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NVR, Inc. (NYSE:NVR) saw significant share price movement during recent months on the NYSE, rising to highs of US$8,383 and falling to the lows of US$6,700. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether NVR's current trading price of US$7,205 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at NVR’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
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Is NVR Still Cheap?
Good news, investors! NVR is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is $10506.41, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that NVR’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Check out our latest analysis for NVR
Can we expect growth from NVR?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of NVR, it is expected to deliver a negative earnings growth of -3.5%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What This Means For You
Are you a shareholder? Although NVR is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to NVR, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping tabs on NVR for some time, but hesitant on making the leap, we recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.