NVR's 3Q Earnings Miss and Disappointing New Order Growth Drive Shares Lower; FVE to $2,390
Shares of NVR fell as much as 9% during intraday trading on Oct. 18 following the no-moat homebuilder's third-quarter earnings release. We believe NVR's earnings miss (reported EPS of $48.28 versus the $50.94 consensus estimate) and its tepid new order growth of 2% fueled the sell off. After reviewing NVR's third-quarter results, we modestly tempered our near-term average selling price and homebuilding profitability assumptions, which caused our fair value estimate to decrease less than 1% to $2...NVR is engaged in the construction and sale of single-family detached homes, townhomes and condominium buildings, all of which are constructed on a pre-sold basis. The company conducts its homebuilding activities directly. The company's homebuilding operations construct and sell single-family detached homes, townhomes and condominium buildings under three trade names: Ryan Homes, which is marketed primarily to first-time and first-time move-up buyers; and NVHomes and Heartland Homes, which are marketed primarily to move-up and luxury buyers. The company's mortgage banking operations also include separate subsidiaries that broker title insurance and perform title searches in connection with mortgage loan closings.
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Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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