DCF Studio

    NVR · NYQ · Consumer Cyclical

    NVR, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 6180.34

    Market price

    USD 6265.10

    Implied upside

    -1.4%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedReported capital expenditure averages just 0.24% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.00% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.
    AdjustedCapital expenditure runs at 1.0% of revenue against depreciation of 0.2%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 6180.34-1.4%
    Exit multiple
    USD 5493.15-12.3%
    Market price
    USD 6265.10

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 8.9bnUSD 8.7bnUSD 8.7bnUSD 8.6bnUSD 8.6bnUSD 8.7bnUSD 8.8bnUSD 8.9bnUSD 9.1bnUSD 9.3bn+0.6%
    EBITUSD 1.7bnUSD 1.6bnUSD 1.6bnUSD 1.6bnUSD 1.6bnUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.7bnUSD 1.8bn+0.6%
    NOPATUSD 1.3bnUSD 1.3bnUSD 1.3bnUSD 1.3bnUSD 1.3bnUSD 1.3bnUSD 1.3bnUSD 1.3bnUSD 1.4bnUSD 1.4bn+0.6%
    Add depreciation & amortisationUSD 16.7mUSD 16.5mUSD 16.3mUSD 16.3mUSD 16.3mUSD 16.4mUSD 16.5mUSD 16.8mUSD 17.1mUSD 17.6m+0.6%
    Less capital expenditureUSD -88.6mUSD -91.8mUSD -95.5mUSD -99.5mUSD -104.0mUSD -109.0mUSD -114.6mUSD -120.9mUSD -128.0mUSD -136.0m+4.9%
    Capex, % of revenue1.0%1.1%1.1%1.2%1.2%1.3%1.3%1.4%1.4%1.5%-
    Less increase in working capitalUSD 220.8mUSD 17.7mUSD 11.2mUSD 4.9mUSD -1.3mUSD -7.4mUSD -13.7mUSD -20.1mUSD -26.8mUSD -33.8m-
    Free cashflow to firmUSD 1.5bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bn-1.9%
    Discount factor0.95930.88280.81240.74760.68800.63320.58270.53620.49350.4541-
    Present valueUSD 1.4bnUSD 1.1bnUSD 994.5mUSD 903.7mUSD 825.2mUSD 757.1mUSD 697.9mUSD 646.4mUSD 601.5mUSD 562.3m-
    Present Value Of The ForecastUSD 8.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.958Reported 0.937, pulled toward 1.0 (Blume)
    Cost of equity8.95%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 58.6x interest cover. Book interest / average debt was lower, at 2.8%.
    Market capitalisationUSD 16.8bn94.1% of capital
    Total debtUSD 1.1bn5.9% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC8.66%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 6180.34

    53% of EV

    Forecast FCFF, final year
    USD 1.2bn
    Capex at depreciation, working capital in reinvestment
    USD 1.4bn
    Less reinvestment at g/ROIC (8.5% of NOPAT)
    USD -118.4m
    Capitalised
    USD 1.3bn
    ROIC (reported)
    29.4%
    Terminal value, undiscounted
    USD 21.2bn
    Terminal value, discounted
    USD 9.6bn
    Enterprise value
    USD 18.1bn
    Less net debt
    USD -863.6m
    Equity value
    USD 19.0bn

    Exit at 9.3x EBITDA

    Value per shareUSD 5493.15

    47% of EV

    Terminal value, undiscounted
    USD 16.5bn
    Terminal value, discounted
    USD 7.5bn
    Enterprise value
    USD 16.0bn
    Less net debt
    USD -863.6m
    Equity value
    USD 16.9bn

    Spread between methods: 12%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.66%7905.368305.718806.969450.3810303.40
    7.66%6716.106953.337240.127592.408033.77
    8.66%5858.906006.236180.346388.316639.98
    9.66%5211.695305.775415.335543.845695.93
    10.66%4705.704766.554836.814918.315013.41

    Outlined: this model. Green text: above today's price of 6265.10. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-0.6%-1.0%-0.9%
    EBIT margin21.4%18.9%19.1%
    Discount rate-8.7%8.6%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.