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Hovnanian (HOV)
NYSE:HOV
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Hovnanian Enterprises
(NYSE:HOV)
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Rating:60Neutral
Price Target:
$103.00
▼(-22.66% Downside)
Hovnanian Enterprises' overall stock score reflects a combination of strong financial management and undervaluation, tempered by bearish technical indicators and mixed earnings call sentiment. The company's strategic debt restructuring is a positive factor, but challenges in revenue growth and market conditions weigh on the outlook.
Positive Factors
Debt Restructuring
The restructuring optimizes the debt profile, enhances financial flexibility, and strengthens the balance sheet, supporting long-term stability.
Community Growth
Steady growth in community numbers indicates a strong market presence and potential for future revenue expansion.
Cash Flow Generation
Improved cash flow generation enhances operational flexibility and supports reinvestment in growth opportunities.
Negative Factors
Revenue Decline
A significant revenue decline indicates challenges in maintaining market share and could impact future profitability.
High Incentives
Increased incentives pressure margins, reducing profitability and potentially affecting long-term financial health.
Decreased Lot Count
A reduced lot count limits future development opportunities, impacting long-term growth potential and revenue streams.
Hovnanian Enterprises (HOV) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$586.25M
Dividend YieldN/A
Average Volume (3M)122.56K
Price to Earnings (P/E)13.2
Beta (1Y)1.44
Revenue Growth-0.84%
EPS Growth-76.30%
CountryUS
Employees1,878
SectorConsumer Cyclical
Sector Strength84
IndustryResidential Construction
Share Statistics
EPS (TTM)-0.51
Shares Outstanding5,167,955
10 Day Avg. Volume127,105
30 Day Avg. Volume122,559
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 Cap2.66
Enterprise Value/Revenue0.50
Enterprise Value/Gross Profit2.86
Enterprise Value/Ebitda6.47
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.17
Revenue Forecast (FY)$3.17B
Hovnanian Enterprises Business Overview & Revenue Model
Company DescriptionHovnanian Enterprises, Inc. (HOV) is a prominent homebuilder in the United States, primarily engaged in the development of residential properties. Founded in 1959, the company operates in various sectors, including single-family homes, multi-family homes, and active adult communities. Hovnanian focuses on creating diverse housing solutions tailored to meet the needs of different demographics, with a portfolio that includes both entry-level and luxury homes across multiple states.
How the Company Makes MoneyHovnanian Enterprises generates revenue primarily through the sale of residential properties, which includes the construction and sale of single-family homes and condominiums. The company builds homes in a variety of price ranges, enabling it to target a broad customer base. Key revenue streams include home sales, which account for the bulk of its income, as well as ancillary services such as mortgage financing and title insurance through its subsidiaries. Hovnanian also benefits from strategic partnerships with suppliers and subcontractors, allowing for cost efficiencies and improved margins. Additionally, the company may engage in joint ventures for land development, further enhancing its revenue potential.
Hovnanian Enterprises Earnings Call Summary
Earnings Call Date:Dec 04, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Mar 03, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture, with the company achieving or surpassing guidance metrics in several areas, like revenue and EBITDA, and successfully refinancing debt. However, significant year-over-year revenue declines, reduced contracts, and high incentives pressuring margins highlighted challenges in the current market environment. The sentiment reflects a cautious outlook with positive long-term strategic positioning.Q4-2025 Updates
Positive Updates
Revenue and Margin Performance
Revenues reached $818 million, surpassing the midpoint of guidance. Adjusted gross margin came in at 16.3%, near the high end of guidance.
Adjusted EBITDA Exceeds Expectations
Adjusted EBITDA for the quarter was $89 million, exceeding the guidance range.
Strong Community Growth
Ended the quarter with 156 communities open for sale, reflecting steady growth and focus on expanding the top line.
Successful Debt Refinancing
For the first time since 2008, all debt except for revolving credit facility is now unsecured, strengthening the balance sheet and providing greater financial flexibility.
Positive Traffic Trends
Traffic per community increased significantly in three of four months compared to last year, highlighting a positive trend in buyer interest.
Negative Updates
Year-over-Year Revenue Decline
Total revenues declined by 17% year over year, primarily driven by a 13% reduction in deliveries and the absence of a significant land sale from the previous year.
Decline in Contracts and Challenging Sales Environment
Number of contracts in the fourth quarter fell by 8% compared to last year, reflecting overall market conditions and economic uncertainties.
High Incentives Pressure Margins
Incentives accounted for 12.2% of the average sales price, up 370 basis points compared to a year ago, pressuring margins.
Decreased Lot Count
Lot count decreased 14% year over year due to disciplined land acquisition and postponement of less attractive deals.
Company Guidance
During Hovnanian Enterprises, Inc.'s Fiscal 2025 Fourth Quarter Earnings Conference Call, the company provided guidance that was met or exceeded across key financial metrics. Revenues reached $818 million, surpassing the midpoint of their guidance, while the adjusted gross margin was 16.3%, near the high end of expectations. SG&A expenses were 11.2%, close to the lower end of guidance, and income from unconsolidated joint ventures slightly exceeded expectations at $13 million. Adjusted EBITDA was reported at $89 million, exceeding the guidance range, and adjusted pretax income was $49 million, near the midpoint of guidance. Despite a 17% year-over-year decline in total revenues due to a reduction in deliveries and the absence of significant land sales, the company maintained its strategic focus on sales pace over price, using mortgage rate buy-downs to support affordability. The QMI sales strategy continued to be effective, although challenges like higher interest expenses and a mix of older, lower-margin lots impacted profitability. The company remains optimistic about future improvements as newer land acquisitions are expected to enhance margins.Hovnanian Enterprises Financial Statement Overview
Summary
Hovnanian Enterprises demonstrates strong gross margins and improved cash flow generation, but faces challenges in revenue growth and net profitability. The balance sheet shows better leverage management, yet the return on equity has declined. Overall, the company is managing its operations efficiently but needs to focus on enhancing revenue growth and profitability.Income Statement
Hovnanian Enterprises shows a strong gross profit margin of 96.81% in the latest year, indicating efficient cost management. However, the net profit margin is relatively low at 2.14%, and revenue has declined by 5.15%, suggesting challenges in maintaining top-line growth. The EBIT and EBITDA margins have also decreased compared to previous years, reflecting reduced operational efficiency.65
Positive
Balance Sheet
The company's debt-to-equity ratio has improved to 1.12 from higher levels in previous years, indicating better leverage management. However, the return on equity has decreased significantly to 7.69%, suggesting reduced profitability from shareholders' equity. Overall, the balance sheet shows improvement in leverage but challenges in equity returns.55
Neutral
Cash Flow
Operating cash flow has increased significantly, with a strong free cash flow growth of 46.29%, indicating improved cash generation capabilities. The operating cash flow to net income ratio is robust, suggesting efficient conversion of income to cash. However, the free cash flow to net income ratio is slightly below 1, indicating room for improvement in cash flow efficiency.70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.14B | 2.98B | 3.00B | 2.76B | 2.92B | 2.78B |
| Gross Profit | 545.68M | 2.88B | 601.79M | 580.14M | 643.43M | 540.80M |
| EBITDA | 240.86M | 135.39M | 355.57M | 283.75M | 364.39M | 271.39M |
| Net Income | 158.88M | 63.87M | 242.01M | 205.89M | 225.49M | 607.82M |
Balance Sheet | ||||||
| Total Assets | 2.63B | 2.63B | 2.61B | 2.49B | 2.56B | 2.32B |
| Cash, Cash Equivalents and Short-Term Investments | 146.59M | 285.38M | 209.98M | 434.12M | 326.20M | 245.97M |
| Total Debt | 941.32M | 930.21M | 1.02B | 1.17B | 1.31B | 1.39B |
| Total Liabilities | 1.79B | 1.80B | 1.81B | 1.91B | 2.18B | 2.15B |
| Stockholders Equity | 835.36M | 830.93M | 800.35M | 581.74M | 383.04M | 174.90M |
Cash Flow | ||||||
| Free Cash Flow | 113.60M | 166.18M | 5.78M | 416.45M | 76.87M | 204.27M |
| Operating Cash Flow | 135.03M | 188.28M | 23.64M | 435.27M | 89.47M | 210.21M |
| Investing Cash Flow | -66.81M | -66.01M | -46.47M | -78.23M | -2.15M | 9.00M |
| Financing Cash Flow | -57.27M | -70.39M | -187.93M | -261.71M | -16.52M | -217.27M |
Hovnanian Enterprises Technical Analysis
Negative
133.18
Price Trends
118.55
Negative
129.01
Negative
116.34
Negative
Market Momentum
-5.46
Positive
35.06
Neutral
18.28
Positive
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 133.18 is above the 20-day moving average (MA) of 111.70, above the 50-day MA of 118.55, and above the 200-day MA of 116.34, indicating a bearish trend. The MACD of -5.46 indicates Positive momentum. The RSI at 35.06 is Neutral, neither overbought nor oversold. The STOCH value of 18.28 is Positive, 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 |
|---|---|---|---|---|---|---|---|
75 Outperform | $3.32B | 7.46 | 15.76% | ― | 4.77% | -9.30% | |
73 Outperform | $2.73B | 9.37 | 9.47% | ― | -16.60% | -29.85% | |
69 Neutral | $1.71B | 8.51 | 8.37% | 1.99% | -6.28% | -31.55% | |
65 Neutral | $979.02M | 9.36 | 5.21% | ― | -20.62% | -45.74% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | $586.25M | 13.23 | 7.69% | ― | -0.84% | -76.30% | |
56 Neutral | $598.17M | 13.09 | 3.67% | ― | 1.77% | -66.27% |
* Consumer Cyclical Sector Average
HOV
Hovnanian Enterprises
97.99
-35.28
-26.47%
BZH
Beazer Homes
20.10
-7.51
-27.20%
MHO
M/I Homes
127.09
-6.88
-5.14%
TPH
Tri Pointe
31.71
-4.49
-12.40%
LGIH
LGI Homes
42.42
-47.17
-52.65%
CCS
Century Communities
58.25
-14.02
-19.40%
Hovnanian Enterprises Corporate Events
Private Placements and Financing
Hovnanian Enterprises Completes $900M Senior Notes Placement
Positive
Sep 25, 2025
On September 25, 2025, K. Hovnanian Enterprises, Inc. completed a private placement of $900 million in senior notes, which will mature in 2031 and 2033. The proceeds were used to redeem existing secured notes, discharge related security documents, and repay outstanding loans, thereby releasing liens on collateral and discharging obligations under previous agreements. This financial restructuring aims to optimize the company’s debt profile and enhance its financial flexibility.
Executive/Board Changes
Hovnanian Enterprises Announces New Executive Appointments
Neutral
Sep 23, 2025
Hovnanian Enterprises announced that its Board of Directors has appointed Alexander Hovnanian as President and Michael Wyatt as Chief Operating Officer, effective November 1, 2025. On September 17, 2025, the Compensation Committee approved a compensation package for both executives, including a base salary of $750,000 and a target multiple of 1.25 for long-term incentive awards.
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.