NVR Is Set to Report Q2 Earnings: What's in Store for the Stock?

NVR, Inc. NVR is expected to report lower earnings in the second quarter of 2025. Homebuilding revenues are also likely to have decreased on a year-over-year basis, given soft demand, elevated inventories and margin headwinds.In the last reported quarter, earnings and homebuilding revenues missed the Zacks Consensus Estimate by 12.1% and 1%, respectively. On a year-over-year basis, homebuilding revenues increased 3%, but earnings declined 18.5%.The company’s earnings beat the consensus mark in one of the last four quarters and missed on the other three occasions, the average negative surprise being 0.9%.Trend in Estimate Revision for NVRThe Zacks Consensus Estimate for the to-be-reported quarter’s EPS has decreased to $106.33 from $106.35 in the past 30 days. The estimated figure indicates an 11.9% decrease from the year-ago EPS of $120.69.The consensus mark for revenues is pegged at $2.40 billion, indicating a decrease of 5.8% from the year-ago reported figure of $2.55 billion.NVR, Inc. Price and EPS Surprise NVR, Inc. price-eps-surprise | NVR, Inc. QuoteFactors Likely to Shape NVR’s Q2 ResultsNVR’s second-quarter Homebuilding revenues are expected to reflect the ongoing softness in the homebuilding industry. The spring 2025 selling season for the U.S. homebuilding market fell short of expectations, weighed down by ongoing affordability pressures and weakened consumer confidence. Persistently high and fluctuating mortgage rates, along with broader economic and geopolitical uncertainties, curbed homebuyer activity during what is usually the strongest period for sales.Our model predicts Homebuilding revenues (which accounted for 97.8% of total revenues in 2024) to decline 5.6% year over year to $2.4 billion in the to-be-reported quarter. For the quarter to be reported, our model predicts the average selling price of settlements to decline 1.5% year over year to $443,500. Also, we anticipate total settlements to decrease 4.2% to 5,422 units on a year-over-year basis.The company's bottom line is expected to have decreased year over year in the quarter due to higher building materials and labor costs. We expect the homebuilding gross margin to be 22.1%, down 150 basis points year over year. Also, selling, general and administrative expenses are expected to increase 2.7% year over year for the homebuilding segment.Our model predicts total new orders to increase 3.6% year over year to 6,287 units. The backlog is currently pegged at 11,030 units, which indicates a decline from 11,597 units reported a year ago. We expect the value of the backlog to be $5.3 billion, implying a decline from $5.45 billion in the corresponding year-ago quarter.What the Zacks Model Unveils for NVROur proven model does not conclusively predict an earnings beat for NVR for the quarter to be reported. The company does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat, which is not the case here.NVR’s Earnings ESP: The company has an Earnings ESP of +3.25%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.NVR’s Zacks Rank: NVR currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.Stocks With the Favorable CombinationHere are some companies in the Zacks Construction sector that, according to our model, have the right combination of elements to post an earnings beat in the quarter to be reported.Primoris Services Corporation PRIM has an Earnings ESP of +5.33% and a Zacks Rank of 1.The company’s earnings beat estimates in each of the last four quarters, the average surprise being 44.8%. Primoris Services’ earnings for the second quarter of 2025 are expected to increase 1.9%.United Rentals, Inc. URI currently has an Earnings ESP of +5.33% and a Zacks Rank of 2.The company’s earnings beat estimates in two of the last four quarters and missed on the other two occasions, the negative average surprise being 1.2%. United Rentals’ earnings for the second quarter of 2025 are expected to tumble 1.5%.Armstrong World Industries, Inc. AWI currently has an Earnings ESP of +1.71% and a Zacks Rank of 3.The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 6.5%. Armstrong World’s earnings for the second quarter of 2025 are expected to increase 8%.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVR, Inc. (NVR): Free Stock Analysis Report Armstrong World Industries, Inc. (AWI): Free Stock Analysis Report United Rentals, Inc. (URI): Free Stock Analysis Report Primoris Services Corporation (PRIM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks