NVR Inc

NVR posted a mixed first quarter for 2025, with a sharp earnings miss overshadowing a modest revenue beat as margin pressure and a punishing tax headwind weighed heavily on the bottom line. Diluted EPS came in at $94.83, falling 10.60% short of the $106.07 consensus estimate, while revenue of $2.40 billion edged 2.47% above expectations and grew 2.8% year over year. The single most consequential driver of the earnings shortfall was a dramatic swing in tax benefits from stock option exercises, which collapsed to just $2.70 million from $43.80 million a year ago, pushing the effective tax rate to 25.5% from 16.2% and erasing a tailwind that had meaningfully supported prior-year profits. Compounding the pressure, homebuilding gross margin contracted to 21.9% from 24.5%, as higher lot costs and affordability-driven pricing constraints bit into profitability. New orders dropped 12% to 5,345 units and the cancellation rate climbed to 16%, reflecting the broader industry headwinds that analysts expect to persist well into the second half of 2025.