NVR Inc (NVR, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $8,004.84, NVR Inc has witnessed a daily gain of 0.58%, marked against a three-month change of 15.14%. A thorough analysis, underlined by the GF Score, suggests that NVR Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 9/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 3/10
- Momentum rank: 9/10
Considering the high ranks in financial strength, profitability, and growth, and a slightly lower GF Value rank, GuruFocus assigned NVR Inc a GF Score of 94 out of 100, which signals the highest outperformance potential.
Understanding NVR Inc Business
NVR Inc is a United States-based homebuilding company operating in over 33 metropolitan areas across the east of the Mississippi River. The company builds single-family detached homes, townhomes, and condominium buildings under three brands, Ryan Homes, NVHomes, and Heartland Homes. NVR's avoidance of direct land development activity is unique among public homebuilders and results in relatively outsized return metrics. The Virginia-based company also manages mortgage banking segment and homebuilding operating segments. The homebuilding segment includes four geographic areas; Mid-Atlantic, North East, Mid-East, and South East. With a market cap of $25.6 billion and sales of $9.53 billion, NVR Inc's operating margin stands at 20.47%, reflecting its efficient operations and strong market position.
Financial Strength Breakdown
According to the Financial Strength rating, NVR Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for NVR Inc stands impressively at 70.36, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5. With an Altman Z-Score of 13.24, NVR Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.11, NVR Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows NVR Inc's impressive standing among its peers in generating profit. NVR Inc's Operating Margin has increased to 20.47% in 2023, up from 14.17% in 2019. Additionally, the company's Gross Margin has also seen a consistent rise over the past five years, indicating growing proficiency in transforming revenue into profit. The Piotroski F-Score confirms NVR Inc's solid financial situation, and its strong Predictability Rank of 5.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, NVR Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 17.3%, which outperforms 74.26% of companies in the Homebuilding & Construction industry. Moreover, NVR Inc has seen a robust increase in its EBITDA over the past few years, with a three-year growth rate of 34.6, and a five-year rate of 23.8. This trend accentuates the company's continued capability to drive growth.
Conclusion: NVR Inc's Position for Outperformance
Considering NVR Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. The company's strategic approach to business, combined with its strong financial indicators, positions it as a compelling choice for investors seeking growth and stability. With a GF Score of 94, NVR Inc stands out as a robust investment opportunity in the homebuilding sector. Value investors looking to capitalize on such strong financial metrics can explore more companies with high GF Scores using the GF Score Screen provided by GuruFocus.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
