NVR, Inc. NVR
Verdict: Hold. Fair value $7,433 against a price of $7,105 on 6 Jan 2026, 5% above the price.
In plain words
The case for: Narrow competitive moat provides durability. Industry tailwinds with growing market.
The case against: Intense competitive pressure could compress margins. The OCF / Net Income ratio has deteriorated significantly, falling from a healthy 1.08 in 2022 to.... In 2024, Net Income increased to $1.68B from $1.59B in 2023, while Operating Cash Flow decreased....
Main risks
- Growth Deceleration: TTM revenue ($10.48B) is below both 2024 ($10.54B) and 2022 ($10.54B) levels, and the 3-year CAGR (5.6%) is modest, signaling a potential peak in the cycle.
- Deteriorating Cash Flow: Free cash flow has declined for two consecutive years, from a peak of $1.85B in 2022 to $1.29B TTM, a significant 30% drop that outpaces the decline in net income.
- Cyclical Industry Headwinds: As a homebuilder, the company is highly exposed to interest rates and macroeconomic conditions. The flat earnings surprise history (+0.0%) suggests performance is merely meeting, not exceeding, cautious expectations.
- The OCF / Net Income ratio has deteriorated significantly, falling from a healthy 1.08 in 2022 to...
- In 2024, Net Income increased to $1.68B from $1.59B in 2023, while Operating Cash Flow decreased...
- Intense competitive environment