US home builder Hovnanian Enterprises' Q3 revenue falls, posts net loss
HOV•Analyst coverage
The one available analyst rating on the shares is "sell." The average consensus recommendation for the homebuilding peer group is "hold." Wall Street's median 12-month price target for Hovnanian Enterprises, Inc. is $74.00, about 42% below its August 19 closing price of $127.67.
Quarterly results
US home builder Hovnanian Enterprises said fiscal third-quarter revenue fell year over year and the company posted a net loss for the quarter versus a profit a year ago.
| Metric | Beat/Miss | Actual | Consensus Estimate |
|---|---|---|---|
| Q3 Revenue | Miss | $705.75 mln | $723.50 mln (1 Analyst) |
| Q3 Loss Per Share | Miss | $0.70 | $0.56 (1 Analyst) |
| Q3 Net Loss | $2.22 mln | ||
| Q3 Pretax Loss | $2.78 mln |
Margins and drivers
Gross margin improved sequentially for the second quarter in a row. Hovnanian said adjusted income before income taxes was below its guidance mainly due to lower income from unconsolidated joint ventures.
Management cited affordability concerns, elevated mortgage rates, and inconsistent consumer confidence as ongoing challenges impacting results.
Fourth-quarter outlook
Hovnanian sees fourth-quarter revenue between $800 million and $900 million. The company expects fourth-quarter adjusted homebuilding gross margin of 15.0% to 16.5% and adjusted EBITDA of $50 million to $65 million.
