NVR Financial Analysis

Analysis Date: 1/29/2025

Business Model

NVR operates through two primary segments: homebuilding and mortgage banking

Revenue Sources

• Homebuilding segment (93.8% of Q4 2024 revenue): Sells and builds homes under Ryan Homes, NVHomes and Heartland Homes brands
• Mortgage Banking segment (6.2% of Q4 2024 revenue): Provides mortgage financing and secondary market loan sales

Revenue Distribution by Channel

• Mid Atlantic: 34.7% of total settlements ($524,800 avg price)
• North East: 8.4% of total settlements ($617,700 avg price)
• Mid East: 20.1% of total settlements ($410,300 avg price)
• South East: 36.8% of total settlements ($362,500 avg price)

Income Statement Analysis

• Revenue grew 16.5% YoY driven by 16% increase in settlements
• Gross margin decreased to 23.6% from 24.1% YoY
• Operating income increased 15.7% despite margin pressure

Balance Sheet Analysis

• Strong cash position of $2.56B despite 18.1% YoY decline
• Inventory increased 5.6% YoY to support growth
• Total assets decreased 3.3% primarily due to lower cash balance

Capital Allocation

NVR maintains an active share repurchase program, buying back 256,871 shares in 2024 for $2.06B. The company focuses on maintaining strong liquidity while returning excess capital to shareholders through buybacks.

Recommendation

Rating: Buy

Reason for Rating: Strong operational execution, healthy margins, and disciplined capital allocation support positive outlook

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 1/29/2025, 9:05:14 AM