Is NVR Stock Underperforming the S&P 500?

Company Overview - NVR, Inc. has a market cap of $21.1 billion, making it one of the largest homebuilders in the U.S. It operates an asset-light model by purchasing finished lots, which reduces financial risk and stabilizes margins [1] - The company serves various market segments, including first-time buyers, move-up buyers, and luxury segments, across 16 East Coast and Midwestern states through brands like Ryan Homes, NVHomes, and Heartland Homes [1] - NVR's vertically integrated mortgage and title services enhance operational efficiency and improve customer experience [1] Market Position - NVR is classified as a large-cap stock due to its market cap exceeding $10 billion, reflecting its significant size and influence in the residential construction industry [2] - The company maintains a resilient competitive position supported by strong revenue, healthy profitability, and disciplined inventory management [2] Stock Performance - NVR's stock has decreased by 19.3% from its 52-week high of $9,068.15 and has dropped 11.6% over the past three months, underperforming the S&P 500 Index, which has surged by 5% during the same period [3] - Over the longer term, NVR's stock has increased by only 2.5% in the past six months and has plummeted by 19.8% over the past 52 weeks, lagging behind the S&P 500's gains of 13.9% and 13% respectively [4] Recent Financial Results - On October 22, NVR reported its Q3 results, showing a slight beat on expectations with an EPS of $112.33 compared to Wall Street's expectation of $107.88 [5] - Revenue for the quarter was $2.61 billion, surpassing projections but down from the previous year, while net income fell to $343 million due to higher lot costs and pricing constraints [5] - New orders declined by 16%, backlog dropped nearly 20%, and cancellation rates increased, indicating weaker demand and a more cautious buyer base [5]