AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 3/6 · 18/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Deposit-limited withdrawal rights, absence of typical completion guarantees, pre-sold construction and established panelization provide a demonstrated capital-efficiency structure. Relative cost superiority and exclusivity remain unquantified.
durability · 2/4 · Consistent contractual protection across annual filings and its continued 2026 use support persistence. Issuer-reported downturn profitability adds historical support, but rising lot costs, impairments and imitable methods limit confidence in durable competitive superiority.
customer dependency · 1/4 · Cancellations and competition on price, location and other home attributes indicate fragile customer commitment. The improving 2026 cancellation rate supports demand retention but does not establish lock-in or repeat purchasing.
erosion resilience · 2/4 · Capped land exposure, historical downturn profitability and continued positive 2026 pretax profit support resilience. Declining utilization, higher deposit impairments and compressed margins demonstrate meaningful erosion despite those protections.
Pricing power—
Insufficient evidence for every rubric criterion; no category score is inferred.
realized pricing · 1/4 · Second-quarter 2026 new-order prices fell 5% and settlement prices fell 3% year over year. Management attributes lower new-order prices to both pricing pressure and product mix, so the entire decline cannot be treated as a like-for-like price cut. Realized outcomes nevertheless indicate weak pricing power.
retention · 2/4 · Demand retention is assessed indirectly from orders, backlog and cancellations. First-half 2026 orders increased and cancellations improved to 14.4% from 16.0%, following deterioration in 2025. Lower prices accompanied this improvement; no repeat-buyer rate is established.
margin resilience · 1/4 · First-half homebuilding gross margin declined to 19.4% from 21.7%, with pricing pressure, higher lot costs and deposit impairments contributing. Continuing profitability provides some protection but does not demonstrate effective cost pass-through.
contractual freedom · — · Observed pricing changes establish commercial responsiveness, but the passages do not disclose customer-contract repricing rights, binding price duration or cancellation remedies. Lot procurement flexibility cannot establish freedom to alter customer prices or terms.
Predictability84
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 50.00
- Revenue growth volatility (pp)
- 10.57
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 2.37
Financial strength—
Missing required inputs: debtFcfGrade, netDebtEbitGrade, currentRatioGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- interestCoverageGrade
- 100.00
- cashInterestPaid
- 29.89
- cashInterestCoverage
- 37.51
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- -4.05
- 3-year average SBC / revenue (%)
- 0.81
- cashConversionGrade
- 84.87
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Limited land obligations, $1.121 billion of 2025 operating cash flow and year-end net cash support discipline. First-half 2026 repurchases of approximately $990 million accompanied cash falling from approximately $1.884 billion to $1.094 billion and additional inventory and deposit investment. Share retirement is demonstrated; superior repurchase valuation and sustainable pacing are not.
incentive alignment · 3/4 · Actual compensation arrangements combine multiyear vesting with relative return-on-capital conditions for roughly half of management grants, executive stock holding requirements and a realized reduction in incentive costs after weaker performance. Issued 2026 awards corroborate implementation. Individual holding compliance and exceptional incentive outcomes are not established.
execution · 2/4 · Issuer-reported downturn profitability and a ten-year production safety record support operating capability. Current execution is mixed: orders and cancellations improved, but first-half 2026 settlements declined 14% and consolidated pretax profit fell. This assessment uses operating outcomes, not an assumption that cyclical declines alone prove management failure.
governance · 3/4 · Disclosed board independence except for the chairman, independent key committees, board approval of significant land commitments and independent review of related-person transactions establish substantive oversight structures. Their effectiveness and complete shareholder rights are not fully demonstrated.
Evidence
Instead, we typically acquire finished building lots from various third-party land developers pursuant to fixed price lot purchase agreements (“LPAs”) that require deposits that may be forfeited if we fail to perform under the LPAs.
Business / fixed-price lot purchase agreements · Filed 11/02/2026
The deposits required under the LPAs are in the form of cash or letters of credit in varying amounts and typically range up to 10% of the aggregate purchase price of the finished lots.
Business / typical lot deposit requirements · Filed 11/02/2026
We may, at our option, choose for any reason and at any time not to perform under these LPAs by delivering notice of our intent not to acquire the finished lots under contract.
Business / option to withdraw from lot agreements · Filed 11/02/2026
Our sole legal obligation and economic loss for failure to perform under these LPAs is limited to the amount of the deposit pursuant to the liquidated damage provision contained within the LPAs.
Business / contractual loss limitation · Filed 11/02/2026
We do not have any financial guarantees or completion obligations and we typically do not guarantee lot purchases on a specific performance basis under these LPAs.
Business / guarantees and completion obligations · Filed 11/02/2026
Our primary business is the construction and sale of single-family detached homes, townhomes and condominiums, all of which are primarily constructed on a pre-sold basis.
MD&A / predominantly pre-sold construction · Filed 05/08/2026
Production facilities: We produce large portions of our homes in our centralized production facilities, including wall panels, roof trusses and stairs, which allows us to reduce waste, effectively recycle materials, and improve accuracy and consistency in our construction.
Company overview / centralized production methods and benefits · Filed 17/03/2026
We were the only publicly traded homebuilder that remained profitable through the 2006-2011 housing downturn, the most severe since the Great Depression of the 1930s.
Company overview / issuer-reported 2006–2011 profitability comparison · Filed 17/03/2026
Our sole legal obligation and economic loss for failure to perform under these LPAs is limited to the amount of the deposit pursuant to the liquidated damage provision contained within the LPAs.
Business / 2023 contractual deposit loss limitation · Filed 14/02/2024
Instead, we typically acquire finished building lots from various third-party land developers pursuant to fixed price finished lot purchase agreements (“LPAs”).
MD&A / continued use of fixed-price finished lot agreements · Filed 05/08/2026
Horton reports operational emissions, while PulteGroup, Taylor Morrison Homes, and KB Home disclose both their operational and value chain emissions.[5] Additionally, while NVR states that it uses certain energy-efficient appliances and, in 2024 disclosed the average energy efficiency of its homes,[6] those homes lagged the energy efficiency scores of peers including PulteGroup, Taylor Morrison Homes, and KB Home.[7] NVR’s lack of transparency denies investors the ability to adequately assess its climate-related risk and its ability to take advantage of market opportunities at a time when capital markets are increasingly demanding such information.
Shareholder proposal / named homebuilder comparisons and alleged energy-efficiency shortcomings · Filed 17/03/2026
We face competition: •for suitable and desirable lots at acceptable prices; •from selling incentives offered by competing builders within and across developments; and •from the existing home resale market.
Risk factors / competition for lots and homebuyers · Filed 11/02/2026
Our plant utilization was 45% and 49% of total capacity in 2025 and 2024, respectively.
Properties / production plant utilization · Filed 11/02/2026
Gross profit margins were negatively impacted by higher lot costs, pricing pressure due to continued affordability challenges and contract land deposit impairments totaling approximately $75,900 in 2025.
MD&A / 2025 pricing pressure, lot costs and deposit impairments · Filed 11/02/2026
23 Table of Contents Homebuilding Operations The following table summarizes the results of operations and other data for our homebuilding operations: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Financial Data: Revenues $ 2,279,771 $ 2,548,267 $ 4,114,650 $ 4,898,712 Cost of sales $ 1,841,217 $ 1,999,983 $ 3,315,756 $ 3,835,358 Gross profit margin percentage 19.2 % 21.5 % 19.4 % 21.7 % Selling, general and administrative expenses $ 150,721 $ 149,170 $ 307,692 $ 314,287 Operating Data: New orders (units) 5,885 5,379 11,623 10,724 Average new order price $ 437.1 $ 458.1 $ 438.6 $ 453.3 Settlements (units) 5,058 5,475 9,073 10,608 Average settlement price $ 450.7 $ 465.4 $ 453.5 $ 461.8 Backlog (units) 10,998 10,069 Average backlog price $ 453.9 $ 472.1 New order cancellation rate 14.9 % 16.5 % 14.4 % 16.0 % Consolidated Homebuilding - Three Months Ended June 30, 2026 and 2025 Homebuilding revenues decreased 11% in the second quarter of 2026 compared to the same period in 2025, as a result of a 8% decrease in units settled, coupled with a 3% decrease in average price of units settled.
MD&A / quarterly and six-month homebuilding operating results · Filed 05/08/2026
Gross profit margin was negatively impacted by higher lot costs, pricing pressure due to continued affordability challenges and weak consumer sentiment.
MD&A / second-quarter 2026 sources of margin pressure · Filed 05/08/2026
In addition, margins were impacted by contract land deposit impairments totaling approximately $21,700, compared to $13,200 in the second quarter of 2025.
MD&A / second-quarter 2026 deposit impairments · Filed 05/08/2026
In certain specific strategic circumstances, we deviate from our historical lot acquisition strategy and engage in joint venture arrangements with land developers or directly acquire raw ground already zoned for its intended use for development.
MD&A / departures from historical lot acquisition strategy · Filed 05/08/2026
The decrease in the average sales price of New Orders is attributable to pricing pressure and a relative product mix shift in New Orders from single family detached homes to single family attached homes, which generally sell at lower prices.
MD&A / pricing pressure and product mix behind lower new-order prices · Filed 05/08/2026
Expressed as the total of all cancellations during the period as a percentage of gross sales during the period, our cancellation rate was approximately 17%, 14% and 13% in 2025, 2024, and 2023, respectively.
Business / 2023–2025 cancellation rates · Filed 11/02/2026
Our homebuilding operations compete primarily on the basis of price, location, design, quality, service and reputation.
Risk factors / homebuilding competitive dimensions · Filed 11/02/2026
Net cash provided by operating activities was $1,121,320, due primarily to cash provided by earnings in 2025, and a decrease in inventory of $335,147 attributable to a decrease in units under construction year over year.
Liquidity / 2025 operating cash generation · Filed 11/02/2026
For the six months ended June 30, 2026, we repurchased 144,896 shares of our common stock at an aggregate purchase price of $989,733.
Liquidity / completed first-half 2026 repurchases · Filed 05/08/2026
13 Table of Contents NVR, Inc. Notes to Condensed Consolidated Financial Statements (dollars in thousands, except per share data) (unaudited) June 30, 2026 December 31, 2025 Assets: Homebuilding Mid Atlantic $ 1,502,074 $ 1,185,864 Homebuilding North East 414,917 374,313 Homebuilding Mid East 472,769 359,826 Homebuilding South East 1,133,382 971,162 Mortgage Banking 554,360 760,020 Total segment assets 4,077,502 3,651,185 Reconciling items (1): Cash and cash equivalents 1,093,736 1,883,844 Deferred taxes 151,303 143,666 Intangible assets 48,927 48,927 Operating lease right-of-use assets 110,893 110,535 Finance lease right-of-use assets 35,924 39,080 Contract land deposit allowance (134,928) (110,958) Consolidation adjustments and other 87,263 90,651 Reconciling items sub-total 1,393,118 2,205,745 Consolidated assets $ 5,470,620 $ 5,856,930 (1) All reconciling items except for the "intangible assets" are related to the Homebuilding Segment only.
Segment financial information / cash and deposit allowance balances · Filed 05/08/2026
Cash was primarily used to fund the increase in inventory of $511,729, attributable to an increase in units under construction as of June 30, 2026 compared to December 31, 2025, and an increase of $106,509 in contract land deposits.
Cash flows / first-half 2026 inventory and deposit investment · Filed 05/08/2026
Grants to key management employees are generally divided such that vesting for 50% of the grant is contingent solely on continued employment, while vesting for the remaining 50% of the grant is contingent upon both continued employment and the achievement of a performance metric based on our return on capital performance relative to a peer group during a three year period specified on the date of grant.
Equity-based compensation / service and relative return-on-capital vesting conditions · Filed 05/08/2026
During the second quarter of 2026, we issued 44,318 Options and 5,486 RSUs to key management employees and Directors, substantially all of which vest on December 31, 2028.
Equity-based compensation / grants actually issued in second-quarter 2026 · Filed 05/08/2026
These guidelines require the executive officers to acquire and continuously hold shares with a total fair market value ranging from four to eight times their annual base salaries depending on position.
Compensation / executive stock holding requirements · Filed 17/03/2026
These increases were offset by a decrease of approximately $36,100 in incentive compensation costs year over year due to weaker company performance.
MD&A / realized reduction in incentive compensation · Filed 11/02/2026
All of our Board members other than our Chairman are independent.
Governance / board independence · Filed 17/03/2026
The members of the Audit Committee, Compensation Committee and Nominating Committee are independent under the applicable rules of the NYSE and the SEC.
Governance / independent oversight committees · Filed 17/03/2026
Our lot acquisition policy is a Board-approved policy that requires Board approval of: •Lot purchase contracts above certain parameters, measured by the aggregate size of the deposit or investment; •Contracts to acquire raw land above certain parameters, measured by aggregate size of the investment; •Joint venture investments above certain parameters, measured by aggregate size of the investment; and •Related-party lot purchase contracts regardless of aggregate size of the investment.
Governance / board approval requirements for land commitments · Filed 17/03/2026
Review, Approval or Ratification of Related Person Transactions We have a policy that requires that all related person (as defined by Item 404(a) of Regulation S-K) transactions be considered, reviewed and approved or ratified by the disinterested, independent members of our Board, regardless of the type of transaction or amount involved.
Governance / independent approval of related-person transactions · Filed 17/03/2026
12 Table of Contents NVR, Inc. Notes to Condensed Consolidated Financial Statements (dollars in thousands, except per share data) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Segment profit Homebuilding Mid Atlantic $ 105,550 $ 191,390 $ 196,859 $ 378,223 Homebuilding North East 38,933 57,964 71,382 113,075 Homebuilding Mid East 58,881 61,729 93,547 115,338 Homebuilding South East 48,099 51,518 76,744 97,248 Mortgage Banking 26,469 30,825 54,400 64,531 Total segment profit 277,932 393,426 492,932 768,415 Reconciling items: Contract land deposit allowance adjustment (2) (21,664) (13,153) (30,481) (21,270) Equity-based compensation expense (3) (19,293) (17,813) (32,580) (36,339) Corporate capital allocation (4) 96,796 91,898 183,256 179,525 Unallocated corporate overhead (36,673) (34,364) (92,673) (90,333) Consolidation adjustments and other (5) 17,016 13,538 34,834 17,470 Corporate interest income 11,215 20,276 28,574 45,475 Corporate interest expense (6,688) (6,675) (13,527) (13,806) Reconciling items sub-total 40,709 53,707 77,403 80,722 Consolidated profit before taxes $ 318,641 $ 447,133 $ 570,335 $ 849,137 (2) This item represents changes to the contract land deposit impairment allowance, which are not allocated to the reportable segments.
Segment reconciliation / first-half 2026 consolidated profit before tax · Filed 05/08/2026
In 2025, we continued our robust share repurchase program by repurchasing over $1.8 billion of outstanding stock, while maintaining a strong balance sheet with a net cash balance of $975 million at December 31, 2025.
Capital allocation / 2025 repurchases and year-end net cash · Filed 17/03/2026
Over the last ten years, our production facilities maintained a safety incident rate approximately 23% lower than the industry average.
Company overview / ten-year production safety comparison · Filed 17/03/2026
