction is everything. If market conditions deteriorate, NVR walks away from an option and loses only a small fee. D.R. Horton and Lennar, holding owned land, face a much steeper cost of being wrong.
That model produces exceptional capital returns. NVR posted a sector-leading return on equity of 34.7% in 2025, which was nearly double the industry average. Berkshire Hathaway has held a long-term stake in NVR, a signal of confidence in the model's durability.
The tradeoffs are real. NVR's geographic concentration in the Mid-Atlantic and Midwest limits its exposure to the high-growth Sun Belt markets. NVR has a premium valuation, trading around 15x earnings versus the sector's 10–12x average. That leaves less margin for error. However, for investors who prioritize capital efficiency over growth, NVR remains the sector's gold standard.
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NVR (NVR - Free Report) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended March 2026. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.
The earnings report might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.
While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.
Zacks Consensus EstimateThis homebuilder is expected to post quarterly earnings of $78.25 per share in its upcoming report, which represents a year-over-year change of -17.5%.
Revenues are expected to be $1.99 billion, down 15.2% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 1.91% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for NVR?For NVR, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +2.39%.
On the other hand, the stock currently carries a Zacks Rank of #4.
So, this combination makes it difficult to conclusively predict that NVR will beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that NVR would post earnings of $104.96 per share when it actually produced earnings of $121.54, delivering a surprise of +15.80%.
Over the last four quarters, the company has beaten consensus EPS estimates three times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
NVR doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Expected Results of an Industry PlayerAnother stock from the Zacks Building Products - Home Builders industry, PulteGroup (PHM - Free Report) , is soon expected to post earnings of $1.8 per share for the quarter ended March 2026. This estimate indicates a year-over-year change of -30%. Revenues for the quarter are expected to be $3.38 billion, down 13% from the year-ago quarter.
The consensus EPS estimate for PulteGroup has remained unchanged over the last 30 days. However, a higher Most Accurate Estimate has resulted in an Earnings ESP of +1.48%.
This Earnings ESP, combined with its Zacks Rank #4 (Sell), makes it difficult to conclusively predict that PulteGroup will beat the consensus EPS estimate. The company beat consensus EPS estimates in each of the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
, /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its first quarter ended March 31, 2026 of $198.4 million, or $67.76 per diluted share. Net income and diluted earnings per share for the first quarter ended March 31, 2026 decreased 34% and 29%, respectively, when compared to 2025 first quarter net income of $299.6 million, or $94.83 per diluted share. Consolidated revenues for the first quarter of 2026 totaled $1.88 billion, which decreased 22% from $2.40 billion in the first quarter of 2025.
Homebuilding
New orders in the first quarter of 2026 increased by 7% to 5,738 units, when compared to 5,345 units in the first quarter of 2025. The average sales price of new orders in the first quarter of 2026 was $440,100, a decrease of 2% when compared with the first quarter of 2025. The cancellation rate in the first quarter of 2026 was 14% compared to 16% in the first quarter of 2025. Settlements in the first quarter of 2026 decreased by 22% to 4,015 units, compared to 5,133 units in the first quarter of 2025. The decrease in settlements was primarily attributable to a 15% lower backlog balance of homes sold but not settled entering the first quarter of 2026 compared to the same period in 2025. The average settlement price in the first quarter of 2026 was $457,000, which remained relatively flat when compared to the first quarter of 2025. As of March 31, 2026 our backlog of homes totaled 10,171 units, which was flat compared to March 31, 2025, while the dollar value of backlog declined 3% to $4.70 billion.
Homebuilding revenues of $1.83 billion in the first quarter of 2026 decreased by 22% compared to homebuilding revenues of $2.35 billion in the first quarter of 2025. Gross profit margin in the first quarter of 2026 decreased to 19.6%, compared to 21.9% in the first quarter of 2025. Gross profit margin was negatively impacted by continued pricing pressure and higher lot costs. Income before tax from the homebuilding segment totaled $224.6 million in the first quarter of 2026, a decrease of 39% when compared to the first quarter of 2025.
Mortgage Banking
Mortgage closed loan production in the first quarter of 2026 totaled $1.05 billion, a decrease of 27% when compared to the first quarter of 2025. Income before tax from the mortgage banking segment totaled $27.1 million in the first quarter of 2026, a decrease of 17% when compared to $32.5 million in the first quarter of 2025.
Effective Tax Rate
Our effective tax rate for the three months ended March 31, 2026 was 21.2% compared to 25.5% for the three months ended March 31, 2025. The decrease in the effective tax rate in the first quarter of 2026 was primarily attributable to a higher income tax benefit recognized for excess tax benefits from stock option exercises, which totaled $12.6 million and $2.7 million for the three months ended March 31, 2026 and March 31, 2025, respectively.
About NVR
NVR, Inc. operates in two business segments: homebuilding and mortgage banking. The homebuilding segment sells and builds homes under the Ryan Homes, NVHomes and Heartland Homes trade names, and operates in thirty-seven metropolitan areas in sixteen states and Washington, D.C. For more information about NVR, Inc. and its brands, see www.nvrinc.com, www.ryanhomes.com, www.nvhomes.com and www.heartlandluxuryhomes.com.
Some of the statements in this release made by the Company constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as "believes," "expects," "may," "will," "should," "could," or "anticipates" or the negative thereof or other comparable terminology. All statements other than of historical facts are forward-looking statements. Forward-looking statements contained in this document may include those regarding market trends, NVR's financial position and financial results, business strategy, the outcome of pending litigation, investigations or similar contingencies, and projected plans and objectives of management for future operations. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance of NVR to be materially different from future results, performance or achievements expressed or implied by the forward-looking statements. Such risk factors include, but are not limited to the following: general economic and business conditions (on both a national and regional level); interest rate changes; access to suitable financing by NVR and NVR's customers; increased regulation in the mortgage banking industry; the ability of our mortgage banking subsidiary to sell loans it originates into the secondary market; competition; the availability and cost of land and other raw materials used by NVR in its homebuilding operations; shortages of labor; the economic impact of a major epidemic or pandemic; weather related slow-downs; building moratoriums; governmental regulation; fluctuation and volatility of stock and other financial markets; mortgage financing availability; and other factors over which NVR has little or no control. NVR undertakes no obligation to update such forward-looking statements except as required by law.
NVR, Inc.
Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
Three Months Ended March 31,
2026
2025
Homebuilding:
Revenues
1,834,879
$ 2,350,445
Other income
28,049
26,712
Cost of sales
(1,474,539)
(1,835,375)
Selling, general and administrative
(156,971)
(165,117)
Interest expense
(6,854)
(7,181)
Homebuilding income
224,564
369,484
Mortgage Banking:
Mortgage banking fees
46,184
52,587
Interest income
3,629
3,806
Other income
777
1,093
General and administrative
(23,127)
(24,693)
Interest expense
(333)
(273)
Mortgage banking income
27,130
32,520
Income before taxes
251,694
402,004
Income tax expense
(53,335)
(102,428)
Net income
$ 198,359
$ 299,576
Basic earnings per share
$ 71.33
$ 100.41
Diluted earnings per share
$ 67.76
$ 94.83
Basic weighted average shares outstanding
2,781
2,984
Diluted weighted average shares outstanding
2,928
3,159
NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
March 31, 2026
December 31, 2025
ASSETS
Homebuilding:
Cash and cash equivalents
$ 1,645,786
$ 1,883,844
Restricted cash
40,606
34,348
Receivables
35,423
32,742
Inventory:
Lots and housing units, covered under sales agreements with customers
1,652,220
1,410,695
Unsold lots and housing units
244,499
252,029
Land under development
19,433
39,312
Building materials and other
22,358
21,524
1,938,510
1,723,560
Contract land deposits, net
938,981
851,458
Property, plant and equipment, net
100,899
103,770
Operating lease right-of-use assets
108,985
110,535
Other assets
335,331
349,306
5,144,521
5,089,563
Mortgage Banking:
Cash and cash equivalents
36,281
32,642
Restricted cash
7,014
6,047
Mortgage loans held for sale, net
287,475
571,596
Property and equipment, net
7,892
7,727
Operating lease right-of-use assets
23,035
23,953
Other assets
79,560
125,402
441,257
767,367
Total assets
$ 5,585,778
$ 5,856,930
NVR, Inc.
Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)
(unaudited)
March 31, 2026
December 31, 2025
LIABILITIES AND SHAREHOLDERS' EQUITY
Homebuilding:
Accounts payable
$ 332,321
$ 259,244
Accrued expenses and other liabilities
374,987
376,976
Customer deposits
273,422
249,210
Operating lease liabilities
116,040
117,589
Senior notes
908,662
909,160
2,005,432
1,912,179
Mortgage Banking:
Accounts payable and other liabilities
61,162
53,738
Operating lease liabilities
25,150
26,144
86,312
79,882
Total liabilities
2,091,744
1,992,061
Commitments and contingencies
Shareholders' equity:
Common stock, $0.01 par value; 60,000,000 shares authorized; 20,555,330 shares issued as of both March 31, 2026 and December 31, 2025
206
206
Additional paid-in capital
3,202,642
3,155,367
Deferred compensation trust – 106,697 shares of NVR, Inc. common stock as of both March 31, 2026 and December 31, 2025
(16,710)
(16,710)
Deferred compensation liability
16,710
16,710
Retained earnings
16,585,128
16,386,769
Less treasury stock at cost – 17,823,503 and 17,755,943 shares as of March 31, 2026 and December 31, 2025, respectively
(16,293,942)
(15,677,473)
Total shareholders' equity
3,494,034
3,864,869
Total liabilities and shareholders' equity
$ 5,585,778
$ 5,856,930
NVR, Inc.
Operating Activity
(dollars in thousands)
(unaudited)
Three Months Ended March 31,
2026
2025
Units
Average
Price
Units
Average
Price
New orders, net of cancellations:
Mid Atlantic (1)
1,917
$ 499.3
1,866
$ 514.5
North East (2)
469
$ 612.0
377
$ 695.0
Mid East (3)
1,183
$ 425.3
1,098
$ 419.9
South East (4)
2,169
$ 358.8
2,004
$ 356.3
Total
5,738
$ 440.1
5,345
$ 448.5
Three Months Ended March 31,
2026
2025
Units
Average
Price
Units
Average
Price
Settlements:
Mid Atlantic (1)
1,418
$ 520.4
2,050
$ 527.9
North East (2)
366
$ 657.1
471
$ 613.2
Mid East (3)
722
$ 430.0
1,013
$ 407.1
South East (4)
1,509
$ 361.7
1,599
$ 354.6
Total
4,015
$ 457.0
5,133
$ 457.9
As of March 31,
2026
2025
Units
Average
Price
Units
Average
Price
Backlog:
Mid Atlantic (1)
3,659
$ 515.7
3,884
$ 535.7
North East (2)
1,076
$ 625.6
961
$ 694.4
Mid East (3)
2,094
$ 431.4
2,130
$ 422.6
South East (4)
3,342
$ 369.6
3,190
$ 372.9
Total
10,171
$ 462.0
10,165
$ 475.9
NVR, Inc.
Operating Activity (Continued)
(dollars in thousands)
(unaudited)
Three Months Ended March 31,
2026
2025
Average active communities:
Mid Atlantic (1)
124
120
North East (2)
31
24
Mid East (3)
99
93
South East (4)
178
164
Total
432
401
Three Months Ended March 31,
2026
2025
Homebuilding data:
New order cancellation rate
14 %
16 %
Lots controlled at end of period
181,700
167,600
Mortgage banking data:
Loan closings
$ 1,052,984
$ 1,432,922
Capture rate
83 %
86 %
Common stock information:
Shares outstanding at end of period
2,731,827
2,944,615
Number of shares repurchased
90,180
77,120
Aggregate cost of shares repurchased
$ 631,956
$ 583,394
(1)
Maryland, Virginia, West Virginia, Delaware and Washington, D.C.
(2)
New Jersey and Eastern Pennsylvania
(3)
New York, Ohio, Western Pennsylvania, Indiana and Illinois
(4)
North Carolina, South Carolina, Tennessee, Florida, Georgia and Kentucky
NVR (NVR - Free Report) came out with quarterly earnings of $67.76 per share, missing the Zacks Consensus Estimate of $78.25 per share. This compares to earnings of $94.83 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of -13.41%. A quarter ago, it was expected that this homebuilder would post earnings of $104.96 per share when it actually produced earnings of $121.54, delivering a surprise of +15.8%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
NVR, which belongs to the Zacks Building Products - Home Builders industry, posted revenues of $1.83 billion for the quarter ended March 2026, missing the Zacks Consensus Estimate by 7.93%. This compares to year-ago revenues of $2.35 billion. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
NVR shares have lost about 4.9% since the beginning of the year versus the S&P 500's gain of 3.2%.
What's Next for NVR?While NVR has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for NVR was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $100.59 on $2.42 billion in revenues for the coming quarter and $402.87 on $9.63 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Building Products - Home Builders is currently in the bottom 10% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
One other stock from the same industry, Smith Douglas Homes Corp. (SDHC - Free Report) , is yet to report results for the quarter ended March 2026. The results are expected to be released on April 29.
This company is expected to post quarterly earnings of $0.05 per share in its upcoming report, which represents a year-over-year change of +133.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Smith Douglas Homes Corp.'s revenues are expected to be $199.2 million, down 11.4% from the year-ago quarter.
Is NVR Inc. (NVR) Still Undervalued After Q1 2026 Miss? EPS $67.76 (miss vs. $79.53 est.), Revenue $1.88B (miss vs. $2.069B est.); GF Score 87/100, 13.3% Undervalued Orders improved, settlements declined, and margins compressed amid pricing pressure and higher lot costs
Q1 2026 revenue was $1.88 billion, down 22% year over year.Diluted EPS was $67.76, down 29% year over year.EPS of $67.76 was below the $79.53 analyst estimate.Revenue of $1.88 billion was below the $2.069 billion analyst estimate.New orders were 5,738 units, up 7% year over year.Settlements were 4,015 units, down 22% year over year.Homebuilding gross margin was 19.6%, down from 21.9% a year ago.Backlog stood at 10,171 units (flat), with backlog value at $4.70 billion (down 3%).Share repurchases totaled 90,180 shares for $631.96 million in Q1. On April 22, 2026, NVR Inc NVR released its 8-K filing reporting first-quarter 2026 results. Net income was $198.4 million, or $67.76 per diluted share, compared with $299.6 million, or $94.83 per diluted share, in the prior-year period. Consolidated revenue was $1.88 billion, down from $2.40 billion a year earlier.
NVR Inc NVR is engaged in the construction and sale of residential properties, including single-family detached homes, townhomes, and condominium buildings, built on a pre-sold basis. The company also provides mortgage banking and title services. Its operating segments are Homebuilding and Mortgage Banking. Geographically, it serves the Mid Atlantic, North East, Mid East, and South East regions of the U.S. The majority of revenue is derived from the Homebuilding Mid Atlantic segment, which includes Maryland, Virginia, West Virginia, Delaware, and Washington, D.C.
Quarterly performance versus expectations Diluted EPS of $67.76 was below the $79.53 analyst estimate. Revenue of $1.88 billion was below the $2.069 billion analyst estimate. Year over year, net income decreased 34% and diluted EPS decreased 29%, reflecting lower settlements and margin compression.
Homebuilding revenue declined 22% to $1.83 billion. Homebuilding income before taxes fell 39% to $224.6 million. Mortgage banking income before taxes decreased 17% to $27.1 million as closed loan production dropped 27% to $1.05 billion.
Homebuilding and demand indicators New orders rose 7% to 5,738 units. The average sales price of new orders decreased 2% to $440,100. The cancellation rate was 14%, down from 16% a year ago, indicating slightly better buyer follow-through. Settlements fell 22% to 4,015 units, driven by a lower entering backlog. Management noted:
The decrease in settlements was primarily attributable to a 15% lower backlog balance of homes sold but not settled entering the first quarter of 2026 compared to the same period in 2025.Backlog units ended the quarter at 10,171 (flat year over year), while backlog value declined 3% to $4.70 billion. Average active communities increased to 432 from 401, and lots controlled rose to 181,700 from 167,600—both supportive of future capacity. The average settlement price was $457,000, relatively flat versus last year.
Homebuilding gross profit margin contracted to 19.6% from 21.9%, with the filing stating:
Gross profit margin was negatively impacted by continued pricing pressure and higher lot costs.Mortgage banking trends Mortgage closed loan production totaled $1.05 billion, down 27% year over year, consistent with lower settlements and a still-challenging rate environment for buyers. The capture rate was 83%, down from 86% in the prior year period. Income before taxes from Mortgage Banking declined 17% to $27.1 million.
Financial statements and capital allocation The effective tax rate was 21.2%, down from 25.5% in the prior-year quarter, aided by stock-option related tax benefits:
The decrease in the effective tax rate in the first quarter of 2026 was primarily attributable to a higher income tax benefit recognized for excess tax benefits from stock option exercises, which totaled $12.6 million and $2.7 million for the three months ended March 31, 2026 and March 31, 2025, respectively.Cash and cash equivalents in the Homebuilding segment were $1.65 billion at March 31, 2026, compared with $1.88 billion at December 31, 2025. Mortgage loans held for sale were $287.5 million, down from $571.6 million at year-end. Total liabilities were $2.09 billion, up from $1.99 billion at year-end, and shareholders’ equity was $3.49 billion, down from $3.86 billion, reflecting significant share repurchases.
NVR repurchased 90,180 shares during the quarter for an aggregate cost of $631.96 million. Diluted weighted average shares outstanding decreased to 2.928 million from 3.159 million a year earlier, which partially offsets EPS pressure in a down revenue environment.
Metric Q1 2026 Q1 2025 Change / Notes Consolidated Revenue $1.88B $2.40B -22% Net Income $198.4M $299.6M -34% Diluted EPS $67.76 $94.83 -29% Homebuilding Revenue $1.83B $2.35B -22% Homebuilding Gross Margin 19.6% 21.9% -230 bps Homebuilding Income (Pre-Tax) $224.6M $369.5M -39% Mortgage Closed Loan Production $1.05B $1.43B -27% Mortgage Banking Income (Pre-Tax) $27.1M $32.5M -17% New Orders (Units) 5,738 5,345 +7% New Order ASP $440,100 $448,500 -2% Settlements (Units) 4,015 5,133 -22% Cancellation Rate 14% 16% Improved Backlog (Units) 10,171 10,165 Flat Backlog (Dollar Value) $4.70B — -3% YoY Effective Tax Rate 21.2% 25.5% Lower Shares Repurchased 90,180 77,120 HigherWhy these metrics matter to homebuilding Orders and cancellation rates are leading indicators of future settlements and revenue. The 7% order growth and lower cancellations suggest stable underlying demand. However, flat unit backlog and a 3% decline in backlog value point to limited near-term growth if conversion does not accelerate. Gross margin compression to 19.6% reflects pricing pressure and higher lot costs, which directly affect profitability in a cost-sensitive, cyclical industry. Active communities and lots controlled (181,700) underpin future land supply and volume potential. In Mortgage Banking, production, capture rate, and gain-on-sale economics influence segment earnings and complement the core homebuilding cycle.
Analysis NVR Inc NVR missed consensus on both revenue and EPS as fewer settlements and lower gross margins outweighed an improving order trend. The mix of higher active communities and increased lots controlled positions the company to meet demand, yet conversion from backlog remains the key swing factor after a 22% decline in settlements. Margin headwinds from pricing and lot costs pressured profitability, while mortgage production fell alongside lower home closings. A lower tax rate provided a partial offset. Robust buybacks reduced the share count and supported per-share results, but the pace of repurchases also lowered shareholders’ equity.
GuruFocus Valuation Check Based on GuruFocus’s proprietary model, the GF Value for NVR Inc NVR is $7,677.14 versus a current price of $6,655.07, indicating the shares appear 13.3% undervalued. This suggests a margin of safety according to the GF Value framework.
The company’s GF Score is 87/100, which is considered strong. Financial Strength is 9/10 and Profitability Rank is 9/10, underscoring a solid balance sheet and consistent earnings power typical of high-quality operators in homebuilding. Growth Rank is 6/10, pointing to moderate expansion prospects, while a 5-star Predictability rating highlights a historically stable performance pattern. A Moat Score of 6/10 implies notable competitive advantages, albeit in a cyclical and competitive industry.
Insider Activity shows insiders sold $9.0 million over the last three months with no reported buying, which is a data point that may warrant caution for some investors. For a deeper dive, visit the NVR Inc stock page on GuruFocus.
Explore the complete 8-K earnings release (here) from NVR Inc for further details.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Key Takeaways NVR's Q1 EPS fell 29% to $67.76 and homebuilding revenues fell 22% to $1.83B, missing estimates.Settlements dropped 21.8% to 4,015 units as the opening backlog was 15% lower; gross margin fell to 19.6%.Orders rose 7% and cancellations eased to 14%, but mortgage loan production slid 27% to $1.05B. NVR, Inc. (NVR - Free Report) reported first-quarter fiscal 2026 results, with earnings and Homebuilding revenues missing the Zacks Consensus Estimate. Both earnings and Homebuilding revenues also declined on a year-over-year basis.
The first-quarter results reflect a period of resilient demand tempered by significant operational and cost-related headwinds. On the positive side, the company saw a healthy uptick in new orders and a favorable decrease in cancellation rates, suggesting sustained buyer interest.
However, these gains were largely offset by a lower opening backlog, which constrained settlement volumes and drove a significant decline in homebuilding revenues. Profitability in the segment was further impacted by continued pricing pressure and elevated lot costs, leading to margin compression. Performance was also weighed down by lower loan production and a reduced capture rate within the mortgage banking segment, alongside broader industry obstacles.
Following the results, NVR stock declined 4.7% during yesterday’s trading hours.
Inside NVR’s Q1 HeadlinesDiluted earnings were $67.76 per share, down 29% from $94.83 a year ago and missing the Zacks Consensus Estimate of $78.25 by 13.4%.
Homebuilding revenues of $1.83 billion also missed the consensus mark of $1.99 billion by 7.9%. Consolidated revenues (Homebuilding & Mortgage Banking fees combined) amounted to $1.88 billion, down 22% on a year-over-year basis. Results reflected a sharp decline in homebuilding settlements, partially offset by stronger order activity and a lower cancellation rate.
Segment Details of NVR
NVR Sees Homebuilding Setbacks From Fewer ClosingsHomebuilding remained the central swing factor. Segment revenues decreased 22% year over year due to settlements declining 21.8% to 4,015 units from 5,133 units in the prior-year quarter. Management attributed the decline largely to a 15% lower backlog entering the quarter versus the comparable period last year. Our model predicted settlements to decline 12.6% year over year to 4,488 units. The average selling price (ASP) for settlements remained flat year over year at $457,000. Our estimate for the metric was $450,800.
Margin performance also tightened. Homebuilding gross profit margin fell to 19.6% from 21.9% a year ago, pressured by continued pricing pressure and higher lot costs. Our estimate for the metric was 18.9%. As a result, homebuilding income fell to $224.6 million from $369.5 million in the prior-year quarter.
Mortgage Banking Slows With Lower Loan VolumeMortgage banking results moderated as origination volume declined. Mortgage closed loan production totaled $1.05 billion, down 27% year over year, reflecting weaker volume flowing through the channel. Mortgage banking income before taxes decreased 17% to $27.1 million from $32.5 million a year ago.
Fee revenues also moved lower. Mortgage banking fees were $46.2 million versus $52.6 million in the year-ago quarter. The capture rate was 83% compared with 86% a year earlier, indicating a modest decline in the share of homebuyers using NVR’s mortgage platform.
NVR Shows Better Orders, Lower Cancellations in Q1While deliveries were down, demand signals improved in key measures. New orders increased 7% year over year to 5,738 units, and the cancellation rate improved to 14% from 16% a year ago. The ASP of new orders was $440,100, down 2% from the prior-year quarter. Our model predicted the ASP of new orders at $476,600.
Backlog stability was another constructive indicator. As of March 31, 2026, backlog totaled 10,171 units, essentially flat versus March 31, 2025, though the dollar value of backlog declined 3% to $4.7 billion. NVR also reported average active communities of 432, up from 401 in the prior-year period, supporting a broader selling footprint despite the near-term settlement decline.
NVR Maintains Liquidity While Continuing Share RepurchasesBalance sheet liquidity remained meaningful, though cash balances declined from year-end levels. Homebuilding cash and cash equivalents were $1.65 billion on March 31, 2026, versus $1.88 billion as of Dec. 31, 2025. Mortgage banking cash and cash equivalents were $36.3 million versus $32.6 million at year-end.
Capital return activity continued at a sizable pace. During the first quarter of fiscal 2026, NVR repurchased 90,180 shares at an aggregate cost of $632 million. Shares outstanding at quarter end were 2,731,827, reflecting ongoing share count reduction alongside a housing market backdrop that remained challenging for near-term volumes.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
D.R. Horton (DHI - Free Report) delivered second-quarter fiscal 2026 results with earnings beating the Zacks Consensus Estimate but revenues missing the same. The quarter was marked by an 11% jump in net sales orders and progress in tightening finished inventory, even as affordability constraints kept incentives elevated.
D.R. Horton updated fiscal 2026 consolidated revenue guidance to $33.5-$34.5 billion compared with the prior expectation of $33.5-$35 billion. This compares with $34.25 billion in fiscal 2025. It now expects homebuilding closings of 86,000-87,500 homes compared with the earlier guidance of 86,000-88,000. This compares with 84,863 in fiscal 2025.
KB Home (KBH - Free Report) reported first-quarter fiscal 2026 results. The company’s quarterly earnings came in line with the Zacks Consensus Estimate, while total revenues missed the same. Both metrics decreased on a year-over-year basis.
For the second quarter of fiscal 2026, KB Home is expecting housing revenues to be in the $1.05-$1.15 billion band, down from $1.52 billion reported in the year-ago period. It expects deliveries to be in the range of 2,250-2,450 homes compared with 3,120 homes delivered in the year-ago period.
Lennar Corporation (LEN - Free Report) reported tepid results for the first quarter of fiscal 2026, wherein its adjusted earnings and total revenues missed the Zacks Consensus Estimate and declined year over year.
For the fiscal second quarter, Lennar expects deliveries to be in the range of 20,000-21,000 homes compared with 20,131 homes delivered in the year-ago period. Lennar expects the ASP of the delivered homes to be in the range of $370,000-$375,000, down from $389,000 reported a year ago.
Homebuilders have been going through a rough patch as of late. Across top homebuilding stocks, analysts expected revenues and earnings to fall considerably in Q1 2026, and this is exactly what happened.
For over a year, stocks in this industry have been range-bound. The SPDR S&P Homebuilders ETF NYSEARCA: XHB is a commonly used proxy for this industry, tracking the performance of over 30 homebuilders or housing-related stocks. The fund has delivered an approximate total return of just 5% since the start of 2025. With interest rates still relatively high and housing affordability low, stocks in this space have struggled to gain much momentum.
Three of the top U.S. homebuilders just reported earnings; here’s how they stacked up and what it signals about the industry going forward.
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Pulte’s EPS Falls 30%, Analysts Point to Moderate UpsidePulte Group NYSE: PHM is one of the more diversified U.S. homebuilders targeting a balanced mix of market segments. In Q1, 38% of the company’s sales came from first-time buyers, while “move-up” buyers accounted for 39%. Its “active adult” buyer group, which includes sales in 55+ communities, accounted for 23% of sales.
PulteGroup Today
$123.88 +5.39 (+4.55%)
As of 06/11/2026 03:59 PM Eastern
This is a fair market value price provided by Massive. Learn more.
52-Week Range$98.27▼
$144.49Dividend Yield0.84%
P/E Ratio11.98
Price Target$140.71
Pulte saw its sales fall by 12% year over year (YOY) to $3.41 billion, essentially in line with estimates.
The significant decline came even as the company offered much greater incentives to home buyers. This led to a substantial 310 basis point compression in gross home sales margin.
In turn, adjusted earnings per share (EPS) tanked by just over 30% to $1.79, 1 cent short of estimates. The company’s new orders grew moderately by 3% YOY, similar to the 4% increase seen in Q4 2025, but Pulte did not change its guidance for the full year.
Still, Pulte saw a modest 2.4% gain after its report, indicating that the results were better than some investors had feared.
Several analysts tracked by MarketBeat raised their price targets after the report, with updates averaging around $147. This figure implies healthy upside in shares and is slightly above the MarketBeat consensus price target of around $141.
D.R. Horton Outperforms Against Low Expectations, Targets SpreadHomebuilding behemoth D.R. Horton NYSE: DHI was a clear standout. The company, which focuses on first-time home buyers, posted revenue of $7.56 billion. This marked a moderate 2% YOY drop, roughly in line with expectations and by far the best figure among this group. The firm also posted a solid bottom-line beat, with adjusted EPS of $2.24 versus estimates of $2.15. The figure fell by 13% YOY.
D.R. Horton Today
$153.99 +7.28 (+4.96%)
As of 06/11/2026 03:59 PM Eastern
This is a fair market value price provided by Massive. Learn more.
52-Week Range$119.54▼
$184.54Dividend Yield1.17%
P/E Ratio14.43
Price Target$168.54
Forward-looking metrics were particularly strong, with home orders rising by 11% YOY, the highest rate among these names. The company did slightly lower the top end of its full-year guidance to $34.5 billion, but its midpoint estimate of $34 billion still exceeded estimates.
D.R. Horton also saw considerable margin compression, with the firm’s adjusted home sales gross margin declining by 230 basis points to 19.7%. Overall, these results allowed DHI shares to soar by nearly 6% post-earnings.
The MarketBeat consensus price target near $169 implies only around 5% upside in shares. Notably, all analysts who issued updates after the report raised their price targets; however, updated targets averaged around $165. They also showed significant variance, ranging from $206 to $123. These figures imply upside of more than 25% and downside of more than 20%, respectively.
NVR: Sales Plummet, Order Growth Ticks UpNVR NYSE: NVR sits more in the middle of the market, with its average home selling price coming in at $457,000 in Q1 2026. This was squarely between Pulte’s $542,000 average selling price and D.R. Horton’s $362,000, showing the differences in income among their respective customers.
NVR Today
$6,470.01 +164.97 (+2.62%)
As of 06/11/2026 04:00 PM Eastern
52-Week Range$5,501.01▼
$8,618.28P/E Ratio15.77
Price Target$7,649.33
The company saw its revenues take a 21.7% hit, falling to $1.91 billion. This significantly missed the estimates of $2.09 billion. EPS fell by 28.6% to $67.76, missing estimates of $79.97 by a wide margin. The company’s gross margin compression mirrored D.R. Horton, with the figure falling 230 basis points to 19.6%.
However, like the other two names, new orders saw a moderate increase, rising by 7%. This was an improvement over the 4% increase in the prior quarter. NVR’s average selling price remained flat YOY, while the metric fell by 3% at Pulte and 5% at D.R. Horton. Combined with rising orders, this is a positive sign for NVR, showing that the company isn’t compromising on price to drive demand. Notably, NVR does not provide forward guidance. NVR shares fell 4.7% following the results.
Multiple analysts dropped their targets after the report, with updates averaging approximately $7,465, moderately below the consensus target near $7,650. This updated average target implies just under 15% upside in shares.
Homebuilders Continue to Face a Difficult EnvironmentEarnings across these three names showed a trend: revenue and margin hits across the industry. D.R. Horton was a bright spot, with the lowest sales decline and the highest order growth. Encouragingly, orders rose across all names, but the industry is still in a rut. Price targets remain relatively subdued, but point to upside ahead, indicating a degree of optimism among the analyst community.
Fixed rates on 30-year mortgages briefly fell below 6% prior to the conflict in the Middle East. Rates have since risen back to 6.2%. A clear end to the conflict would be a meaningful positive for homebuilders, likely helping rates approach 6% again, improving demand.
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NVR, Inc. demonstrates resilience amid soft housing markets, leveraging an asset-light model and East Coast focus for sustained profitability. NVR maintains a robust net income margin of 10.4% in Q1 2026, outperforming peers, despite a 21.4% YoY revenue decline. Valuation metrics (P/S 1.87x, P/B 5.09x) indicate NVR is underpriced, with target prices suggesting upside potential.
NVR, Inc. (NVR) is upgraded from Sell to Hold as forward indicators improve, but P&L remains under pressure. Q1 2026 saw new orders rise 7% y/y, community count increase, and cancellations improve, signaling demand stabilization. Despite better forward metrics, revenue fell 22% y/y, gross margin declined 230bps, and homebuilding income before tax dropped 39% y/y.
On April 24, 2026, Magnolia Group, LLC disclosed a sale of 1,170,437 shares of Alliance Resource Partners (ARLP 0.47%), an estimated $30.30 million trade based on quarterly average pricing, according to a new SEC filing.
Alliance Resource Partners, L.P. operates seven mining complexes and manages coal, mineral, and royalty assets across key U.S. basins.
Sold 1,170,437 shares; estimated transaction value $30.30 million (quarterly average pricing)Quarter-end position value decreased $20.95 million, reflecting both share sale and price changesTotal 13F reportable AUM decreased 11.4% quarter over quarter, from $606.51 million to $537.51 millionPost-trade holding: 1,411,260 shares valued at $39.02 millionAlliance Resource Partners, L.P. now accounts for 7.26% of fund AUM, the fund's fifth-largest positionWhat happenedAccording to a SEC filing dated April 24, 2026, Magnolia Group, LLC sold 1,170,437 shares of Alliance Resource Partners, L.P. The estimated transaction value was $30.30 million, based on the mean unadjusted closing price during the 2026 first quarter. The fund's quarter-end position in Alliance Resource Partners, L.P. was valued at $39.02 million, a $20.95 million decrease from the prior quarter, reflecting both trading activity and market price changes.
What else to knowThe April 24, 2026, filing shows a sell transaction; Alliance Resource Partners, L.P. now represents 7.26% of Magnolia Group, LLC's $537.51 million 13F reportable AUM.Top holdings after the filing:NYSE:NNI: $215.23 million (40.0% of AUM)NYSE:BOC: $65.28 million (12.1% of AUM)NYSE:CNR: $63.10 million (11.7% of AUM)NYSE:ABG: $56.28 million (10.5% of AUM)NASDAQ:ARLP: $39.02 million (7.26% of AUM)As of April 23, 2026, Alliance Resource Partners, L.P. shares were priced at $25.23, up 2.4% over the prior year, underperforming the S&P 500 by 29.88 percentage points.Company overviewMetricValueRevenue (TTM)$2.19 billionNet Income (TTM)$311.16 millionDividend Yield9.65%Price (as of market close April 23, 2026)$25.23Company snapshotARLP produces and markets thermal and metallurgical coal, manages coal loading terminals, and owns oil and gas royalty interests; also offers mining technology solutions.Alliance Group generates revenue primarily through coal sales to utilities and industrial users, as well as from leasing mineral rights and providing mining-related services.The company serves electric utilities, industrial customers, and oil & gas operators across the United States.Alliance Resource Partners, L.P. is a leading U.S. natural resource company focused on coal production and mineral leasing, with a diversified portfolio spanning coal mining, royalty interests, and mining technology. The company operates seven underground mining complexes and manages significant coal reserves and mineral rights in key U.S. basins. Its integrated approach and broad customer base provide resilience and scale within the energy sector.
What this transaction means for investorsThe headline number — 1,170,437 shares sold — doesn't tell you much on its own. What matters is the proportion. Magnolia cut its ARLP stake by roughly 45%, dropping from 2,581,697 shares to 1,411,260. That's meaningful in any context, but it's especially notable inside a portfolio that holds only 12 names and concentrates 40% of its $537 million in 13F AUM in a single position. Concentrated funds don't trim casually — every move reshapes the book. Magnolia hasn't said publicly why it sold, so readers shouldn't fill in a thesis. What the filing does show is that this wasn't an isolated coal call. The fund also exited Lamb Weston Holdings (LW +2.20%) entirely, opened a small new position in NVR (NVR +2.77%), and saw total AUM drop about 11% quarter over quarter. The ARLP sale sits inside a wider portfolio reshape rather than standing alone. For investors who watch 13F filings to mirror manager moves, that distinction is the whole game: copying one trade out of a coordinated rebalance is not the same as copying one trade out of an otherwise stable book. The latter implies a thesis change on the stock itself. The former implies the fund is in motion, and the trade you're mirroring may be a portfolio-construction decision rather than a view on the underlying business. Knowing which one you're copying is what separates a useful 13F signal from a noisy one.
The housing market has been nearly frozen since the pandemic.
A combination of high mortgage rates and the "lock-in effect" from low rates during the pandemic has kept existing home sales at unusually low levels and has pushed up home prices as there's not enough inventory for prospective buyers.
As the chart below shows, existing home sales have been hovering around an average annual rate of 4 million, well below the 5.5 million they were at before the pandemic.
US Existing Home Sales data by YCharts
The lack of available homes for sale has created an opportunity for homebuilders, and for a while, they were taking advantage of that, but homebuilder stocks have slumped since peaking in late 2024 as expectations for interest rate cuts only modestly materialized, and a weakening labor market has pressured demand.
Now, homebuilder stocks are falling again as mortgage rates move higher due to the war in Iran.
Image source: Getty Images.
Mortgage rates are going up Mortgage rates hit their highest level since April 3, with rates on the 30-year fixed mortgage rising to 6.45%, according to Mortgage News Daily.
As the blockade of the Strait of Hormuz continues, investors seem to be betting that interest rates are more likely to go up as inflation makes rate cuts less likely from the Fed, and could even persuade the central bank to raise rates.
Mortgage applications jumped 21% from a year ago last week, according to the Mortgage Bankers Association, showing increasing interest in home-buying as the spring season enters its peak.
NYSEMKT: XHBSPDR Series Trust - State Street SPDR S&P Homebuilders ETF
Today's Change
(
4.20
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4.35
Current Price
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107.83
Homebuilder stocks have mostly slipped this week and have had mixed results over the last year.
If you're looking to get exposure to the sector, an easy way to do it is with an ETF like State Street SPDR S&P Homebuilders ETF (XHB +4.20%), which holds homebuilders like D.R. Horton (DHI +5.26%) and Lennar, as well as building materials companies like Owens-Corning and home furnishing companies like Williams-Sonoma, which tend to be exposed to similar forces as homebuilders. The ETF currently trades at a price-to-earnings ratio of 17.5.
Homebuilders that have reported earnings this quarter have mostly delivered middling results. At D.R. Horton, the country's largest homebuilder, revenue fell 2.3% to $7.56 billion, and earnings per share declined as well, even as the company aggressively bought back stock over the last year.
NVR's (NVR +2.77%) revenue declined 22% to $1.88 billion, and Pulte Group (PHM +4.65%) reported a 12% decline in revenue to $3.41 billion.
Considering those results, it's clear that the weakness in the housing market remains, and a surge in homebuilding seems unlikely without lower interest rates, especially with the labor market weak.
Outgoing Fed Chair Jerome Powell was careful to not promise any moves by the Fed, and noted the uncertainty from the war, but some oil executives have said that high prices and disruptions could persist through 2027.
Against that backdrop, homebuilder stocks look set to remain stuck in neutral for the foreseeable future. While there remains a housing shortage in the country, and we could see a surge in home sales and homebuilding if rates come down, that could still be years away.
Resources Investor Relations Journalists Agencies Client Login Send a Release News Products Contact , /PRNewswire/ -- NVR, Inc. (NYSE: NVR) announces that its Board of Directors has authorized the repurchase of up to an aggregate of $750 million of its outstanding common stock. The repurchase authorization does not have an expiration date. The purchases will occur from time to time in the open market and/or in privately negotiated transactions as market conditions permit. The Company indicated that the authorization is a continuation of the stock repurchase program that began in 1994 and is consistent with NVR's strategy of maximizing shareholder value. Consistent with prior authorizations, this new authorization prohibits the Company from purchasing shares from the Company's officers, directors, Profit Sharing/401(k) Plan Trust or Employee Stock Ownership Plan Trust. As of May 7, 2026, NVR had 2,699,292 total shares of common stock outstanding.
About NVR
NVR, Inc. operates in two business segments: homebuilding and mortgage banking. The homebuilding segment sells and builds homes under the Ryan Homes, NVHomes and Heartland Homes trade names, and operates in thirty-seven metropolitan areas in sixteen states and Washington, D.C. For more information about NVR, Inc. and its brands, see www.nvrinc.com, www.ryanhomes.com, www.nvhomes.com and www.heartlandluxuryhomes.com.
Wall Street is rediscovering the stock split playbook. In May 2026, KLA (NASDAQ: KLAC | KLAC Price Prediction) announced a 10-for-1 forward stock split alongside a fiscal Q3 earnings beat and a roughly 21% dividend hike, with shares trading in the $1,800 range.
It has been about a month since the last earnings report for NVR (NVR - Free Report) . Shares have lost about 9.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NVR due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
NVR's Q1 Earnings Miss Estimates, Homebuilding Revenues Down Y/YNVR reported first-quarter fiscal 2026 results, with earnings and Homebuilding revenues missing the Zacks Consensus Estimate. Both earnings and Homebuilding revenues also declined on a year-over-year basis.
The first-quarter results reflect a period of resilient demand tempered by significant operational and cost-related headwinds. On the positive side, the company saw a healthy uptick in new orders and a favorable decrease in cancellation rates, suggesting sustained buyer interest.
However, these gains were largely offset by a lower opening backlog, which constrained settlement volumes and drove a significant decline in homebuilding revenues. Profitability in the segment was further impacted by continued pricing pressure and elevated lot costs, leading to margin compression. Performance was also weighed down by lower loan production and a reduced capture rate within the mortgage banking segment, alongside broader industry obstacles.
Inside NVR’s Q1 HeadlinesEarnings were $67.76 per share, down 29% from $94.83 a year ago and missing the Zacks Consensus Estimate of $78.25 by 13.4%.
Homebuilding revenues of $1.83 billion also missed the consensus mark of $1.99 billion by 7.9%. Consolidated revenues (Homebuilding & Mortgage Banking fees combined) amounted to $1.88 billion, down 22% on a year-over-year basis. Results reflected a sharp decline in homebuilding settlements, partially offset by stronger order activity and a lower cancellation rate.
Segment Details of NVR
NVR Sees Homebuilding Setbacks From Fewer ClosingsHomebuilding remained the central swing factor. Segment revenues decreased 22% year over year due to settlements declining 21.8% to 4,015 units from 5,133 units in the prior-year quarter. Management attributed the decline largely to a 15% lower backlog entering the quarter versus the comparable period last year. Our model predicted settlements to decline 12.6% year over year to 4,488 units. The average selling price (ASP) for settlements remained flat year over year at $457,000. Our estimate for the metric was $450,800.
Margin performance also tightened. Homebuilding gross profit margin fell to 19.6% from 21.9% a year ago, pressured by continued pricing pressure and higher lot costs. Our estimate for the metric was 18.9%. As a result, homebuilding income fell to $224.6 million from $369.5 million in the prior-year quarter.
Mortgage Banking Slows With Lower Loan VolumeMortgage banking results moderated as origination volume declined. Mortgage closed loan production totaled $1.05 billion, down 27% year over year, reflecting weaker volume flowing through the channel. Mortgage banking income before taxes decreased 17% to $27.1 million from $32.5 million a year ago.
Fee revenues also moved lower. Mortgage banking fees were $46.2 million versus $52.6 million in the year-ago quarter. The capture rate was 83% compared with 86% a year earlier, indicating a modest decline in the share of homebuyers using NVR’s mortgage platform.
NVR Shows Better Orders, Lower Cancellations in Q1While deliveries were down, demand signals improved in key measures. New orders increased 7% year over year to 5,738 units, and the cancellation rate improved to 14% from 16% a year ago. The ASP of new orders was $440,100, down 2% from the prior-year quarter. Our model predicted the ASP of new orders at $476,600.
Backlog stability was another constructive indicator. As of March 31, 2026, backlog totaled 10,171 units, essentially flat versus March 31, 2025, though the dollar value of backlog declined 3% to $4.7 billion. NVR also reported average active communities of 432, up from 401 in the prior-year period, supporting a broader selling footprint despite the near-term settlement decline.
NVR Maintains Liquidity While Continuing Share RepurchasesBalance sheet liquidity remained meaningful, though cash balances declined from year-end levels. Homebuilding cash and cash equivalents were $1.65 billion on March 31, 2026, versus $1.88 billion as of Dec. 31, 2025. Mortgage banking cash and cash equivalents were $36.3 million versus $32.6 million at year-end.
Capital return activity continued at a sizable pace. During the first quarter of fiscal 2026, NVR repurchased 90,180 shares at an aggregate cost of $632 million. Shares outstanding at quarter end were 2,731,827, reflecting ongoing share count reduction alongside a housing market backdrop that remained challenging for near-term volumes.
How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a flat trend in estimates review.
The consensus estimate has shifted -5.36% due to these changes.
VGM ScoresCurrently, NVR has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook NVR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
The stock split is back in fashion. Yet a small club of high-priced names has refused to play along for decades, even as peers embrace splits to court retail investors.
Four stand out: AutoZone (NYSE: AZO | AZO Price Prediction) has not split since its 1991 IPO, Goldman Sachs (NYSE: GS) has not split since 2000, NVR (NYSE: NVR) has never split, and TransDigm (NYSE: TDG) has historically returned capital through special dividends. None has announced a split or telegraphed board action. The ranking below counts down from the most entrenched holdout to the one most likely to budge.
4. NVR: The Permanent Holdout The homebuilder carries the highest absolute share price of the four, closing at $6,032.82 on May 26, 2026, with a market cap of roughly $16.3 billion. Q1 2026 was rough: EPS of $67.76 missed the $79.20 consensus estimate, with revenue down 22% year over year and homebuilding settlements off 22%.
CEO Eugene Bredow personally bought 60 shares at $5,776.15 on May 14, 2026, and 80 shares at $6,262.53 on May 6. When insiders happily write four-figure checks per share, splitting the float is not on the agenda. NVR also just authorized a fresh $750 million share buyback. Capital return runs entirely through repurchases.
3. AutoZone: 30+ Years of Stubborn The specialty retailer trades at $3,100.11 a share, down 19.0% over the past year, with a market cap near $51.4 billion and a trailing P/E of 22x. Q3 FY2026 delivered EPS of $38.07 versus $36.17 expected, with revenue up 8.4% year over year.
CEO Phil Daniele has not entertained a split publicly. Capital allocation is all buyback: $586.3 million repurchased in Q3 at $3,582 per share, with $804.2 million remaining. Cumulative buybacks since 1998 hit $38.9 billion, leaving shareholders’ equity negative. There is no dividend program. AutoZone treats a high share price as a deliberate strategic feature. The case for a split is purely cosmetic; the case against it is institutional inertia.
2. TransDigm: The Special-Dividend School The aerospace manufacturer’s stock closed at $1,226, with a market cap of $68.6 billion and a forward P/E of 38x. Q2 FY2026 was strong: adjusted EPS of $9.85 versus $9.31 expected, revenue up 18.3% year over year, and EBITDA margin of 52.6%. Management raised FY2026 guidance to sales of $10.30 billion to $10.42 billion.
TransDigm’s identity centers on M&A and large one-time special dividends over retail-friendly optics. CEO Mike Lisman is busy closing deals, including the recently completed $2.20 billion Jet Parts Engineering and Victor Sierra acquisition, and the pending $960 million Stellant transaction. The lowest share price of the four softens any urgency. A split is conceivable only if leadership decides to court a broader retail base, which is not the current playbook.
1. Goldman Sachs: The Most Plausible Candidate Goldman Sachs closed at $994.52, up 66.2% over the past year, with a market cap of roughly $293 billion. Q4 2025 delivered EPS of $14.01 versus $11.76 expected, a 19.13% beat. Management raised the dividend 12.5% to $4.50 per share, and the firm bought back $12.36 billion of stock in 2025, with roughly $32 billion in capacity remaining.
CEO David Solomon told shareholders the firm has grown “revenues by 60%, improved returns by 500 basis points and delivered total shareholder returns of more than 340%” since its first Investor Day, and expects momentum to “accelerate in 2026.” Goldman has the lowest absolute share price of the four, a retail-investor-facing brand, an active dividend program, and broad employee stock compensation that benefits from a friendlier per-share quote. Prediction markets show zero contracts tracking a Goldman split, and management has signaled nothing.
Key Takeaway for Investors Splits are cosmetic. Market cap, intrinsic value, and fundamentals are unchanged by reslicing the pie. What can shift is retail demand, options accessibility, and short-term sentiment. None of these four companies has announced or signaled a split. Among them, Goldman Sachs carries the cleanest combination of dividend culture, brand recognition, and an employee comp structure that would benefit from a more accessible share price. If any of the four finally budges, the smart money looks to 200 West Street first.
Investors looking for stocks in the Building Products - Home Builders sector might want to consider either Persimmon Plc (PSMMY) or NVR (NVR). But which of these two stocks is more attractive to value investors?
The housing market remains a focal point for investors, making the choice between Lennar (LEN +5.68%)and D.R. Horton (DHI +5.26%)a critical decision for those seeking exposure to residential construction.
Lennar focuses on high-tech homebuilding and financial services, while D.R. Horton maintains its position as the nation's largest builder by volume. Both companies must navigate high interest rates and shifting demographics, but they utilize different land-acquisition strategies and product mixes to capture demand in a changing economic landscape.
The case for LennarLennar operates as a major homebuilder with a geographic footprint spanning 26 states, including high-growth markets in Florida, Texas, and California. The company delivered more than 82,500 new homes in 2025, serving a wide range of buyers from first-time homeowners to luxury clients. It also operates segments for mortgage loans and title insurance, which integrate the home-buying experience for its customers.
In FY 2025, revenue reached nearly $34.2 billion. This figure represented a decrease of approximately 3.5% compared to the previous year, reflecting broader market shifts in the housing industry. Net income for the period was close to $2.1 billion, resulting in a net margin of roughly 6.1%, which measures the percentage of revenue remaining after all expenses are paid.
As of its November 2025 balance sheet, the debt-to-equity ratio was approximately 0.3x. This ratio measures total debt relative to shareholder equity, indicating the company maintains a conservative level of leverage. The current ratio, which measures the ability to pay short-term debts with short-term assets, was roughly 3.1x. Free cash flow, or the cash remaining after capital expenditures, was nearly $28.2 million. Note that stock-based compensation accounted for roughly 75.4% of operating cash flow, thereby inflating reported cash generation, since SBC is a non-cash expense added back in the cash flow statement.
The case for D.R. HortonD.R. Horton is the largest homebuilder in the United States by volume, operating in 126 markets across 36 states. The company focuses heavily on the entry-level market, providing affordable options for buyers who are often sensitive to pricing and interest rates. Its massive scale provides a competitive advantage when participating among consumer discretionary stocks by allowing for better negotiations with suppliers and subcontractors.
For FY 2025, revenue was approximately $34.3 billion. This was a decline of nearly 6.9% compared to the prior year, as the builder faced a more challenging interest rate environment. Despite the revenue dip, the company reported net income of roughly $3.6 billion. This resulted in a net margin of approximately 10.5%, highlighting the company's ability to maintain profitability even during periods of lower volume.
As of its September 2025 balance sheet, the current ratio stood at close to 17.4x. Its debt-to-equity ratio was roughly 0.2x, suggesting the company carries a low amount of debt compared to its equity base. Free cash flow for the year totaled approximately $3.3 billion, providing significant flexibility for shareholder returns or future land acquisitions. Note that stock-based compensation was not a major factor in its cash flow reporting for this period.
Risk profile comparisonLennar faces risks related to the cyclical nature of the housing market, where inflation and interest rates can suddenly dampen demand. The company relies on a land-light strategy that uses options, which could be disrupted if land banks fail to honor contracts or face financial distress. Competition from other large builders, such as PulteGroup(PHM +4.65%) and NVR(NVR +2.77%), also puts pressure on Lennar to maintain its pricing power and delivery schedules.
D.R. Horton is similarly exposed to interest rate volatility, which directly impacts the affordability of its entry-level homes. The company also faces supply chain risks, including shortages of materials such as lumber or drywall, which can delay construction and increase costs. It competes for market share with firms such as KB Home(KBH +4.12%) and Toll Brothers(TOL +5.98%), requiring constant investment in new land and labor to maintain its leading volume position.
Valuation comparisonD.R. Horton appears slightly cheaper based on future earnings estimates, though Lennar offers a more attractive valuation based on its total sales volume.
MetricLennarD.R. HortonSector BenchmarkForward P/E14.5x13.7x29.6xP/S ratio0.7x1.2xSector benchmark uses the SPDR XLY sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
The success of homebuilders depends on many factors, including mortgage rates, affordability concerns, and homebuyers’ willingness to purchase in an uncertain economy. Both D.R. Horton and Lennar face the same challenges and offer similar products. The question is, which company has the more effective strategy?
D.R. Horton has an asset-light land strategy. Unlike the traditional homebuilding model of buying land, developing it, and then selling homes, Horton uses options agreements and partners with developers to buy lots as needed, so its capital isn’t tied up in land ownership. This works well in uncertain housing markets because there’s less risk of sitting on property that won’t sell.
Lennar is also worth considering, however. It’s one of the largest homebuilders in the country and has rewarded its shareholders through buybacks and dividends. It’s a cyclical industry, and if mortgage rates decline and housing demand rises, the entire homebuilding industry should benefit, including Lennar.
If I were choosing between the two today, however, I’d pick D.R. Horton. This company appears to have a better plan to handle an uncertain market. Horton's stronger cash flow and capital efficiency should continue to benefit shareholders. If the housing market improves, both companies could grow. But if conditions remain challenging, I'd rather own the company that appears better positioned to weather the downturn.
Although Wall Street treats homebuilders as cyclical, Berkshire Hathaway (NYSE:BRK-B | BRK-B Price Prediction) just doubled down on the industry in a way that demands attention. On Sunday, May 31, 2026, Berkshire agreed to acquire Taylor Morrison Home for $72.50 per share in cash, a $6.8 billion equity deal valuing the homebuilder at roughly $8.5 billion including debt. The price represents a 24% premium to Taylor Morrison’s May 29 close, and it lands as Berkshire’s first major strategic acquisition under new CEO Greg Abel, who succeeded Warren Buffett at the start of 2026.
What’s notable is the timing. Berkshire is buying into housing while data looks weak. Taylor Morrison (NYSE:TMHC) just reported home closings down 26% year over year to 2,268 units, with adjusted home closings gross margin compressing 400 basis points to 20.6%. Housing starts have bounced between 1.273 million in October 2025 and 1.507 million in March 2026, with April’s print at 1.465 million, down 3% sequentially. Buffett, on CNBC, praised the move: “Greg did that faster than I could done it, smoother than I could have done it, and I never talked to the CEO. He has launched.”
Berkshire already owns Clayton Homes, building product subsidiaries, and Berkshire Hathaway HomeServices. Adding a top-tier production builder with roughly $400 billion in cash still on the balance sheet reads as a multi-decade conviction call on the cycle. The deal is expected to close in the second half of 2026.
So here is the question every retail investor should ask. If the smart money is willing to write an $8.5 billion check for a cyclical, commoditized industry, what does the long memory of that industry actually look like?
The one homebuilder that broke the cycle The S&P 500 has returned roughly 1,800% since 1996. In the same window, one obscure Reston, Virginia builder has delivered approximately 62,000% in price appreciation, with shares trading around $10 in 1996 and near $6,200 today. That gain is roughly 34 times the index’s return.
The stock is NVR (NYSE:NVR), parent of Ryan Homes, NVHomes, and Heartland Homes. Shares last printed at $6,104.80 on May 29, 2026, with a market capitalization of $16.48 billion and a trailing P/E near 15x. NVR has compounded EPS at over 15% annually since 2000, a 25-year track record. From quarterly EPS of $0.24 in Q1 1996 to $121.54 in Q4 2025, the compounding is the entire thesis.
How does a homebuilder do that?
The capital-light model that ate the industry On We Study Billionaires, episode TIP818, Kyle Grieve framed the central puzzle: “How can you reliably maintain a competitive advantage in a service that is pretty straightforward and maybe even a commoditized service?”
NVR’s answer is structural. Two mechanisms do the heavy lifting. As we’ve previously highlighted in our coverage of capital-light compounders, the model is the moat.
First, NVR does not own land. It uses lot purchase agreements, or LPAs, putting down only 10% deposits with third-party developers. The land risk that has flattened generations of homebuilders in downturns sits elsewhere.
Second, NVR pre-sells homes. Customers agree to purchase before construction begins. Construction is then performed by independent subcontractors. Roughly 90% of revenue is homebuilding and about 10% is mortgage origination. Inventory risk gets pushed onto the buyer, and labor flexes with demand.
Layer aggressive buybacks on top, and you have history’s most efficient homebuilder. NVR has repurchased shares continuously since 1994. Full-year 2025 buybacks totaled $1.82 billion across 243,082 shares, and the board authorized a fresh $750 million program in Q4 2025. Q1 2026 added another $631.96 million across 90,180 shares, per the company’s 8-K filing.
I’ve been watching homebuilders since the post-2009 recovery, and the persistent feature of NVR is that the model holds when the cycle bites. Q1 2026 revenue fell 20% year over year to $1.88 billion, and EPS came in at $67.76 versus a $79.20 estimate. Shares are down 16% year to date and down 14% over the trailing year. NVR still rides the cycle. The only quarterly loss in its 30-year earnings record was Q4 2008 at negative $5.54, and it returned to profitability the very next quarter.
The long memory lesson The bull case for housing typically gets dressed up in demographic charts and migration patterns. Long term, housing heads higher in the decades to come, and Berkshire is betting that an operator with land, brand, and scale is worth $8.5 billion in the middle of a down year. Retail sentiment seems to agree. Reddit threads around the deal logged bullish sentiment scores of 70 to 72 through the announcement window.
The long memory of the industry says something more specific. The investor who, in 1996, simply bought the builder that refused to own land and refused to build a home it had not already sold did not have to time a single cycle. They piled into a capital-light compounder while everyone else argued about mortgage rates. Roughly 34 times the S&P 500 later. Berkshire is betting the cycle turns. The cycle has turned before. And the winner of the last one compounded through every downturn without ever needing it to end.
