HOVNANIAN ENTERPRISES-A (HOV) Stock Fundamental Analysis
NYSE:HOV - New York Stock Exchange, Inc. - US4424874018 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to HOV. HOV was compared to 64 industry peers in the Household Durables industry. While HOV belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. HOV has a bad growth rate and is valued cheaply.
1. Profitability
1.1 Basic Checks
In the past year HOV was profitable.
HOV had a positive operating cash flow in the past year.
HOV had positive earnings in each of the past 5 years.
In the past 5 years HOV always reported a positive cash flow from operatings.
1.2 Ratios
HOV has a better Return On Assets (9.81%) than 71.88% of its industry peers.
Looking at the Return On Equity, with a value of 30.61%, HOV belongs to the top of the industry, outperforming 90.63% of the companies in the same industry.
With an excellent Return On Invested Capital value of 18.58%, HOV belongs to the best of the industry, outperforming 90.63% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for HOV is above the industry average of 11.93%.
The 3 year average ROIC (13.99%) for HOV is below the current ROIC(18.58%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.81% | ||
| ROE | 30.61% | ||
| ROIC | 18.58% |
ROA(3y)7.79%
ROA(5y)9.92%
ROE(3y)36.53%
ROE(5y)N/A
ROIC(3y)13.99%
ROIC(5y)12.81%
1.3 Margins
The Profit Margin of HOV (6.75%) is comparable to the rest of the industry.
HOV's Profit Margin has declined in the last couple of years.
With a decent Operating Margin value of 11.16%, HOV is doing good in the industry, outperforming 60.94% of the companies in the same industry.
In the last couple of years the Operating Margin of HOV has grown nicely.
HOV has a Gross Margin of 21.01%. This is in the lower half of the industry: HOV underperforms 75.00% of its industry peers.
HOV's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.16% | ||
| PM (TTM) | 6.75% | ||
| GM | 21.01% |
OM growth 3Y2.01%
OM growth 5Y17.48%
PM growth 3Y-27.87%
PM growth 5YN/A
GM growth 3Y0.84%
GM growth 5Y5.08%
2. Health
2.1 Basic Checks
HOV has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, HOV has less shares outstanding
Compared to 5 years ago, HOV has less shares outstanding
Compared to 1 year ago, HOV has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.72 indicates that HOV is not a great score, but indicates only limited risk for bankruptcy at the moment.
HOV has a Altman-Z score (2.72) which is in line with its industry peers.
The Debt to FCF ratio of HOV is 24.13, which is on the high side as it means it would take HOV, 24.13 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 24.13, HOV is not doing good in the industry: 64.06% of the companies in the same industry are doing better.
HOV has a Debt/Equity ratio of 1.21. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of HOV (1.21) is worse than 81.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | 24.13 | ||
| Altman-Z | 2.72 |
ROIC/WACC2.42
WACC7.67%
2.3 Liquidity
HOV has a Current Ratio of 2.29. This indicates that HOV is financially healthy and has no problem in meeting its short term obligations.
HOV has a Current ratio (2.29) which is in line with its industry peers.
A Quick Ratio of 0.21 indicates that HOV may have some problems paying its short term obligations.
The Quick ratio of HOV (0.21) is worse than 96.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.29 | ||
| Quick Ratio | 0.21 |
3. Growth
3.1 Past
HOV shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -11.77%.
Measured over the past years, HOV shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -28.20% on average per year.
Looking at the last year, HOV shows a quite strong growth in Revenue. The Revenue has grown by 9.03% in the last year.
Measured over the past years, HOV shows a quite strong growth in Revenue. The Revenue has been growing by 8.30% on average per year.
EPS 1Y (TTM)-11.77%
EPS 3Y-28.2%
EPS 5YN/A
EPS Q2Q%-63.51%
Revenue 1Y (TTM)9.03%
Revenue growth 3Y2.59%
Revenue growth 5Y8.3%
Sales Q2Q%-3.09%
3.2 Future
HOV is expected to show a very negative growth in Earnings Per Share. In the coming years, the EPS will decrease by -33.45% yearly.
The Revenue is expected to grow by 1.95% on average over the next years.
EPS Next Y-59.32%
EPS Next 2Y-33.45%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-1.53%
Revenue Next 2Y1.95%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 3.08, the valuation of HOV can be described as very cheap.
Compared to the rest of the industry, the Price/Earnings ratio of HOV indicates a rather cheap valuation: HOV is cheaper than 96.88% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of HOV to the average of the S&P500 Index (25.91), we can say HOV is valued rather cheaply.
HOV is valuated cheaply with a Price/Forward Earnings ratio of 6.21.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HOV indicates a rather cheap valuation: HOV is cheaper than 84.38% of the companies listed in the same industry.
HOV is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.85, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 3.08 | ||
| Fwd PE | 6.21 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HOV is valued cheaper than 95.31% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, HOV is valued a bit cheaper than 71.88% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.8 | ||
| EV/EBITDA | 3.38 |
4.3 Compensation for Growth
The decent profitability rating of HOV may justify a higher PE ratio.
A cheap valuation may be justified as HOV's earnings are expected to decrease with -33.45% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-33.45%
EPS Next 3YN/A
5. Dividend
5.1 Amount
No dividends for HOV!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
87.89
-1.43 (-1.6%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryHousehold Durables
Earnings (Last)
Earnings (Next)
Inst Owners67.1%
Inst Owner Change-5.09%
Ins Owners3.51%
Ins Owner Change0.56%
Market Cap509.76M
Analysts45
Price Target122.4 (39.26%)
Short Float %4.86%
Short Ratio3.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend1.76
Dividend Growth(5Y)8.98%
DP4.3%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)-22.58%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-67.4%
EPS NY rev (1m)0%
EPS NY rev (3m)-56.97%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-11.39%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-13.61%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 3.08 | ||
| Fwd PE | 6.21 | ||
| P/S | 0.14 | ||
| P/FCF | 12.8 | ||
| P/OCF | 9.17 | ||
| P/B | 0.64 | ||
| P/tB | 0.64 | ||
| EV/EBITDA | 3.38 |
EPS(TTM)28.55
EY32.48%
EPS(NY)14.15
Fwd EY16.1%
FCF(TTM)6.87
FCFY7.82%
OCF(TTM)9.59
OCFY10.91%
SpS621.38
BVpS137.07
TBVpS137.07
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.81% | ||
| ROE | 30.61% | ||
| ROCE | 23.71% | ||
| ROIC | 18.58% | ||
| ROICexc | 19.65% | ||
| ROICexgc | 21.83% | ||
| OM | 11.16% | ||
| PM (TTM) | 6.75% | ||
| GM | 21.01% | ||
| FCFM | 1.11% |
ROA(3y)7.79%
ROA(5y)9.92%
ROE(3y)36.53%
ROE(5y)N/A
ROIC(3y)13.99%
ROIC(5y)12.81%
ROICexc(3y)16.7%
ROICexc(5y)15.21%
ROICexgc(3y)18.6%
ROICexgc(5y)17.04%
ROCE(3y)17.85%
ROCE(5y)16.34%
ROICexcg growth 3Y-0.28%
ROICexcg growth 5Y20.6%
ROICexc growth 3Y0.26%
ROICexc growth 5Y21.31%
OM growth 3Y2.01%
OM growth 5Y17.48%
PM growth 3Y-27.87%
PM growth 5YN/A
GM growth 3Y0.84%
GM growth 5Y5.08%
F-Score6
Asset Turnover1.45
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | 24.13 | ||
| Debt/EBITDA | 2.34 | ||
| Cap/Depr | 191.01% | ||
| Cap/Sales | 0.44% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 13.55% | ||
| Profit Quality | 16.37% | ||
| Current Ratio | 2.29 | ||
| Quick Ratio | 0.21 | ||
| Altman-Z | 2.72 |
F-Score6
WACC7.67%
ROIC/WACC2.42
Cap/Depr(3y)224.68%
Cap/Depr(5y)169.9%
Cap/Sales(3y)0.57%
Cap/Sales(5y)0.41%
Profit Quality(3y)91.47%
Profit Quality(5y)187.32%
High Growth Momentum
Growth
EPS 1Y (TTM)-11.77%
EPS 3Y-28.2%
EPS 5YN/A
EPS Q2Q%-63.51%
EPS Next Y-59.32%
EPS Next 2Y-33.45%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)9.03%
Revenue growth 3Y2.59%
Revenue growth 5Y8.3%
Sales Q2Q%-3.09%
Revenue Next Year-1.53%
Revenue Next 2Y1.95%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y21.52%
EBIT growth 3Y4.66%
EBIT growth 5Y27.23%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-74.62%
FCF growth 3Y-69.53%
FCF growth 5YN/A
OCF growth 1Y-67.38%
OCF growth 3Y-51.73%
OCF growth 5YN/A