NVR (NVR) Down 2.5% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for NVR (NVR). Shares have lost about 2.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is NVR due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

NVR's Q4 Earnings & Homebuilding Revenues Top Estimates, Both Down Y/Y

NVR reported better-than-expected fourth-quarter 2025 results, with earnings and Homebuilding revenues surpassing the Zacks Consensus Estimate. Conversely, both earnings and Homebuilding revenues declined on a year-over-year basis.

The quarter’s performance highlights continued softness in the housing market, with affordability challenges persisting amid macroeconomic uncertainty and inflationary pressures. The Homebuilding segment saw a year-over-year decline in settlements, while average selling prices were up compared with the prior-year quarter.

Backlog units fell year over year, indicating continued caution among homebuyers, but the slight improvement in net new orders advocates optimism.

Inside NVR’s Q4 Headlines

The company reported earnings of $121.54 per share, topping the Zacks Consensus Estimate of $104.96 by 15.8%. Contrarily, the reported figure decreased 13% from the prior-year quarter’s earnings of $139.93 per share.

Homebuilding revenues of $2.635 billion also surpassed the consensus mark of $2.375 billion by 12%. Consolidated revenues (Homebuilding & Mortgage Banking fees combined) amounted to $2.713 billion, down 4.7% on a year-over-year basis.

Segment Details of NVR

Homebuilding: Segment revenues declined 5.2% year over year. Settlements in the quarter were down 8.3% year over year to 5,668 units. Our model predicted settlements to decline 18% year over year to 5,067 units. The ASP for settlements increased year over year by 3.3% to $464,900. Our estimate for the metric was $461,200.

The gross margin contracted 320 basis points year over year to 20.4%. Our estimate for the metric was 21.1%. The decline primarily reflects higher lot costs, pricing pressure stemming from ongoing affordability challenges and contract land deposit impairments totaling approximately $35.7 million.

New orders improved 3.3% from the prior-year quarter’s level to 4,951 units. However, the ASP of new orders decreased 3.2% year over year at $454,200. Our model predicted the ASP of new orders at $476,600. The cancellation rate inched down to 16.6% from 16.9% a year ago.

On a unit basis, backlog at the end of Dec. 31, 2025, decreased 15.1% to 8,448 homes and 16% to $4.01 billion on a dollar basis from the prior-year quarter’s figure.

The average number of active communities was 432 in the quarter, up from 427 reported a year ago.

Mortgage Banking: Mortgage banking fees grew 19.3% year over year to $77.4 million. Mortgage closed loan production totaled $1.51 billion, down 11% year over year. The capture rate was 84% in the fourth quarter, down from 86% in the year-ago quarter.

NVR’s 2025 Highlights

Homebuilding revenues in 2025 were down 1.9% year over year to $10.09 billion, with earnings per share of $436.55, a downturn of 13.8%.

Mortgage banking fees were down 1% to $229.7 million from $232.1 million in 2024.

NVR’s Financials

As of Dec. 31, 2025, NVR had cash and cash equivalents for Homebuilding and Mortgage Banking of $1.88 billion and $32.6 million, respectively, compared with $2.56 billion and $49.6 million at 2024-end.

During 2025, NVR repurchased 243,082 shares for $1.82 billion. At the end of Dec. 31, 2025, the company had 2,799,387 shares outstanding.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -22.87% due to these changes.

VGM Scores

At this time, NVR has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a score of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, NVR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

NVR belongs to the Zacks Building Products - Home Builders industry. Another stock from the same industry, D.R. Horton (DHI), has gained 5.7% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.

D.R. Horton reported revenues of $6.89 billion in the last reported quarter, representing a year-over-year change of -9.5%. EPS of $2.03 for the same period compares with $2.61 a year ago.

D.R. Horton is expected to post earnings of $2.18 per share for the current quarter, representing a year-over-year change of -15.5%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #5 (Strong Sell) for D.R. Horton. Also, the stock has a VGM Score of B.

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This article originally published on Zacks Investment Research (zacks.com).

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