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Hovnanian Enterprises Inc (HOV)
NYSE:HOV
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Hovnanian Enterprises
(NYSE:HOV)
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Rating:68Neutral
Price Target:
$147.00
▲(13.23% Upside)
Hovnanian Enterprises' overall stock score is driven by strong valuation metrics, indicating potential undervaluation. Financial performance shows positive revenue trends but is offset by profitability and cash flow challenges. The earnings call reflects a mixed outlook with strategic positives but also highlights operational risks. Technical analysis suggests a cautious approach due to mixed signals.
Hovnanian Enterprises (HOV) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$759.56M
Dividend YieldN/A
Average Volume (3M)111.02K
Price to Earnings (P/E)6.3
Beta (1Y)1.68
Revenue Growth7.97%
EPS Growth-35.64%
CountryUS
Employees1,878
SectorConsumer Cyclical
Sector Strength84
IndustryResidential Construction
Share Statistics
EPS (TTM)1.99
Shares Outstanding5,131,747
10 Day Avg. Volume121,150
30 Day Avg. Volume111,015
Financial Highlights & Ratios
PEG Ratio0.24
Price to Book (P/B)1.43
Price to Sales (P/S)0.38
P/FCF Ratio197.30
Enterprise Value/Market Cap2.24
Enterprise Value/Revenue0.54
Enterprise Value/Gross Profit1.42
Enterprise Value/Ebitda7.08
Forecast
1Y Price Target
$133.50Price Target Upside2.83% Upside
Rating ConsensusHold
Number of Analyst Covering2
Hovnanian Enterprises Business Overview & Revenue Model
Company DescriptionHovnanian Enterprises, Inc. engages in the design, construction, marketing, and sale of residential homes in the United States. It offers single-family detached homes, attached townhomes and condominiums, urban infill, and active lifestyle homes with amenities, such as clubhouses, swimming pools, tennis courts, tot lots, and open areas. The company markets and builds homes for first-time buyers, first-time and second-time move-up buyers, luxury buyers, active lifestyle buyers, and empty nesters. It also provides mortgage loans and title insurance services. The company was founded in 1959 and is headquartered in Matawan, New Jersey.
How the Company Makes MoneyHovnanian Enterprises generates revenue primarily through the sale of newly constructed homes. The company typically earns most of its income from the homebuilding segment, which includes the sale of residential properties and the associated land development. Additionally, Hovnanian may derive revenue from ancillary services such as mortgage financing, title insurance, and home warranty services. Strategic partnerships with land developers, financial institutions, and suppliers also contribute to its financial performance, enabling Hovnanian to streamline operations and enhance customer offerings. Market demand, interest rates, and economic conditions significantly impact the company's revenue generation capabilities.
Hovnanian Enterprises Earnings Call Summary
Earnings Call Date:Aug 21, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Dec 04, 2025
Earnings Call Sentiment Neutral
The earnings call indicated a mixed performance. There were significant achievements in terms of revenue growth, inventory management, and returns on equity and investment. However, these were balanced by challenges including declining gross margins, increased costs, and a difficult sales environment. The company is navigating these challenges with a focus on land-light strategy and community growth.Q3-2025 Updates
Positive Updates
Revenue Increase
Total revenues increased by 11% year-over-year due to an increase in deliveries.
Strong Inventory Management
QMI sales accounted for 79% of total sales, indicating successful management of quick move-in homes.
High Return on Equity
The company's return on equity was 19%, ranking second highest among midsized peers.
High Adjusted EBITDA Return on Investment
The adjusted EBITDA return on investment was 22.1%, the highest among midsized peers.
Increase in Contracts
Contracts for the third quarter increased by 1% year-over-year, with notable improvements in July.
Improvement in SG&A
SG&A improved by 110 basis points year-over-year to 11.3%.
Liquidity Above Target
Ended the third quarter with $278 million in liquidity, above the targeted range.
Negative Updates
Gross Margin Decline
Adjusted gross margin and adjusted pretax profit experienced year-over-year declines due to high levels of incentives.
Increased Walkaway and Impairment Costs
Higher walkaway costs and impairment charges were recorded, particularly in the West segment.
Challenging Market Environment
The sales environment remains difficult with economic uncertainty, high mortgage rates, and low consumer confidence.
Lower Overall Profitability
Year-over-year profitability was negatively impacted by gross margin decline, even though it was at the top of guidance.
Delays in Community Openings
Continued delays in opening new communities due to utility hookups and permitting delays.
Debt and Interest Expenses
Interest expense as a percentage of total revenues increased year-over-year to 4.2%.
Company Guidance
In the fiscal 2025 third quarter earnings call, Hovnanian Enterprises reported that they met or exceeded their guidance across several financial metrics despite challenging market conditions. The company achieved revenues of $801 million, which was at the midpoint of their guidance. Their adjusted gross margin was 17.3%, slightly below the guidance midpoint, while SG&A ratio was better than expected at 11.3%. Income from unconsolidated joint ventures was $16 million, although on the lower end of the guidance range. The adjusted EBITDA exceeded expectations at $77 million, surpassing the high end of the guidance range, and adjusted pretax income reached $40 million, topping the guidance range. Despite higher walkaway costs and impairment charges, particularly in the West segment, the company expressed satisfaction with their ability to meet or exceed their guidance amidst economic uncertainties.Hovnanian Enterprises Financial Statement Overview
Summary
Hovnanian Enterprises shows strong revenue growth and improved gross profit margins, indicating positive operational trends. However, declining net profit margins and operational efficiency metrics suggest potential profitability challenges. The balance sheet shows improved leverage but remains relatively high, posing financial risk. Cash flow metrics highlight significant challenges, with negative free cash flow growth and limited cash generation relative to net income.Income Statement
Hovnanian Enterprises shows a solid revenue growth rate of 2.54% TTM, indicating a positive trajectory. The gross profit margin has improved significantly to 38.30% TTM, reflecting better cost management. However, the net profit margin has decreased to 5.06% TTM, suggesting some pressure on net earnings. The EBIT and EBITDA margins have also declined, indicating potential challenges in operational efficiency.75
Positive
Balance Sheet
The company's debt-to-equity ratio has improved to 1.10 TTM, showing better leverage management, but still indicates a relatively high level of debt. Return on equity has decreased to 19.45% TTM, which is still strong but shows a downward trend. The equity ratio stands at 31.77% TTM, suggesting a moderate level of equity financing.65
Positive
Cash Flow
Free cash flow growth is negative at -505.48% TTM, indicating significant cash flow challenges. The operating cash flow to net income ratio is low at 0.21 TTM, suggesting limited cash generation relative to net income. However, the free cash flow to net income ratio is relatively healthy at 0.84 TTM, indicating decent cash conversion.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.14B | 3.00B | 2.76B | 2.92B | 2.78B | 2.34B |
| Gross Profit | 1.20B | 601.79M | 580.14M | 643.43M | 540.80M | 372.21M |
| EBITDA | 240.86M | 355.57M | 283.75M | 364.39M | 271.39M | 143.42M |
| Net Income | 158.88M | 242.01M | 205.89M | 225.49M | 607.82M | 50.93M |
Balance Sheet | ||||||
| Total Assets | 2.63B | 2.61B | 2.49B | 2.56B | 2.32B | 1.83B |
| Cash, Cash Equivalents and Short-Term Investments | 158.75M | 209.98M | 434.12M | 326.20M | 245.97M | 262.49M |
| Total Debt | 915.45M | 1.02B | 1.14B | 1.29B | 1.37B | 1.57B |
| Total Liabilities | 1.79B | 1.81B | 1.91B | 2.18B | 2.15B | 2.26B |
| Stockholders Equity | 835.36M | 800.35M | 581.74M | 383.04M | 174.90M | -436.93M |
Cash Flow | ||||||
| Free Cash Flow | 113.60M | 5.78M | 416.45M | 76.87M | 204.27M | 289.45M |
| Operating Cash Flow | 135.03M | 23.64M | 435.27M | 89.47M | 210.21M | 292.83M |
| Investing Cash Flow | -66.81M | -46.47M | -78.23M | -2.15M | 9.00M | 2.14M |
| Financing Cash Flow | -57.27M | -187.93M | -261.71M | -16.52M | -217.27M | -167.77M |
Hovnanian Enterprises Technical Analysis
Neutral
129.82
Price Trends
138.03
Negative
120.26
Positive
119.53
Positive
Market Momentum
-1.58
Positive
38.75
Neutral
4.89
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HOV, the sentiment is Neutral. The current price of 129.82 is below the 20-day moving average (MA) of 144.13, below the 50-day MA of 138.03, and above the 200-day MA of 119.53, indicating a neutral trend. The MACD of -1.58 indicates Positive momentum. The RSI at 38.75 is Neutral, neither overbought nor oversold. The STOCH value of 4.89 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HOV.
Hovnanian Enterprises Risk Analysis
Hovnanian Enterprises disclosed 2 risk factors in its most recent earnings report. Hovnanian Enterprises reported the most risks in the "Legal & Regulatory" 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | 3.84B | 7.87 | 16.59% | ― | 7.39% | -1.37% | |
75 Outperform | 2.95B | 8.44 | 13.73% | ― | -3.59% | -10.82% | |
69 Neutral | 1.89B | 7.76 | 10.14% | 1.83% | 3.76% | -17.55% | |
68 Neutral | $759.56M | 6.33 | 20.08% | ― | 7.97% | -35.64% | |
68 Neutral | 1.25B | 7.73 | 7.58% | ― | -7.89% | -19.53% | |
59 Neutral | 729.17M | 10.85 | 5.56% | ― | 9.97% | -52.57% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
Performance Comparison
HOV
Hovnanian Enterprises
130.35
-75.95
-36.82%
BZH
Beazer Homes
23.92
-10.05
-29.58%
MHO
M/I Homes
145.72
-24.37
-14.33%
TPH
Tri Pointe
33.73
-11.28
-25.06%
LGIH
LGI Homes
52.01
-65.73
-55.83%
CCS
Century Communities
61.90
-39.58
-39.00%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.