HOV · Hovnanian Enterprises
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $110.55
Note written ·
Price against the kill line
14.8% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $110.55, on record since 11 November 2026. The shares are down 27.9% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $110.55, the 4 November 2026 close and the highest of the last 20 sessions, which would show the shares leading again. Fiscal fourth-quarter revenue above the $900 million top of the guide would also show it.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Consumer Discretionary
Quarter to 31 July 2026, filed 28 August 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 706
- Revenue, change on a year (%)
- −11.8
- Operating margin (%)
- −0.9
- Free cash flow, four quarters ($M)
- 198
- Price to earnings (×)
- 33.4
- Free-cash-flow yield (%)
- 32.7
All filed numbers
What Hovnanian Enterprises reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| first filed | 706 | −11.8 | −0.9 |
| first filed | 668 | −2.7 | 0.2 |
| first filed | 632 | −6.2 | 4.0 |
| first filed | 818 | −16.5 | 2.0 |
| first filed | 801 | +10.8 | 1.0 |
| first filed | 687 | −3.1 | 2.5 |
| Pre-tax income ($M) | −2.8 |
| Net income ($M) four quarters: 18.1 | −1.8 |
| Diluted shares, change on a year (%) against the quarter to 31 July 2025 | −6.9 |
| Operating cash flow ($M) | 219 |
| Capital spending ($M) | 21.1 |
| Free cash flow ($M) | 198 |
| Cash and short-term investments ($M) | Not reported |
| Debt ($M) long-term debt | 903 |
| Net cash, cash less debt ($M) | Not available |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | Not reported |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 819 |
| Market value ($M) | 604 |
| Enterprise value, market value plus net debt ($M) | Not available |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | 33.4 |
| Price to book value (×) | 0.7 |
| Free-cash-flow yield (%) | 32.7 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 7.0% of shares outstanding sold short, 3.9 days of average trading to cover, +3.9% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $0 | $1.8M |
The thesis
Hovnanian Enterprises' shares are more likely to lag the S&P 500 than lead it, because they are still falling into a fiscal fourth-quarter report that has to show backlog converting into the guided $800 million–$900 million of revenue. That report, expected in early December, settles the case.
The shares closed at $98.01 on 11 November 2026, down 28.1% over three months (adjusted daily closes). They had closed at $110.55 on 4 November 2026 and $105.37 on 9 November 2026, so the early-November rebound has reversed. The close sits below both the 50-day average of $108.4 and the 200-day average of $116.94, and 34.0% below the 52-week intraday high of $148.48 set on 26 June 2026.
Hovnanian's fiscal year ended on 31 October 2026, so the guided quarter is over and its results are already fixed. Until the company reports, the shares trade on mortgage rates and housing data. Freddie Mac's 30-year fixed mortgage rate averaged 7.24% in the week of 29 October 2026, down from 7.32% a week earlier, while the Federal Reserve held at 3.75%–4.00% on 28 October 2026 with two governors dissenting in favour of a hike (RealEstateNews).
Bullish and bearish views on Hovnanian Enterprises, Inc.
The bull case on Hovnanian Enterprises, Inc. (HOV), in brief: backlog is above last year. The bear case: the shares keep making lows.
Bull case
- Backlog is above last year. Hovnanian reported $881.9 million of domestic backlog at 31 July 2026, up 5.1% year over year (fiscal third-quarter results, 20 August 2026). Delivering it would support the guided fourth-quarter revenue range.
- Management gave measurable targets. On 20 August 2026 the company guided fiscal fourth-quarter revenue to $800 million–$900 million and adjusted homebuilding gross margin to 15.0%–16.5%, with no land sales assumed. Results inside both ranges would make the $4.5 million third-quarter net loss a low point.
- Mortgage rates have eased from the peak. Freddie Mac's 30-year rate was 7.24% in the week of 29 October 2026, below the 7.40% of the week of 8 October 2026, the highest since November 2023 (Freddie Mac survey as reported by Mortgage News Daily).
- New-home sales beat forecasts. The Census Bureau reported September new single-family home sales at a 676,000 annual rate on 27 October 2026, against a forecast of about 650,000 (Census Bureau; investingLive). The median new-home price was $400,400, 3.9% below a year earlier.
Bear case
- The shares keep making lows. The 52-week closing low is $90.75 on 19 October 2026, and the 11 November 2026 close of $98.01 is back near it after the 4 November 2026 close of $110.55 (adjusted daily closes). Buyers have any rebound for more than a few sessions.
- Sales are still sliding. September's 676,000 rate was 0.6% below August's, which Census revised down from 684,000 to 680,000, and 5.3% below September 2025's 714,000 (Census Bureau, 27 October 2026).
- The Fed leans toward tightening. On 28 October 2026 the Federal Reserve held on a 10–2 vote, with Governors Lisa Cook and Beth Hammack dissenting for a quarter-point increase (RealEstateNews). The CME Group's FedWatch tool then showed an 84.6% chance of a quarter-point rise at the next meeting.
- Supply is heavy. Census put new houses for sale at 476,000 at the end of September, an 8.2-month supply at the current sales rate (Census Bureau, 27 October 2026). Builders compete on price against that inventory.
- The last quarter lost money. Fiscal third-quarter revenue was $705.7 million and the net loss was $4.5 million (results, 20 August 2026). The guided fourth quarter needs at least $800 million of revenue.
Price setup
The 11 November 2026 close of $98.01 is 34.0% below the 52-week high and above the 52-week closing low of $90.75 from 19 October 2026. The 50-day average of $108.4 is falling toward the 200-day average of $116.94, and the shares sit below both (adjusted closes as of 11 November 2026).
The November range so far runs from $110.55 on 4 November 2026 to $98.01 on 11 November 2026, with $101.46 on 6 November 2026, $105.37 on 9 November 2026 and $99.70 on 10 November 2026 between. A close above the 4 November 2026 level would break the pattern of lower highs; the case turns on that line.
SEC Form 4 filings dated 4 November 2026 show the chief operating officer, the chief financial officer and a director having shares withheld for tax at $104.92 on 2 November 2026, which are tax withholdings on vesting and not market sales. Few analysts cover the stock, so published estimates and price targets are sparse, and the company has not confirmed the date of its fiscal fourth-quarter report. Last year it reported on 4 December 2025.
Catalysts ahead
- 25 November 2026: Census Bureau October new residential sales report. Shows whether new-home sales hold near the September rate of 676,000.
- ~4 December 2026 (est.): Hovnanian fiscal fourth-quarter and full-year results. Shows whether backlog converted into the guided $800 million–$900 million of revenue at a 15.0%–16.5% adjusted gross margin.
What would change the view
A daily close above $110.55, the 4 November 2026 close and the highest of the last 20 sessions, which would show the shares leading again. Fiscal fourth-quarter revenue above the $900 million top of the guide would also show it.
What it trades with
Hovnanian trades with other US homebuilders and moves with the 30-year mortgage rate and the Federal Reserve's rate path. The nearest comparables are D.R. Horton and Lennar, which rose more than 4% in a session after a January 2026 order directing $200 billion of mortgage-bond purchases (Reuters via Stockopedia). Hovnanian carries more financial leverage than larger builders, so rate moves can show up more strongly in its shares.
The evidence, claim by claim (7)
- Hovnanian reported $881.9 million of consolidated domestic backlog at 31 July 2026, up 5.1% year over year. Hovnanian fiscal third-quarter 2026 results · as of
- Fiscal third-quarter 2026 revenue was $705.7 million and the net loss was $4.5 million. Hovnanian fiscal third-quarter 2026 results, 20 August 2026 · as of
- Hovnanian guided fiscal fourth-quarter revenue to $800 million–$900 million and adjusted homebuilding gross margin to 15.0%–16.5%. Hovnanian fiscal third-quarter 2026 results, 20 August 2026 · as of
- The Federal Reserve held its target range at 3.75%–4.00% on a 10–2 vote, with two governors dissenting in favour of a hike. RealEstateNews, 28 October 2026 · as of
- September new single-family home sales were a 676,000 annual rate; August was revised down to 680,000 from 684,000. U.S. Census Bureau new residential sales, as reported by investingLive and RealEstateNews · as of
- Freddie Mac's 30-year fixed rate averaged 7.24% in the week of 29 October 2026, down from 7.32% the week before. Freddie Mac survey as reported by Mortgage News Daily · as of
- The Chief Operating Officer, Chief Financial Officer and a director had shares withheld for tax at $104.92 on 2 November 2026. SEC Form 4 filings, 4 November 2026 · as of
Sources
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