Please ensure Javascript is enabled for purposes of website accessibility

Why NVR Stock Rose 13.9% in April

By Joe Tenebruso - May 10, 2019 at 10:20PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The homebuilder crushed Wall Street's expectations.

What happened

Shares of NVR (NVR 2.57%) jumped nearly 14% last month, according to data provided by S&P Global Market Intelligence, following the homebuilding and mortgage-banking company's strong first-quarter results.

So what

NVR settled 15% more home sales during the first quarter. It also closed 13% more in mortgage volume. In turn, NVR's revenue rose 10% year over year, to $1.7 billion. Meanwhile, the homebuilder's earnings per share jumped 21%, to $47.64. That was significantly above analysts' estimates for earnings per share (EPS) of $33.59.

Little green toy houses on top of rising stacks of gold coins.

Image source: Getty Images.

Now what

Multiple economic trends are fueling the growth of the U.S. housing market. Low unemployment, rising wages, and declining mortgage rates are all helping to boost the affordability of new homes.

Demographic trends are also beginning to turn in NVR's favor. The U.S. population aged 35-44 is set to grow steadily over the next decade, according to Bank of America Merrill Lynch. These are key homebuying years. As the number of people in this age group increases, so, too, should demand for NVR's homebuilding services.

Moreover, the supply of new homes for sale in the U.S. is well below historical norms. So in addition to demand rising, supply remains constrained.

NVR -- as one of the nation's leading homebuilders -- should continue to profit handsomely as it helps America meet its need for new homes in the years ahead.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

NVR, Inc. Stock Quote
NVR, Inc.
$4,262.41 (2.57%) $106.73

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.