As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at home builders stocks, starting with NVR (NYSE: NVR).
Traditionally, homebuilders have built competitive advantages with economies of scale that lead to advantaged purchasing and brand recognition among consumers. Aesthetic trends have always been important in the space, but more recently, energy efficiency and conservation are driving innovation. However, these companies are still at the whim of the macro, specifically interest rates that heavily impact new and existing home sales. In fact, homebuilders are one of the most cyclical subsectors within industrials.
The 12 home builders stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 4.1%.
Luckily, home builders stocks have performed well with share prices up 10.9% on average since the latest earnings results.
NVR (NYSE: NVR)
Known for its unique land acquisition strategy, NVR (NYSE: NVR) is a respected homebuilder and mortgage company in the United States.
NVR reported revenues of $2.60 billion, flat year on year. This print exceeded analysts’ expectations by 5.4%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ adjusted operating income estimates.
Interestingly, the stock is up 3.4% since reporting and currently trades at $8,170.
Read our full report on NVR here, it’s free.
Best Q2: Champion Homes (NYSE: SKY)
Founded in 1951, Champion Homes (NYSE: SKY) is a manufacturer of modular homes and buildings in North America.
Champion Homes reported revenues of $701.3 million, up 11.7% year on year, outperforming analysts’ expectations by 9.2%. The business had an incredible quarter with a solid beat of analysts’ sales volume and EPS estimates.
Champion Homes scored the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 12.6% since reporting. It currently trades at $74.56.
Is now the time to buy Champion Homes? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Lennar (NYSE: LEN)
One of the largest homebuilders in America, Lennar (NYSE: LEN) is known for constructing affordable, move-up, and retirement homes across a range of markets and communities.
Lennar reported revenues of $8.38 billion, down 4.4% year on year, exceeding analysts’ expectations by 1.1%. Still, it was a softer quarter as it posted a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.
Interestingly, the stock is up 21.1% since the results and currently trades at $132.55.
Read our full analysis of Lennar’s results here.
TopBuild (NYSE: BLD)
Established in 2015 following a spinoff from Masco Corporation, TopBuild (NYSE: BLD) is a distributor and installer of insulation and other building products.
TopBuild reported revenues of $1.30 billion, down 5% year on year. This result met analysts’ expectations. Overall, it was a strong quarter as it also recorded full-year EBITDA guidance beating analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
TopBuild had the weakest performance against analyst estimates among its peers. The stock is up 7.8% since reporting and currently trades at $417.52.
Read our full, actionable report on TopBuild here, it’s free.
Installed Building Products (NYSE: IBP)
Founded in 1977, Installed Building Products (NYSE: IBP) is a company specializing in the installation of insulation, waterproofing, and other complementary building products for residential and commercial construction.
Installed Building Products reported revenues of $760.3 million, up 3.1% year on year. This print beat analysts’ expectations by 6.7%. It was an incredible quarter as it also produced a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.
The stock is up 22.3% since reporting and currently trades at $259.
Read our full, actionable report on Installed Building Products here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
