Hovnanian Enterprises (HOV) AI Stock Analysis

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Hovnanian Enterprises

(NYSE:HOV)

Rating:79Outperform

Price Target:

$140.00

▼(-9.19% Downside)

Hovnanian Enterprises' strong financial performance and undervaluation are the primary drivers of its stock score. Technical indicators show positive momentum, though caution is advised due to potential overbought conditions. Earnings call insights highlight both achievements and challenges, impacting the overall sentiment.

Hovnanian Enterprises (HOV) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$826.69M

Dividend YieldN/A

Average Volume (3M)110.14K

Price to Earnings (P/E)7.3

Beta (1Y)1.75

Revenue Growth7.97%

EPS Growth-35.64%

CountryUS

Employees1,878

SectorConsumer Cyclical

Sector Strength83

IndustryResidential Construction

Share Statistics

EPS (TTM)1.99

Shares Outstanding5,131,747

10 Day Avg. Volume111,404

30 Day Avg. Volume110,137

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap2.06

Enterprise Value/Revenue0.56

Enterprise Value/Gross Profit3.00

Enterprise Value/Ebitda5.46

Forecast

1Y Price Target

$120.00

Price Target Upside-22.16% Downside

Rating ConsensusHold

Number of Analyst Covering1

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 demonstrates strong financial performance with robust revenue growth, profitability, and efficient cash management. The elimination of debt and solid equity growth highlight significant improvements in financial health. However, maintaining operational efficiency and cash flow management is essential for sustaining growth.

Income Statement

Very Positive

Hovnanian Enterprises shows strong financial performance with significant revenue growth over the trailing-twelve-months (TTM) compared to previous years. The gross profit margin stands at 37.02%, and the net profit margin at 7.99% for TTM, indicating efficient cost management and profitability. The EBIT and EBITDA margins are robust at 27.15% and 29.01% respectively, demonstrating healthy operating efficiency. The revenue growth rate is impressive at 10.97% from 2023 to 2024, highlighting a positive growth trajectory.

Balance Sheet

Positive

Hovnanian's balance sheet reflects a solid equity position with a total debt elimination in TTM, a significant improvement from previous years. The equity ratio is 32.03% in TTM, showing a stable financial structure. The return on equity (ROE) is strong at 30.35%, indicating effective utilization of equity to generate profits. However, there is a need to maintain this leverage balance to ensure long-term financial stability.

Cash Flow

Positive

The company's cash flow performance reveals a strong free cash flow position, with a substantial free cash flow growth rate of 606.48% from 2023 to 2024. The operating cash flow to net income ratio is 0.23, and the free cash flow to net income ratio is 0.17 for TTM, suggesting adequate cash generation relative to net income. The cash flow stability adds to the company's financial resilience despite fluctuations in operating cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.06B	3.00B	2.76B	2.92B	2.78B	2.34B
Gross Profit	568.45M	601.79M	580.14M	643.43M	540.80M	372.21M
EBITDA	312.31M	355.57M	283.75M	364.39M	271.39M	143.42M
Net Income	215.19M	242.01M	205.89M	225.49M	607.82M	50.93M
Balance Sheet
Total Assets	2.55B	2.61B	2.49B	2.56B	2.32B	1.83B
Cash, Cash Equivalents and Short-Term Investments	73.98M	209.98M	434.12M	326.20M	245.97M	262.49M
Total Debt	942.37M	1.02B	1.14B	1.29B	1.37B	1.57B
Total Liabilities	1.73B	1.81B	1.91B	2.18B	2.15B	2.26B
Stockholders Equity	820.37M	800.35M	581.74M	383.04M	174.90M	-436.93M
Cash Flow
Free Cash Flow	-28.02M	5.78M	416.45M	76.87M	204.27M	289.45M
Operating Cash Flow	-10.04M	23.64M	435.27M	89.47M	210.21M	292.83M
Investing Cash Flow	-42.22M	-46.47M	-78.23M	-2.15M	9.00M	2.14M
Financing Cash Flow	-59.45M	-187.93M	-261.71M	-16.52M	-217.27M	-167.77M

Hovnanian Enterprises Technical Analysis

Technical Analysis Sentiment

Positive

Last Price154.17

Price Trends

50DMA

128.44

Positive

100DMA

113.15

Positive

200DMA

122.41

Positive

Market Momentum

MACD

4.65

Positive

RSI

63.16

Neutral

STOCH

75.67

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HOV, the sentiment is Positive. The current price of 154.17 is above the 20-day moving average (MA) of 144.90, above the 50-day MA of 128.44, and above the 200-day MA of 122.41, indicating a bullish trend. The MACD of 4.65 indicates Positive momentum. The RSI at 63.16 is Neutral, neither overbought nor oversold. The STOCH value of 75.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
MHO	80 Outperform	$4.06B	8.61	17.56%	―	7.39%	-1.37%
TPH	79 Outperform	$3.18B	9.25	11.38%	―	-3.59%	-10.82%
HOV	79 Outperform	$826.69M	7.26	20.08%	―	7.97%	-35.64%
CCS	73 Outperform	$2.03B	7.96	10.34%	1.62%	3.76%	-17.55%
LGIH	68 Neutral	$1.51B	10.11	7.84%	―	-7.89%	-19.53%
BZH	65 Neutral	$771.98M	11.91	5.65%	―	9.97%	-52.57%
Sector *	61 Neutral	$17.97B	12.87	-5.30%	2.97%	1.26%	-14.45%

* Consumer Cyclical Sector Average

Performance Comparison

HOV

Hovnanian Enterprises

154.17

-34.85

-18.44%

BZH

Beazer Homes

26.26

-4.86

-15.62%

MHO

M/I Homes

156.91

1.32

0.85%

TPH

Tri Pointe

37.14

-4.86

-11.57%

LGIH

LGI Homes

67.01

-38.23

-36.33%

CCS

Century Communities

69.66

-24.10

-25.70%

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.Date of analysis: Aug 21, 2025