NEW YORK (TheStreet) -- Shares of Hovnanian Enterprises (HOV - Get Report) were gaining 9.04% to $1.93 on Tuesday before the homebuilder is scheduled to announce its fiscal third quarter financial results before the market opens on Wednesday.

Analysts expect Hovnanian to report a loss of 1 cent a share and revenue of $611.95 million for the third quarter of fiscal 2015 that ended in July.

Hovnanian reported a loss of 13 cents a share for the fiscal second quarter, missing analysts' estimates of a loss of 5 cents a share for the quarter. The company reported revenue of $468.95 million for the quarter, below analysts' estimates of $533.75 million for the quarter.

In the third quarter of fiscal 2014 Hovnanian reported earnings of 11 cents a share, above analysts' estimates of 9 cents a share. The company saw revenue of $551.01 million in the year-ago quarter, compared to analysts' estimates of $559.47 million.

TheStreet Ratings team rates HOVNANIAN ENTRPRS INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate HOVNANIAN ENTRPRS INC (HOV) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Household Durables industry. The net income has significantly decreased by 147.5% when compared to the same quarter one year ago, falling from -$7.90 million to -$19.56 million.
  • The gross profit margin for HOVNANIAN ENTRPRS INC is rather low; currently it is at 15.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.17% trails that of the industry average.
  • Net operating cash flow has declined marginally to -$60.51 million or 9.91% when compared to the same quarter last year. Despite a decrease in cash flow of 9.91%, HOVNANIAN ENTRPRS INC is still significantly exceeding the industry average of -105.92%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 57.62%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 160.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • HOVNANIAN ENTRPRS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, HOVNANIAN ENTRPRS INC increased its bottom line by earning $1.84 versus $0.20 in the prior year. For the next year, the market is expecting a contraction of 106.0% in earnings (-$0.11 versus $1.84).
  • You can view the full analysis from the report here: HOV Ratings Report