NVR Q3 revenue, net income fall

Overview

• US homebuilder's Q3 revenue and net income declined year-over-year

• Gross margin fell due to higher lot costs, pricing pressure, and land deposit impairments

• Mortgage banking income rose 7% despite lower loan production

Outlook

• Company did not provide specific guidance for future quarters or full-year results in the press release

Result Drivers

• HIGHER COSTS AND PRICING PRESSURE - Co said gross margin fell due to higher lot costs, pricing pressure from affordability challenges, weak consumer sentiment, and land deposit impairments

• LOWER DEMAND AND PRICES - Co reported fewer new orders, lower average sales prices, and a higher cancellation rate

• MORTGAGE BANKING INCOME - Mortgage banking segment income rose despite lower loan production

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 3 "hold" and 3 "sell" or "strong sell"

• The average consensus recommendation for the homebuilding peer group is "buy."

• Wall Street's median 12-month price target for NVR, Inc. is $6,562.50, about 11.2% above its October 21 closing price of $5,900.00

• The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 17 three months ago

Reuters Recommended Reads

• Oct 21 - M/I Homes Q3 revenue falls on weaker demand

• Oct 22 - PulteGroup Q3 home sale revenue falls 9% as demand weakens

• Oct 19 - US homebuilder sentiment tumbles to near 14-1/2-year low in October

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)