NEW YORK (
-- NVR Incorporated
) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
Highlights from the ratings report include:
- The gross profit margin for NVR INC is rather low; currently it is at 19.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.90% trails that of the industry average.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Household Durables industry and the overall market, NVR INC's return on equity is below that of both the industry average and the S&P 500.
- The revenue fell significantly faster than the industry average of 27.2%. Since the same quarter one year prior, revenues fell by 12.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- NVR INC's earnings per share declined by 49.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NVR INC increased its bottom line by earning $33.41 versus $31.01 in the prior year. This year, the market expects an improvement in earnings ($36.09 versus $33.41).
- NVR's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
NVR, Inc. operates as a homebuilder in the United States. The company has a P/E ratio of 23.4, above the average materials & construction industry P/E ratio of 21.7 and above the S&P 500 P/E ratio of 16.7. NVR has a market cap of $4.3 billion and is part of the
industry. Shares are up 11.5% year to date as of the close of trading on Thursday.
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