Hovnanian Enterprises Inc (HOV)
NYSE:HOV
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Hovnanian Enterprises
(NYSE:HOV)
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Rating:62Neutral
Price Target:
$118.00
▲(7.19% Upside)
Action:ReiteratedDate:04/02/26
The score is driven by mixed financial performance: strong recent free cash flow and improving leverage signals are offset by sharply compressed margins and flat-to-down revenue. Valuation (low P/E) is a clear positive, while technicals are neutral-to-weak and the earnings call points to near-term pressure from incentives and cautious Q2 guidance despite an expected H2 improvement.
Positive Factors
Strong cash generation
Sustained operating cash flow (~$385M TTM) and robust free cash flow (~$358M TTM) provide durable internal funding for land-light execution, working-capital needs and opportunistic deleveraging. Reliable cash conversion increases strategic optionality across housing cycles and supports investment without heavy external financing.
Negative Factors
Elevated buyer incentives compress margins
Sustained use of large mortgage-rate buydowns and incentives (12.6% of ASP) materially reduces gross margin sustainability and forces reliance on price concessions to preserve volume. If incentives remain elevated, longer-term profitability will be muted and margin recovery dependent on structural market improvement rather than operating gains alone.
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Positive Factors
Negative Factors
Strong cash generation
Sustained operating cash flow (~$385M TTM) and robust free cash flow (~$358M TTM) provide durable internal funding for land-light execution, working-capital needs and opportunistic deleveraging. Reliable cash conversion increases strategic optionality across housing cycles and supports investment without heavy external financing.
Read all positive factors
Hovnanian Enterprises (HOV) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$645.63M
Dividend YieldN/A
Average Volume (3M)111.16K
Price to Earnings (P/E)8.8
Beta (1Y)1.38
Revenue Growth-0.84%
EPS Growth-76.30%
CountryUS
Employees1,878
SectorConsumer Cyclical
Sector Strength84
IndustryResidential Construction
Share Statistics
EPS (TTM)2.62
Shares Outstanding5,153,480
10 Day Avg. Volume121,137
30 Day Avg. Volume111,163
Financial Highlights & Ratios
PEG Ratio-0.16
Price to Book (P/B)0.93
Price to Sales (P/S)0.26
P/FCF Ratio4.67
Enterprise Value/Market Cap1.84
Enterprise Value/Revenue0.40
Enterprise Value/Gross Profit0.73
Enterprise Value/Ebitda9.97
Forecast
1Y Price Target
$74.00Price Target Upside-32.78% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Hovnanian Enterprises Business Overview & Revenue Model
Company Description
Hovnanian 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 w...
How the Company Makes Money
Hovnanian Enterprises makes money primarily by selling newly constructed homes to homebuyers. Its core revenue stream is homebuilding revenue, recognized when a home sale closes (i.e., when the home is delivered and title transfers), which include...
Hovnanian Enterprises Earnings Call Summary
Earnings Call Date:Mar 02, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jun 03, 2026
Earnings Call Sentiment Neutral
The call conveyed balanced results: the company beat near-term guidance (notably adjusted EBITDA and pretax income), maintained strong liquidity and improved balance-sheet metrics, and showed operational progress on inventory turnover, shorter cycle times and early contract/traffic momentum. Offsetting these positives, elevated mortgage-rate buydowns and other incentives (12.6% of ASP) materially compressed margins, driving a 24% YoY decline in profit and prompting cautious Q2 guidance. The company is executing a deliberate land-light strategy and shifting toward higher-margin to-be-built homes, which supports expectations for margin recovery in the back half of the year, but near-term earnings remain muted and partially reliant on non-recurring JV gains and sustained incentive deployment.Positive Updates
Revenue in Line with Guidance
Total revenues of $632 million in Q1, approaching the high end of guidance and demonstrating resilience versus expectations.
Negative Updates
Year-over-Year Revenue and Deliveries Decline
Total revenue fell ~6% YoY and home deliveries decreased ~12% YoY, reflecting softer market conditions and lower closings.
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Q1-2026 Updates
Positive
Negative
Revenue in Line with Guidance
Total revenues of $632 million in Q1, approaching the high end of guidance and demonstrating resilience versus expectations.
Read all positive updates
Company Guidance
For Q2 FY26 the company guided total revenues of $625 million to $725 million, adjusted gross margin of 13.0%–14.0%, SG&A of 12.5%–13.5% of revenue, income from joint ventures of $0–$10 million, adjusted EBITDA of $30–$40 million and adjusted pretax income of $0–$10 million; the outlook includes proceeds from a closed land sale, assumes stable marketing conditions (no material increases in mortgage rates, tariffs, inflation, cancellation rates or construction cycle times) and excludes phantom‑stock expense tied to stock‑price moves from the $112.65 quarter‑end close. Management warned Q2 profit may be modest but expects adjusted pretax income and gross margins to improve in H2 FY26 as newer, higher‑margin communities deliver; they cited supporting metrics including $471 million liquidity, 35,560 domestic controlled lots (6.7‑year supply), 86% of lots optioned, 742 QMIs (down 30% YoY), a backlog conversion ratio of 88%, and current incentives of ~12.6% of average sales price.Hovnanian Enterprises Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
63
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Oct 2025 | Oct 2024 | Oct 2023 | Oct 2022 | Oct 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.94B | 2.98B | 3.00B | 2.76B | 2.92B | 2.78B |
| Gross Profit | 1.63B | 420.67M | 601.79M | 580.14M | 643.43M | 540.80M |
| EBITDA | 119.20M | 135.39M | 355.57M | 283.75M | 349.18M | 263.13M |
| Net Income | 56.53M | 63.87M | 242.01M | 205.89M | 225.49M | 607.82M |
Balance Sheet | ||||||
| Total Assets | 2.73B | 2.63B | 2.61B | 2.49B | 2.56B | 2.32B |
| Cash, Cash Equivalents and Short-Term Investments | 349.57M | 285.38M | 209.98M | 434.12M | 326.20M | 245.97M |
| Total Debt | 970.67M | 957.30M | 1.02B | 1.17B | 1.31B | 1.39B |
| Total Liabilities | 1.90B | 1.80B | 1.81B | 1.91B | 2.18B | 2.15B |
| Stockholders Equity | 835.74M | 830.93M | 800.35M | 581.74M | 383.04M | 174.90M |
Cash Flow | ||||||
| Free Cash Flow | 357.86M | 166.18M | 5.78M | 416.45M | 76.87M | 204.27M |
| Operating Cash Flow | 385.04M | 188.28M | 23.64M | 435.27M | 89.47M | 210.21M |
| Investing Cash Flow | -70.06M | -66.01M | -46.47M | -78.23M | -2.15M | 9.00M |
| Financing Cash Flow | -81.44M | -70.39M | -187.93M | -261.71M | -16.52M | -217.27M |
Hovnanian Enterprises Technical Analysis
Negative
110.08
Price Trends
116.04
Negative
114.01
Negative
121.95
Negative
Market Momentum
-1.30
Negative
48.80
Neutral
34.99
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HOV, the sentiment is Negative. The current price of 110.08 is above the 20-day moving average (MA) of 109.16, below the 50-day MA of 116.04, and below the 200-day MA of 121.95, indicating a neutral trend. The MACD of -1.30 indicates Negative momentum. The RSI at 48.80 is Neutral, neither overbought nor oversold. The STOCH value of 34.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $3.20B | 8.49 | 12.99% | ― | 4.77% | -9.30% | |
71 Outperform | $3.99B | 11.14 | 7.29% | ― | -16.60% | -29.85% | |
63 Neutral | $1.75B | 12.06 | 8.37% | 1.99% | -6.28% | -31.55% | |
62 Neutral | $645.63M | 8.76 | 6.81% | ― | -0.84% | -76.30% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
48 Neutral | $914.22M | 13.73 | 3.51% | ― | -20.62% | -45.74% | |
46 Neutral | $641.77M | -4.50 | 0.81% | ― | 1.77% | -66.27% |
* Consumer Cyclical Sector Average
HOV
Hovnanian Enterprises
110.08
14.39
15.04%
BZH
Beazer Homes
21.89
3.46
18.77%
MHO
M/I Homes
124.16
18.02
16.98%
TPH
Tri Pointe
46.80
17.50
59.73%
LGIH
LGI Homes
40.54
-14.96
-26.95%
CCS
Century Communities
60.33
2.46
4.25%
Hovnanian Enterprises Corporate Events
Executive/Board ChangesShareholder Meetings
Hovnanian Shareholders Approve Expanded Stock Incentive Plan
Positive
Apr 1, 2026
At its 2026 Annual Meeting of Stockholders held on March 31, 2026, Hovnanian Enterprises’ shareholders approved the Fourth Amended and Restated 2020 Stock Incentive Plan, which is substantially similar to the prior plan but increases the poo...
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.