Stock of the Day

July 2, 2020

NVR (NVR)

$7,084.39
-$173.61 (-2.4%)
Market Cap: $21.70B

About NVR

NVR, Inc. operates as a homebuilder in the United States. The company operates through, Homebuilding and Mortgage Banking segments. It engages in the construction and sale of single-family detached homes, townhomes, and condominium buildings under the Ryan Homes, NVHomes, and Heartland Homes names. The company markets its Ryan Homes products to first-time and first-time move-up buyers; and NVHomes and Heartland Homes products to move-up and luxury buyers. It also provides various mortgage related services to its homebuilding customers, as well as brokers title insurance; performs title searches in connection with mortgage loan closings; and sells mortgage loans to investors in the secondary markets on a servicing released basis. The company primarily serves in Maryland, Virginia, West Virginia, Delaware, New Jersey, Eastern Pennsylvania, New York, Ohio, Western Pennsylvania, Indiana, Illinois, North Carolina, Georgia, South Carolina, Florida, Tennessee, and Washington, D.C. NVR, Inc. was founded in 1980 and is headquartered in Reston, Virginia.

NVR Bull Case

Here are some ways that investors could benefit from investing in NVR, Inc.:

  • NVR, Inc. reported earnings per share (EPS) of $139.93 for the latest quarter, exceeding analysts' expectations of $132.63, indicating strong financial performance and effective management.
  • The company has a robust net margin of 16.34%, which suggests that it retains a significant portion of revenue as profit, a positive indicator for potential investors.
  • NVR, Inc. has authorized a stock buyback plan worth $750 million, allowing the company to repurchase up to 2.8% of its shares. This often signals that the company believes its stock is undervalued, which can lead to an increase in share price.
  • With a return on equity of 39.58%, NVR, Inc. demonstrates effective use of shareholders' equity to generate profits, making it an attractive option for investors seeking high returns.
  • The current stock price is approximately $7,515.60, reflecting the company's strong market position and investor confidence.

NVR Bear Case

Investors should be bearish about investing in NVR, Inc. for these reasons:

  • Recent insider trading activity shows a director sold shares, reducing their ownership by 11.99%. Such actions can raise concerns about the company's future prospects from an insider's perspective.
  • While the stock buyback plan is a positive sign, it may also indicate that the company lacks alternative growth opportunities, which could limit future expansion.
  • The construction industry can be highly cyclical and sensitive to economic downturns, which may pose risks to NVR, Inc.'s profitability in uncertain economic conditions.
  • With corporate insiders owning only 7.00% of the company's stock, there may be less alignment between management and shareholder interests, potentially affecting decision-making.
  • Analysts predict an EPS of 512.33 for the current year, which, while optimistic, may set high expectations that could lead to disappointment if not met.

Recent News