11 hours ago
NVR, Inc. (NVR): A Bull Case Theory
We came across a bullish thesis on NVR, Inc. (NVR) on Charts&Compaies's Substack. In this article, we will summarize the bulls' thesis on NVR. NVR, Inc. (NVR)'s share was trading at $7,221.25 as of 16th June. NVR's trailing and forward P/E were 14.89 and 15.41 respectively according to Yahoo Finance.
A team of construction workers laboring together to build a townhome complex.
NVR presents a compelling investment case rooted in robust financial health, strong growth metrics, and attractive valuation. With total assets of $6.2 billion and cash holdings of $2.17 billion versus total liabilities of $2.24 billion, the company's liquidity is notably strong—cash alone nearly covers all liabilities.
Historically, NVR has delivered consistent 12% revenue-per-share growth, while maintaining solid book value expansion of around 15%, underscoring a well-managed balance sheet. Asset growth consistently outpaces liabilities, adding further confidence to its financial footing. Earnings have compounded at a 10-year CAGR of approximately 20%, supported by a P/E ratio of 14.38—well below the historical median of 18.35—indicating potential undervaluation.
The company's low PEG ratio of 0.71 and a P/FCF of 16 against 20% free cash flow growth (TTM) provide further evidence of attractive value. EBIT and EBITDA have grown at ~16%, with margins just under historical medians but still healthy. ROA and ROE stand at an impressive 25% and 40% respectively, reflecting operational excellence and capital efficiency. Margins remain solid across the board, with gross, operating, and net margins of 25%, 19.6%, and 15%.
A DCF valuation based on EPS of $502.45 and a median P/E of 18 suggests the stock could be worth nearly double its current price of $7,225, with an upside even to the mid-$9,000s under optimistic scenarios.
Despite its high absolute share price, NVR remains a potentially overlooked value play. With its combination of strong cash flow, high returns, and sustainable growth, the stock offers a favorable risk-reward profile.
Previously, we highlighted a bullish thesis on NVR by Kairos Research, focusing on its land-light model, fortress balance sheet, and unmatched capital discipline. Charts&Companies extends this view with a valuation-driven lens—emphasizing NVR's superior ROE, robust per-share growth, and undervalued PEG and P/E ratios. Together, these theses converge on NVR's appeal as a financially exceptional compounder hiding behind a high nominal share price.
NVR, Inc. (NVR) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held NVR, Inc. (NVR) at the end of the first quarter which was 45 in the previous quarter. While we acknowledge the risk and potential of NVR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article was originally published at Insider Monkey.
