Hovnanian stock sinks after Q3 earnings miss as home prices dip

[Drone view of a residential building site under construction]
Justin Paget

Hovnanian Enterprises (NYSE:HOV [https://seekingalpha.com/symbol/HOV]) stock slid 12% in Thursday morning trading after the homebuilder's fiscal Q4 guidance wasn't strong enough to overcome investor disappointment in its fiscal Q3 results.

The company's average price of homes delivered in fiscal Q3 declined by 1.7% from a year ago.

The bi-coastal homebuilder, which also has a presence in Texas, expects fiscal Q4 revenue of $750M-$850M [https://seekingalpha.com/pr/20208155-hovnanian-enterprises-reports-fiscal-2025-third-quarter-results] (midpoint $800M vs. $809M consensus); and adjusted EBITDA of $77M-$88M (midpoint $83M)

Q3 EPS of $1.99, far short of the average analyst estimate of $3.51, sank from $9.75 in the year-ago quarter.

Revenue for the quarter ended July 31, 2025, was $800.6M for the quarter ended July 31, 2025, missing the consensus of $806.2M and rising from $722.7M in last year's Q3.

"Uncertainty across global, political and economic fronts continued to weigh on homebuyer sentiment, resulting in a slower sales pace than we had expected at the beginning of the fiscal year," said Chairman, President and CEO Ara K. Hovnanian. "Additionally, affordability challenges are weighing on buyer activity as home prices remain high, and mortgage rates have only seen modest declines from recent highs."

Including unconsolidated joint ventures, Q3 deliveries of 1,676 increased 13.3% Y/Y. That represents $934.0M dollars, up 11.4% from a year ago. The average price of homes delivered fell to $557.3K from $566.9K.

Q3 contracts, including unconsolidated joint ventures, increased 1.4% Y/Y to 1,416, representing $749.0M, which is down 5.3% from a year ago. Average contract price of $528.9K fell 6.7% Y/Y.

The gross cancellation rate, including domestic unconsolidated joint ventures, increased to 19% from 17% in Q3 2024.

Consolidated community count of 124 decreased by 1.6%. Including domestic unconsolidated joint ventures, community count was unchanged at 146.

Contract backlog of 1,878 homes, valued at $1.10B, dropped from 2,463 with a value of $1.46B in the year-ago quarter.

Costs and expenses of $792.3M increased from $636.1M a year ago.

Q3 adjusted EBITDA of $77.1M, above Hovnanian's (NYSE:HOV [https://seekingalpha.com/symbol/HOV]) guidance range, dropped from $131.0M in last year's Q3.

MORE ON HOVNANIAN

* Hovnanian Enterprises: A Top-Tier Homebuilder [https://seekingalpha.com/article/4800144-hovnanian-enterprises-top-tier-homebuilder]
* Hovnanian: Not Hugely Compelled To Own, But Not Very Pessimistic Either [https://seekingalpha.com/article/4798618-hovnanian-not-hugely-compelled-to-own-but-not-very-pessimistic-either]
* Hovnanian misses top-line and bottom-line estimates; initiates Q4 outlook [https://seekingalpha.com/news/4487933-hovnanian-misses-top-line-and-bottom-line-estimates-initiates-q4-outlook]
* Seeking Alpha’s Quant Rating on Hovnanian [https://seekingalpha.com/symbol/HOV/ratings/quant-ratings]