NVR
NVR, Inc.
$6,242.23
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Undervalued
Trading 25.1% below fair value
You pay
$6,242.23
Bear
$6,486.34
Fair
$8,339.58
Bull
$10,192.82
Bear
$6,486.34
+3.9%
$463.31 × 14x
Fair
$8,339.58
+33.6%
$463.31 × 18x
Bull
$10,192.82
+63.3%
$463.31 × 22x
Adjust Assumptions
18.0x
463.31$
Key Value Driver
Through-cycle normalized EPS ($463.31)
Implied Market Multiple
13.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (25 analysts)
$7148.67
Divergence from AlphaVal
17%
Summary
Using 7-year normalized EPS of $463.31 at a 18x cycle multiple, the base-case value is $8339.58 per share. P/TBV cross-check: 4.4x.
Warnings
Price-to-book value of 4.4x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing