Home Builders Stocks Q3 In Review: NVR (NYSE:NVR) Vs Peers

November 18, 2024 at 04:18 AM EST

NVR Cover Image

Looking back on home builders stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including NVR (NYSE: NVR) and its peers.

Traditionally, homebuilders have built competitive advantages with economies of scale that lead to advantaged purchasing and brand recognition among consumers. Aesthetic trends have always been important in the space, but more recently, energy efficiency and conservation are driving innovation. However, these companies are still at the whim of the macro, specifically interest rates that heavily impact new and existing home sales. In fact, homebuilders are one of the most cyclical subsectors within industrials.

The 11 home builders stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was 99.9% below.

While some home builders stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.1% since the latest earnings results.

NVR (NYSE: NVR)

Known for its unique land acquisition strategy, NVR (NYSE: NVR) is a respected homebuilder and mortgage company in the United States.

NVR reported revenues of $2.73 billion, up 6.4% year on year. This print exceeded analysts’ expectations by 1.2%. Overall, it was a mixed quarter for the company with a solid beat of analysts’ backlog estimates but a significant miss of analysts’ EBITDA estimates.

Unsurprisingly, the stock is down 6.4% since reporting and currently trades at $9,026.

Is now the time to buy NVR? Access our full analysis of the earnings results here, it’s free.

Best Q3: LGI Homes (NASDAQ: LGIH)

Based in Texas, LGI Homes (NASDAQ: LGIH) is a homebuilding company specializing in constructing affordable, entry-level single-family homes in desirable communities across the United States.

LGI Homes reported revenues of $651.9 million, up 5.6% year on year, outperforming analysts’ expectations by 1.6%. The business had a stunning quarter with an impressive beat of analysts’ backlog and adjusted operating income estimates.

However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $102.50.

Is now the time to buy LGI Homes? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: D.R. Horton (NYSE: DHI)

One of the largest homebuilding companies in the U.S., D.R. Horton (NYSE: DHI) builds a variety of new construction homes across multiple markets.

D.R. Horton reported revenues of $10 billion, down 4.8% year on year, falling short of analysts’ expectations by 1.9%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations significantly and a significant miss of analysts’ EBITDA estimates.

D.R. Horton delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 9.1% since the results and currently trades at $164.

Read our full analysis of D.R. Horton’s results here.

Lennar (NYSE: LEN)

One of the largest homebuilders in America, Lennar (NYSE: LEN) is known for constructing affordable, move-up, and retirement homes across a range of markets and communities.

Lennar reported revenues of $9.42 billion, up 7.9% year on year. This print surpassed analysts’ expectations by 2.8%. Aside from that, it was a softer quarter as it recorded a significant miss of analysts’ adjusted operating income estimates.

The stock is down 11.9% since reporting and currently trades at $169.50.

Read our full, actionable report on Lennar here, it’s free.

Skyline Champion (NYSE: SKY)

Founded in 1951, Skyline Champion (NYSE: SKY) is a manufacturer of modular homes and buildings in North America.

Skyline Champion reported revenues of $616.9 million, up 32.9% year on year. This print was in line with analysts’ expectations. It was an exceptional quarter as it also produced an impressive beat of analysts’ sales volume estimates and a solid beat of analysts’ EBITDA estimates.

The stock is up 5.9% since reporting and currently trades at $96.30.

Read our full, actionable report on Skyline Champion here, it’s free.

Market Update

In response to the Fed's rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed's 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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