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Hovnanian (HOV)
:HOV
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Hovnanian Enterprises
(NYSE:HOV)
67Neutral
Hovnanian Enterprises (HOV) vs. S&P 500 (SPY)
Market Cap
$620.01M
Dividend YieldN/A
Average Volume (3M)81.81K
Price to Earnings (P/E)3.2
Beta (1Y)2.89
Revenue Growth8.88%
EPS Growth19.66%
CountryUS
Employees1,878
SectorConsumer Cyclical
Sector Strength49
IndustryResidential Construction
Share Statistics
EPS (TTM)32.50
Shares Outstanding5,195,302
10 Day Avg. Volume64,351
30 Day Avg. Volume81,812
Financial Highlights & Ratios
PEG Ratio0.16
Price to Book (P/B)N/A
Price to Sales (P/S)0.20
Price to Cash Flow (P/CF)-2.80
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$125.00Price Target Upside19.82% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering2
Hovnanian Enterprises Business Overview & Revenue Model
Company DescriptionHovnanian Enterprises, Inc. (HOV) is a leading national homebuilder based in the United States, primarily engaged in designing, constructing, and selling residential homes. The company operates through various segments, including homebuilding and financial services, offering a wide range of products from entry-level to luxury homes tailored to diverse market needs. Hovnanian is known for its commitment to quality, innovative design, and customer satisfaction, serving numerous communities across the country.
How the Company Makes MoneyHovnanian Enterprises generates revenue primarily through its homebuilding operations. The company makes money by constructing and selling residential homes, which include single-family homes, townhomes, and condominiums, across various geographic markets. Revenue is recognized when homes are delivered to customers and the closing process is completed. Additionally, Hovnanian offers financial services, including mortgage and title services, to facilitate home purchases, which also contributes to its earnings. The company's revenue streams are influenced by factors such as housing market conditions, economic trends, interest rates, and consumer preferences. Strategic partnerships with suppliers, subcontractors, and real estate professionals further support its operations and profitability.
Hovnanian Enterprises Financial Statement Overview
Summary
Hovnanian Enterprises exhibits a robust financial performance with strong revenue growth, profitability, and efficient cash management. The company shows a significant improvement in financial health with debt elimination and solid equity growth, contributing to a stable financial structure.Income Statement
Hovnanian Enterprises shows strong financial performance with significant revenue growth over the trailing-twelve-months (TTM) compared to previous years. The gross profit margin stands at 37.02%, and the net profit margin at 7.99% for TTM, indicating efficient cost management and profitability. The EBIT and EBITDA margins are robust at 27.15% and 29.01% respectively, demonstrating healthy operating efficiency. The revenue growth rate is impressive at 10.97% from 2023 to 2024, highlighting a positive growth trajectory.85
Very Positive
Balance Sheet
Hovnanian's balance sheet reflects a solid equity position with a total debt elimination in TTM, a significant improvement from previous years. The equity ratio is 32.03% in TTM, showing a stable financial structure. The return on equity (ROE) is strong at 30.35%, indicating effective utilization of equity to generate profits. However, there is a need to maintain this leverage balance to ensure long-term financial stability.78
Positive
Cash Flow
The company's cash flow performance reveals a strong free cash flow position, with a substantial free cash flow growth rate of 606.48% from 2023 to 2024. The operating cash flow to net income ratio is 0.23, and the free cash flow to net income ratio is 0.17 for TTM, suggesting adequate cash generation relative to net income. The cash flow stability adds to the company's financial resilience despite fluctuations in operating cash flow.80
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.08B | 3.00B | 2.76B | 2.92B | 2.78B | 2.34B |
| Gross Profit | |||||
| 1.14B | 601.79M | 580.14M | 643.43M | 540.80M | 372.21M |
| EBIT | |||||
| 837.34M | 259.56M | 276.90M | 368.43M | 266.05M | 140.56M |
| EBITDA | |||||
| 343.96M | 313.34M | 283.75M | 364.39M | 271.39M | 143.42M |
| Net Income Common Stockholders | |||||
| 246.29M | 242.01M | 205.89M | 225.49M | 607.82M | 50.93M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 102.71M | 209.98M | 434.12M | 326.20M | 245.97M | 262.49M |
| Total Assets | |||||
| 2.53B | 2.61B | 2.49B | 2.56B | 2.32B | 1.83B |
| Total Debt | |||||
| 981.34M | 986.89M | 1.14B | 1.29B | 1.37B | 1.57B |
| Net Debt | |||||
| 887.08M | 776.92M | 708.91M | 965.15M | 1.13B | 1.30B |
| Total Liabilities | |||||
| 1.72B | 1.81B | 1.91B | 2.18B | 2.15B | 2.26B |
| Stockholders Equity | |||||
| 811.43M | 800.35M | 581.74M | 383.04M | 174.90M | -436.93M |
| Cash Flow | Free Cash Flow | ||||
| 40.85M | 5.78M | 416.45M | 76.87M | 204.27M | 289.45M |
| Operating Cash Flow | |||||
| 55.49M | 23.64M | 435.27M | 89.47M | 210.21M | 292.83M |
| Investing Cash Flow | |||||
| -67.42M | -46.47M | -78.23M | -2.15M | 9.00M | 2.14M |
| Financing Cash Flow | |||||
| -83.23M | -187.93M | -261.71M | -16.52M | -217.27M | -167.77M |
Hovnanian Enterprises Technical Analysis
Negative
104.32
Price Trends
119.71
Negative
139.73
Negative
162.62
Negative
Market Momentum
-2.93
Negative
41.45
Neutral
27.29
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HOV, the sentiment is Negative. The current price of 104.32 is below the 20-day moving average (MA) of 106.50, below the 50-day MA of 119.71, and below the 200-day MA of 162.62, indicating a bearish trend. The MACD of -2.93 indicates Negative momentum. The RSI at 41.45 is Neutral, neither overbought nor oversold. The STOCH value of 27.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HOV.
Hovnanian Enterprises Risk Analysis
Hovnanian Enterprises disclosed 34 risk factors in its most recent earnings report. Hovnanian Enterprises reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Hovnanian Enterprises Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $40.99B | 9.14 | 19.35% | 1.08% | 2.12% | 1.63% | |
74 Outperform | $21.17B | 7.16 | 27.40% | 0.78% | 11.74% | 25.66% | |
69 Neutral | $10.82B | 7.52 | 20.38% | 0.84% | 5.86% | 12.20% | |
68 Neutral | $31.00B | 8.58 | 14.99% | 1.70% | 2.06% | -3.67% | |
67 Neutral | $620.01M | 3.21 | 33.63% | ― | 8.88% | 19.66% | |
66 Neutral | $4.23B | 7.21 | 15.60% | 1.69% | 5.54% | 11.25% | |
59 Neutral | $12.27B | 11.11 | -0.54% | 3.71% | 1.45% | -20.42% |
* Consumer Cyclical Sector Average
Performance Comparison
HOV
Hovnanian Enterprises
104.32
-50.67
-32.69%
DHI
DR Horton
125.99
-34.42
-21.46%
KBH
KB Home
57.73
-11.19
-16.24%
LEN
Lennar
113.93
-45.20
-28.40%
PHM
PulteGroup
101.74
-15.84
-13.47%
TOL
Toll Brothers
105.08
-22.04
-17.34%
Hovnanian Enterprises Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: -14.19% | Next Earnings Date: May 28, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed sentiment. On the positive side, the company demonstrated strong revenue growth, an increase in controlled lots, and a high return on investment. However, there were challenges such as lower-than-expected revenue guidance, a decline in gross margin due to increased incentives, and sales volatility. Utility and permitting delays further complicated the company's ability to meet its targets.Highlights
Revenue and Profit Growth
Total revenues increased 13% to $674 million compared to last year's first quarter. Adjusted EBITDA for the quarter was $72 million, and adjusted pretax income was $41 million, both above the high end of the guidance range.
Strong Contract Growth
Contracts for the first quarter, including unconsolidated joint ventures, increased 9% year over year. Notably, November contracts increased 55% year over year.
Increase in Controlled Lots
The company ended the quarter with 43,254 controlled lots, a 29% increase year over year, indicating strong future growth potential.
High Return on Investment
The company's return on equity was 33%, and adjusted EBIT return on investment was 29.8%, one of the highest among peers.
Lowlights
Lower Revenue Guidance
Revenues were $674 million, near the low end of the guidance, due to about fifty fewer wholly-owned deliveries than expected and some delays due to utility hookups.
Decline in Gross Margin
Gross margin decreased year over year due to increased use of incentives, primarily mortgage rate buy downs.
Volatility in Sales
Sales activity was volatile, with a significant drop in January contracts by 10% year over year. Sales were also slower than expected in some months.
Utility and Permitting Delays
Delays in opening new communities were primarily related to utility hookups and permitting delays throughout the country.
Company Guidance
During Hovnanian Enterprises, Inc.'s fiscal 2025 first quarter earnings call, the company provided detailed guidance on various financial metrics. Revenue for the quarter was reported at $674 million, near the low end of their guidance due to fewer-than-expected wholly-owned deliveries, primarily affected by delays in utility hookups. The adjusted gross margin was 18.3%, near the high end of the guidance range, while SG&A expenses improved to 12.9% of total revenue, better than the low end of expectations. Income from unconsolidated joint ventures was $9 million, below guidance due to delivery delays in two joint venture communities. Adjusted EBITDA exceeded expectations at $72 million, and adjusted pretax income was $41 million, surpassing the high end of guidance. The company also highlighted a 13% year-over-year increase in total revenues, attributed to strong performance in Delaware and Northern Virginia markets, despite challenges in the West due to fires and utility delays. For the second quarter, Hovnanian expects revenues between $675 million and $775 million, with adjusted gross margins ranging from 17.5% to 18.5%, citing continued use of incentives like mortgage rate buy downs to combat affordability amidst high interest rates.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.