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Reston, Virginia-based NVR, Inc. (NVR) engages in the construction and sale of single-family detached homes, townhomes and condominium buildings, all of which are primarily constructed on a pre-sold basis. With a market cap of $21.9 billion, NVR operates through the Homebuilding and Mortgage Banking segments.
The home builder has significantly underperformed the broader market over the past year. NVR stock has plummeted 4.8% over the past 52 weeks and 11.9% on a YTD basis, compared to the S&P 500 Index’s ($SPX) 17.5% surge over the past year and 1.3% gains in 2025.
Zooming in further, while NVR has slightly outpaced iShares U.S. Home Construction ETF's (ITB) 5.6% dip over the past year, it has underperformed ITB’s 3.5% decline in 2025 by a notable margin.
Despite reporting better-than-expected financials, NVR’s stock plunged 3.8% after the release of its Q4 results on Jan. 28. The company reported a robust 16.5% year-over-year growth in homebuilding revenues to $2.8 billion, exceeding the Street’s expectations by 3.3%. Alongside the company also observed significant growth in mortgage banking fees and income. Moreover, NVR’s earnings increased 15.1% year-over-year to $139.93 per share, beating the consensus estimates by 10.7%.
However, NVR’s new orders during the quarter decreased 7.6% year-over-year to 4,794 units, while the backlog of homes sold but not settled as of Dec. 31 decreased 3% year-over-year to 9,953 units and the cancellation rate for Q4 2024 increased to 17% up from 13% in Q4 2023. These updates unsettled investor’s confidence in NVR's growth prospects in the coming quarters.
For the current fiscal 2025, ending in December, analysts expect NVR’s earnings to observe a marginal decline to $505.20 per share. Meanwhile, the company has a mixed earnings surprise history. While it surpassed the Street’s bottom-line estimates twice over the past four quarters, it missed the expectations on two other occasions.
Among the seven analysts covering the NVR stock, the consensus rating is a “Hold.” That’s based on one “Strong Buy,” five “Hold,” and one “Strong Sell” rating.
This configuration has been consistent over the past three months.
On Jan. 29, UBS (UBS) analyst John Lovallo reiterated a “Neutral” rating on NVR, while raising the price target to $8,900.
NVR’s mean price target of $8,917.50 represents a 23.7% premium to current price levels, while its street-high target of $9,300 indicates a 29% upside potential.
