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NVR, Inc. NVR is expected to report lower earnings in first-quarter 2025. Homebuilding revenues are likely to have increased on a year-over-year basis.
In the last reported quarter, earnings and the homebuilding revenues beat the Zacks Consensus Estimate by 10.7% and 3.3%, respectively. On a year-over-year basis, earnings and homebuilding revenues increased 15% and 16%, respectively.
The company’s earnings beat the consensus mark in two of the last four quarters and missed on the other two occasions, the average surprise being 4.6%. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Trend in Estimate Revision for NVR
The Zacks Consensus Estimate for the to-be-reported quarter’s EPS has decreased to $107.87 from $108.23 in the past seven days. The estimated figure indicates a 7.3% decrease from the year-ago EPS of $116.41.
NVR, Inc. Price and EPS Surprise
NVR, Inc. price-eps-surprise | NVR, Inc. Quote
The consensus mark for revenues is pegged at $2.37 billion, indicating an increase of 3.9% from the year-ago reported figure of $2.29 billion.
Factors Likely to Shape NVR’s Q1 Results
Despite ongoing affordability challenges from high mortgage rates, NVR’s first-quarter Homebuilding revenues are expected to have grown year over year, as homebuyers adjust to the new elevated mortgage rate benchmark. The company is likely to have benefited from an increase in settlements, a rise in average selling price and stronger new order volumes. Also, a strong business model and its strategy of acquiring finished building lots are likely to have aided the company’s performance to some extent.
Our model predicts Homebuilding revenues (which accounted for 97.8% of total revenues in 2024) to grow 4.8% year over year to $2.4 billion in the to-be-reported quarter. For the quarter to be reported, our model predicts the average selling price of settlements to improve 1.2% year over year to $454,400. Also, we anticipate total settlements to increase 3.6% to 5,271 units on a year-over-year basis.
The company's bottom line is expected to have decreased year over year in the quarter, due to higher building materials and labor costs. We expect the homebuilding gross margin to be 22%, down 250 basis points year over year. Also, selling, general and administrative expenses are expected to increase 2% year over year for the homebuilding segment.
Our model predicts total new orders to increase 8.7% year over year to 6,577 units. The backlog is currently pegged at 11,259 units, which indicates a rise from 11,189 units reported a year ago. We expect the value of the backlog to be $5.42 billion, implying growth from $5.22 billion in the corresponding year-ago quarter.