HOVHovnanian Enterprises, Inc.
Is the business good?
The checks split: earnings fully cash-backed (7.5×), but margins compressing.
Operating profit is fully backed by cash. Conversion is improving vs a year ago.
Operating margin has narrowed over the past few years, profitability per dollar of sales is eroding.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is HOV?
Hovnanian Enterprises, Inc. earns 1.7% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
Return on invested capital · cost of capital 9.0% · 7.3 points below what the capital costs: growth destroys value
- Operating margin
- 1.3%
Operating margin · Residential Construction median 9.3% · 12 months to Q3 2026
- Cash conversion
- 7.49×
Cash conversion · 1.12× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- −6.9%
Share count, year on year · bought back, each share owns more of the company
| Year | Operating margin |
|---|---|
| FY2020 | 1.1% |
| FY2021 | 6.6% |
| FY2022 | 10% |
| FY2023 | 8.6% |
| FY2024 | 8.8% |
| FY2025 | 2.4% |
Details›
- Operating margin12 months to Q3 2026
- 1.3%
- Free cash flow margin
- 7.0%
- Revenue, trailing twelve months
- $2.82B
- Free cash flow, trailing twelve months
- $198M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 1.7%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Residential Construction
Ranks #10 of 13 by RyuScore