NVR Inc (NVR)

Conclusion

NVR Inc is a United States homebuilder that sells single-family detached homes, townhomes and condominiums under the Ryan Homes, NVHomes and Heartland Homes names. It also runs a mortgage banking segment that serves its homebuyers. At a price of 6338.38 USD on 2026-11-09, the market capitalisation is 16.77 billion USD.

The verdict is fair. The P/E of 16.0 sits below its ten-year median of 17.1, while the price to free cash flow of 20.5 sits above its ten-year median of 18.3. The DCF gives 5101.39 USD per share at a discount rate of 9.58%, and the fair value from historical multiples is 6753.89 USD. The fair value band runs from 4742.11 to 7113.17 USD, with a midpoint of 5927.64 USD and a margin of safety of -6.5% at the current price. The reverse DCF implies growth of 8.4% a year, against revenue growth of 6.5% and free cash flow per share growth of 9.0% over five years.

The strongest numbers are a net debt to EBITDA of -0.04, meaning net cash, an ROIC of 31.2% against a WACC of 9.2%, and an interest coverage of 32.9. The weakest are a three-year revenue compound growth of -0.7%, a next-year estimate change of -15.9% over ninety days, and a three-year EPS compound growth of -3.9%.

Financial health

Financial strength is green, held up by a net debt to EBITDA of -0.04 (a net cash position), an interest coverage of 32.9 and a current ratio of 3.71. The quick ratio of 1.11 and the debt to equity of 0.31 add further support. The Altman Z-score is 12.13, in the safe zone, although that model was designed for manufacturers and NVR is a homebuilder. Insolvency risk: low, about 0.04% by the estimate of the Ohlson model over one to two years. Leverage is not a near-term concern on these figures.

Earnings quality

Earnings quality is green, supported by free cash flow conversion of 92.3% over five years and a share count that fell 4.8% a year over the same period. Trailing conversion is lower at 78.1%. The accrual ratio is 3.6%, and stock-based compensation is 0.8% of revenue, leaving free cash flow after it at 747.3 million USD on a trailing basis. The Piotroski score is 4 of 9, a neutral reading. The Beneish M-score is not available. Over the last eight quarters the company beat estimates four times and missed four times, with an average surprise of -3.0%. Analysts have cut estimates: the current year is down 6.8% over ninety days with six downgrades and no upgrades in the last thirty days, and the next year is down 15.9% over ninety days.

Profitability

Profitability is green. The gross margin of 21.4% sits just below its ten-year median of 22.1%, the operating margin of 14.0% sits below its median of 14.6%, and the net margin of 11.2% sits below its median of 12.5%. The main strength is returns: ROIC is 31.2% against a WACC of 9.2%, and the given ROIC minus WACC value is 21.95%, which the model classes as value creating. The five-year median ROIC is 62.2%, so the current level is lower than the company has usually earned. Return on equity is 30.5%. The DuPont split at year-end 2025 shows a net margin of 13.0%, an asset turnover of 1.76 and an equity multiplier of 1.52, so the return rests mainly on margin and asset efficiency rather than on leverage.

Growth

Growth is green, held up by EPS growth and revenue consistency. Revenue compound growth is -0.7% over three years, 6.5% over five years and 7.2% over ten years. EPS compound growth is -3.9% over three years, 13.7% over five years and 17.1% over ten years. Free cash flow per share compound growth is -12.2% over three years, 9.0% over five years and 23.4% over ten years. Revenue grew in eight of the last ten years. The next-year EPS growth estimate is 2.9%, which is modest after a three-year decline.

Valuation

Valuation is yellow, with no positive signals and one neutral signal from the verdict. Against their ten-year medians, the P/E of 16.0 carries a premium of -6.2% against a median of 17.1, and EV to EBITDA of 11.9 carries a premium of 1.5% against a median of 11.7. Price to free cash flow of 20.5 carries a premium of 11.7%. Price to sales of 1.8 carries a premium of -16.9%, and price to book of 4.9 carries a premium of -17.9%. The DCF gives 5101.39 USD per share at a discount rate of 9.58%, and the fair value from historical multiples is 6753.89 USD. The fair value band is an order of magnitude built on fixed assumptions, including a 5% equity risk premium and capped growth, and is not a price target. The reverse DCF implies 8.4% growth, against 6.5% revenue growth over five years. The company pays no dividend.

Risks

A three-year revenue decline of 0.7% suggests demand has weakened, and if it continues the five-year growth record will be harder to sustain. The next-year EPS estimate cut of 15.9% over ninety days means the earnings base may fall further. Four misses in eight quarters indicate forecasting difficulty, and a Piotroski score of 4 of 9 shows limited improvement in financial signals. A price to free cash flow premium of 11.7% means the market pays more for each unit of cash flow than its own history. The Beneish M-score is not available, so the test for earnings manipulation cannot be read. The DCF terminal value accounts for 53.7% of the DCF, so the valuation depends on long-term assumptions. This analysis has no debt maturity schedule and no revenue breakdown by segment, so refinancing risk and the split between homebuilding and mortgage banking cannot be assessed.