Wrapping up Q2 earnings, we look at the numbers and key takeaways for the home builders stocks, including NVR (NYSE:NVR) and its peers.
Traditionally, homebuilders have built competitive advantages with economies of scale that lead to advantaged purchasing and brand recognition among consumers. Aesthetic trends have always been important in the space, but more recently, energy efficiency and conservation are driving innovation. However, these companies are still at the whim of the macro, specifically interest rates that heavily impact new and existing home sales. In fact, homebuilders are one of the most cyclical subsectors within industrials.
The 11 home builders stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 3%.
Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation. However, home builders stocks have held steady amidst all this with average share prices relatively unchanged since the latest earnings results.
NVR (NYSE:NVR) Known for its unique land acquisition strategy, NVR (NYSE:NVR) is a respected homebuilder and mortgage company in the United States.
NVR reported revenues of $2.61 billion, up 11.7% year on year. This print exceeded analysts’ expectations by 2.6%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ backlog sales estimates.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $8,601.
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Best Q2: Skyline Champion (NYSE:SKY) Founded in 1951, Skyline Champion (NYSE:SKY) is a manufacturer of modular homes and buildings in North America.
Skyline Champion reported revenues of $627.8 million, up 35.1% year on year, outperforming analysts’ expectations by 4.6%. It was a stunning quarter for the company with an impressive beat of analysts’ earnings and volume estimates.
The market seems happy with the results as the stock is up 20.3% since reporting. It currently trades at $89.57.
Weakest Q2: TopBuild (NYSE:BLD) Established in 2015 following a spinoff from Masco Corporation (NYSE:MAS), TopBuild (NYSE:BLD) is a distributor and installer of insulation and other building products.
TopBuild reported revenues of $1.37 billion, up 3.7% year on year, falling short of analysts’ expectations by 2.3%. It was a weak quarter for the company with a miss of analysts’ earnings and organic revenue estimates.
As expected, the stock is down 11.3% since the results and currently trades at $377.40.
KB Home (NYSE:KBH) The first homebuilder to be listed on the NYSE, KB Home (NYSE:KB) is a homebuilding company targeting the first-time home buyer and move-up buyer markets.
KB Home reported revenues of $1.71 billion, down 3.1% year on year, surpassing analysts’ expectations by 3.4%. Taking a step back, it was a stunning quarter for the company with an impressive beat of analysts’ backlog sales estimates and a solid beat of analysts’ earnings estimates.
The stock is up 18% since reporting and currently trades at $80.33.
D.R. Horton (NYSE:DHI) One of the largest homebuilding companies in the U.S., D.R. Horton (NYSE:DHI) builds a variety of new construction homes across multiple markets.
D.R. Horton reported revenues of $9.97 billion, up 2.5% year on year, surpassing analysts’ expectations by 3.8%. Revenue aside, it was a mixed quarter for the company with a decent beat of analysts’ earnings estimates but a miss of analysts’ backlog sales estimates.
D.R. Horton pulled off the highest full-year guidance raise among its peers. The stock is up 12% since reporting and currently trades at $176.48.
This content was originally published on Stock Story
