Hovnanian Enterprises, Inc.
Hovnanian Enterprises, Inc. Fundamental Analysis
Hovnanian Enterprises, Inc. (HOV) shows weak financial fundamentals with a PE ratio of 12.23, profit margin of 1.92%, and ROE of 6.81%. The company generates $2.3B in annual revenue with weak year-over-year growth of -0.88%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 35.9/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze HOV's fundamental strength across five key dimensions:
Efficiency Score
WeakHOV struggles to generate sufficient returns from assets.
Valuation Score
ExcellentHOV trades at attractive valuation levels.
Growth Score
WeakHOV faces weak or negative growth trends.
Financial Health Score
ModerateHOV shows balanced financial health with some risks.
Profitability Score
WeakHOV struggles to sustain strong margins.
Key Financial Metrics
Is HOV Expensive or Cheap?
P/E Ratio
HOV trades at 12.23 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, HOV's PEG of -0.91 indicates potential undervaluation.
Price to Book
The market values Hovnanian Enterprises, Inc. at 0.83 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -0.60 times EBITDA. This is generally considered low.
How Well Does HOV Make Money?
Net Profit Margin
For every $100 in sales, Hovnanian Enterprises, Inc. keeps $1.92 as profit after all expenses.
Operating Margin
Core operations generate 46.20 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $6.81 in profit for every $100 of shareholder equity.
ROA
Hovnanian Enterprises, Inc. generates $2.07 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Hovnanian Enterprises, Inc. produces operating cash flow of $305.74M, showing steady but balanced cash generation.
Free Cash Flow
Hovnanian Enterprises, Inc. generates strong free cash flow of $284.16M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $55.14 in free cash annually.
FCF Yield
HOV converts 65.33% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
12.23
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.91
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.83
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.19
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.16
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.02
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.07
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.67
vs 25 benchmark
How HOV Stacks Against Its Sector Peers
| Metric | HOV Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 12.23 | 23.52 | Better (Cheaper) |
| ROE | 6.81% | 1156.00% | Weak |
| Net Margin | 1.92% | 670.00% | Weak |
| Debt/Equity | 1.16 | 0.73 | Weak (High Leverage) |
| Current Ratio | 1.02 | 2.56 | Neutral |
| ROA | 2.07% | -8289.00% (disorted) | Weak |
HOV outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Hovnanian Enterprises, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
21.95%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
20.35%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
-38.30%
Industry Style: Cyclical, Growth, Discretionary
Declining