NVR
CyclicalNVR, Inc.
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Market Data
Financials
XBRL · SEC EDGAR2009–2025(17yr)| Metric | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $2.7B | $3.0B | $2.7B | $3.2B | $4.2B | $4.4B | $5.2B | $5.8B | $6.3B | $7.2B | $7.4B | $7.5B | $9.0B | $10.5B | $9.5B | $10.5B | $10.3B | -1.9% |
| Net Income | $192.2M | $206.0M | $129.4M | $180.6M | $266.5M | $281.6M | $382.9M | $425.3M | $537.5M | $797.2M | $878.5M | $901.2M | $1.2B | $1.7B | $1.6B | $1.7B | $1.3B | -20.3% |
| Net Margin | 7.0% | 6.8% | 4.9% | 5.7% | 6.3% | 6.3% | 7.4% | 7.3% | 8.5% | 11.1% | 11.9% | 12.0% | 13.8% | 16.4% | 16.7% | 16.0% | 13.0% | -3.0pp |
| Free Cash Flow | $238.6M | $48.4M | -$10.0M | $252.0M | $251.2M | — | — | — | $550.1M | $703.5M | $843.8M | $909.1M | $1.2B | $1.9B | $1.5B | $1.3B | $1.1B | -18.5% |
| FCF Margin | 8.7% | 1.6% | -0.4% | 7.9% | 6.0% | — | — | — | 8.7% | 9.8% | 11.4% | 12.1% | 13.7% | 17.6% | 15.5% | 12.8% | 10.6% | -2.2pp |
| EPS (Diluted) | $31.26 | $33.42 | $23.01 | $35.12 | $54.81 | $63.50 | $89.99 | $103.61 | $126.77 | $194.80 | $221.13 | $230.11 | $320.48 | $491.82 | $463.31 | $506.69 | $436.55 | -13.8% |
1. THE BIG PICTURE
NVR is essentially a manufacturing and financing business that happens to build houses, using a capital-light model to offload the riskiest part of the industry—land development—to third parties. This strategy has made it the most cash-efficient player among its peers, but recent results show that even this model cannot fully insulate it from the "affordability issues" and "economic volatility" currently hitting the broader housing market (10-Q).
2. WHERE THE RISKS HIT HARDEST
The "conservative lot acquisition strategy" (10-K Item 1) is threatened by "economic volatility" because NVR must forfeit deposits if it chooses not to build. In the fourth quarter of 2025 alone, these "contract land deposit impairments" totaled $35.7 million (8-K). Furthermore, the reliance on NVR Mortgage Finance (NVRM) for mortgage services is a strength that becomes a liability if the "secondary mortgage market" tightens, potentially forcing NVR to use its own "limited financial resources" to fund customer loans rather than selling them to investors (10-K Item 1A).
3. WHAT THE NUMBERS SAY TOGETHER
While NVR’s gross margins (22.9%) are lower than peers like Lowe's or Williams-Sonoma, its operating margin (17.4%) and FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin (9.8%) lead the homebuilding peer group (XBRL). This suggests superior overhead management and capital efficiency. However, the recent 20% drop in net income and the decline in gross margin to 20.4% (8-K) indicate that "higher lot costs" and "pricing pressure" are eroding NVR, Inc.'s historical profitability advantage. Short interest stands at 3.9% of the float, suggesting a minor but present bearish sentiment regarding these headwinds (Yahoo Finance).
4. IS IT WORTH IT AT THIS PRICE?
At 15.1x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, NVR is at fair value compared to the peer median of 15.1x (Yahoo Finance). At this multiple, the market is pricing in ~3.6% long-term growth (CAPM analysis). This is supported by an 8.7% buyback yield, which provides a significant floor for EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric growth even if net income remains flat. However, if growth slows to a GDP-pace of 2.5%, the justified multiple would fall to 13.0x (CAPM analysis). The primary risk to this valuation is a continued decline in settlements, which fell 8% in the most recent quarter (8-K).
5. WHAT WOULD CHANGE THIS VIEW?
- Cautious if "contract land deposit impairments" continue to rise above the $35.7 million seen in Q4, indicating a breakdown in the lot-option strategy.
- Constructive if "settlements" (currently down 8%) stabilize or return to growth, signaling that "affordability challenges" are easing.
- Cautious if "gross profit margin" continues to slide below the 20.4% reported in the most recent quarter (8-K).
6. BOTTOM LINE
Structural Advantage: A capital-light lot-acquisition model that generates industry-leading free cash flow and operating margins by avoiding the risks of direct land development.
Bottom Line: NVR is a high-quality cash generator currently navigating a cyclical downturn; it remains a solid hold as long as its buyback program can offset the current pressure on homebuilding margins.
1. Top 5 Material Risks
- Economic Sensitivity: Demand for new homes is highly sensitive to employment levels, wage growth, and consumer confidence; a downturn could materially impair NVR, Inc.’s profitability and cash flows.
- Interest Rate Volatility: High interest rates increase borrowing costs for NVR, Inc. and reduce mortgage affordability for customers, while also creating secondary marketing losses if NVR, Inc. cannot match loan originations with forward commitments.
- Mortgage Financing Availability: Because nearly all customers require financing, any tightening of credit standards or limited availability of mortgages can reduce demand and increase home cancellations in the backlog.
- Secondary Market Liquidity: NVR, Inc. relies on selling originated loans into the secondary market within 30 days; if this market tightens, NVR, Inc. may be forced to fund commitments using its own limited resources or a $150 million repurchase agreement.
- Inventory and Land Control: NVR, Inc. must continuously acquire lots via LPAs with forfeitable deposits; adverse market conditions may force NVR, Inc. to restructure these agreements or cease building, leading to deposit forfeitures and land impairments.
2. Company-Specific Risks
- Subcontractor Reliance: NVR, Inc. engages subcontractors for all home construction; improper construction practices could lead to significant repair costs that NVR, Inc. may be unable to recover from the subcontractors or insurers.
- Mortgage Underwriting Quality: If a substantial number of originated loans default and investors determine NVR, Inc. failed to meet underwriting standards, NVR, Inc. could be required to repurchase those loans or indemnify investors for losses.
- Cybersecurity and Data Privacy: NVR, Inc. stores sensitive personal information of homebuyers and employees; a security breach could result in regulatory proceedings, fines, and reputational damage that erodes customer trust.
- Senior Note Covenants: The $900 million in senior notes outstanding contain restrictive covenants regarding secured debt and asset sales; violations could result in decreased liquidity or default.
3. Regulatory/Legal Risks
- Zoning and Building Moratoriums: Local regulations regarding density and zoning, as well as periodic building moratoriums, can delay projects and increase the cost to produce and market homes.
- Environmental Compliance: NVR, Inc. is subject to various environmental laws that vary by location; these can cause project delays, require substantial compliance costs, or restrict building activity in environmentally sensitive areas.
- Climate Change Regulation: Emerging state and federal regulations regarding carbon dioxide emissions and energy efficiency standards may increase operating costs and the cost of building materials.
- Mortgage Industry Oversight: NVR, Inc. is an approved seller/servicer for FNMA, FHLMC, GNMA, VA, and FHA; any impairment of this eligibility or changes to federal laws governing these entities could negatively impact mortgage revenue and increase operating costs.
4. Financial Impact Map
Economic Downturn → Profitability and Cash Flows → Potential material adverse effect on ability to service debt obligations. Interest Rate Volatility → Mortgage Banking Revenue → Potential for secondary marketing losses and reduced demand for mortgage originations. Secondary Market Disruption → Liquidity → Potential requirement to fund commitments using limited financial resources or a $150 million repurchase agreement. Inventory/Land Risk → Profitability → Forfeiture of land contract deposits and impairment of land under development. Senior Note Covenants → Liquidity → Potential for default or restricted access to capital if covenants are violated.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-K | Feb 2026 | Dec 2025 |
| 8-K | Jan 2026 | — |
| 10-Q | Nov 2025 | Sep 2025 |
| 14A | Mar 2025 | — |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
NVR Q4 revenue $2.71B beats estimates by 9.4% despite 4.7% YoY decline
- ▸NVR Q4 revenue $2.71B, down 4.7% YoY, beat estimates by 9.4%
- ▸NVR shares down 13.7% since Q4 earnings report
- ▸Taylor Morrison Home Q4 revenue $2.1B, down 10.9% YoY, beat estimates by 7.2%
- ▸Home builder sector Q4 revenues beat consensus estimates by 3.1%
- ▸Home builder stocks down 10.6% on average since Q4 earnings releases
NVR Q4 EPS $121.54 beats estimates; homebuilding revenue $2.6B down 5.2% YoY
- ▸Q4 EPS $121.54 beat analyst expectations of $104.96
- ▸Q4 homebuilding revenue $2.6B, down 5.2% YoY but beat estimates by 12.3%
- ▸Shares down 11.7% YTD, underperforming Nasdaq Composite's 4% decline
- ▸Stock trading below 50-day and 200-day moving averages since mid-February
- ▸Consensus rating 'Moderate Buy' with mean price target of $7,916.17