NVR, Inc. NVR reported first-quarter fiscal 2026 results, with earnings and Homebuilding revenues missing the Zacks Consensus Estimate. Both earnings and Homebuilding revenues also declined on a year-over-year basis.
The first-quarter results reflect a period of resilient demand tempered by significant operational and cost-related headwinds. On the positive side, the company saw a healthy uptick in new orders and a favorable decrease in cancellation rates, suggesting sustained buyer interest.
However, these gains were largely offset by a lower opening backlog, which constrained settlement volumes and drove a significant decline in homebuilding revenues. Profitability in the segment was further impacted by continued pricing pressure and elevated lot costs, leading to margin compression. Performance was also weighed down by lower loan production and a reduced capture rate within the mortgage banking segment, alongside broader industry obstacles.
Following the results, NVR stock declined 4.7% during yesterday’s trading hours.
Inside NVR’s Q1 Headlines
Diluted earnings were $67.76 per share, down 29% from $94.83 a year ago and missing the Zacks Consensus Estimate of $78.25 by 13.4%.
NVR, Inc. Price, Consensus and EPS Surprise
NVR, Inc. price-consensus-eps-surprise-chart | NVR, Inc. Quote
Homebuilding revenues of $1.83 billion also missed the consensus mark of $1.99 billion by 7.9%. Consolidated revenues (Homebuilding & Mortgage Banking fees combined) amounted to $1.88 billion, down 22% on a year-over-year basis. Results reflected a sharp decline in homebuilding settlements, partially offset by stronger order activity and a lower cancellation rate.
Segment Details of NVR
NVR Sees Homebuilding Setbacks From Fewer Closings
Homebuilding remained the central swing factor. Segment revenues decreased 22% year over year due to settlements declining 21.8% to 4,015 units from 5,133 units in the prior-year quarter. Management attributed the decline largely to a 15% lower backlog entering the quarter versus the comparable period last year. Our model predicted settlements to decline 12.6% year over year to 4,488 units. The average selling price (ASP) for settlements remained flat year over year at $457,000. Our estimate for the metric was $450,800.
Margin performance also tightened. Homebuilding gross profit margin fell to 19.6% from 21.9% a year ago, pressured by continued pricing pressure and higher lot costs. Our estimate for the metric was 18.9%. As a result, homebuilding income fell to $224.6 million from $369.5 million in the prior-year quarter.
Mortgage Banking Slows With Lower Loan Volume
Mortgage banking results moderated as origination volume declined. Mortgage closed loan production totaled $1.05 billion, down 27% year over year, reflecting weaker volume flowing through the channel. Mortgage banking income before taxes decreased 17% to $27.1 million from $32.5 million a year ago.
Fee revenues also moved lower. Mortgage banking fees were $46.2 million versus $52.6 million in the year-ago quarter. The capture rate was 83% compared with 86% a year earlier, indicating a modest decline in the share of homebuyers using NVR’s mortgage platform.
NVR Shows Better Orders, Lower Cancellations in Q1
While deliveries were down, demand signals improved in key measures. New orders increased 7% year over year to 5,738 units, and the cancellation rate improved to 14% from 16% a year ago. The ASP of new orders was $440,100, down 2% from the prior-year quarter. Our model predicted the ASP of new orders at $476,600.
Backlog stability was another constructive indicator. As of March 31, 2026, backlog totaled 10,171 units, essentially flat versus March 31, 2025, though the dollar value of backlog declined 3% to $4.7 billion. NVR also reported average active communities of 432, up from 401 in the prior-year period, supporting a broader selling footprint despite the near-term settlement decline.
NVR Maintains Liquidity While Continuing Share Repurchases
Balance sheet liquidity remained meaningful, though cash balances declined from year-end levels. Homebuilding cash and cash equivalents were $1.65 billion on March 31, 2026, versus $1.88 billion as of Dec. 31, 2025. Mortgage banking cash and cash equivalents were $36.3 million versus $32.6 million at year-end.
Capital return activity continued at a sizable pace. During the first quarter of fiscal 2026, NVR repurchased 90,180 shares at an aggregate cost of $632 million. Shares outstanding at quarter end were 2,731,827, reflecting ongoing share count reduction alongside a housing market backdrop that remained challenging for near-term volumes.
NVR's Zacks Rank & Peer Releases
Currently, NVR carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
D.R. Horton DHI delivered second-quarter fiscal 2026 results with earnings beating the Zacks Consensus Estimate but revenues missing the same. The quarter was marked by an 11% jump in net sales orders and progress in tightening finished inventory, even as affordability constraints kept incentives elevated.
D.R. Horton updated fiscal 2026 consolidated revenue guidance to $33.5-$34.5 billion compared with the prior expectation of $33.5-$35 billion. This compares with $34.25 billion in fiscal 2025. It now expects homebuilding closings of 86,000-87,500 homes compared with the earlier guidance of 86,000-88,000. This compares with 84,863 in fiscal 2025.
KB Home KBH reported first-quarter fiscal 2026 results. The company’s quarterly earnings came in line with the Zacks Consensus Estimate, while total revenues missed the same. Both metrics decreased on a year-over-year basis.
For the second quarter of fiscal 2026, KB Home is expecting housing revenues to be in the $1.05-$1.15 billion band, down from $1.52 billion reported in the year-ago period. It expects deliveries to be in the range of 2,250-2,450 homes compared with 3,120 homes delivered in the year-ago period.
Lennar Corporation LEN reported tepid results for the first quarter of fiscal 2026, wherein its adjusted earnings and total revenues missed the Zacks Consensus Estimate and declined year over year.
For the fiscal second quarter, Lennar expects deliveries to be in the range of 20,000-21,000 homes compared with 20,131 homes delivered in the year-ago period. Lennar expects the ASP of the delivered homes to be in the range of $370,000-$375,000, down from $389,000 reported a year ago.
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