NVR, Inc.NVRNYSE

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $9,846.90 per share(market-calibrated)

+34.0%

Upside to Fair Value

Current

$7,347.96

Pure Model

$10,063.17

Fair Value

$9,846.90

Bull Case

$11,626.57

Bear Case

$8,523.77

Market Reality Check

Model Terminal Growth

3.00%

Market-Implied Growth

0.88%

Calibrated Growth

2.47%

Fair value uses 75% model / 25% market-implied terminal growth. Pure model: $10,063.17.

What's Driving This Ratingfor NVR

✓

CapEx already efficient

CapEx at 0.22% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

→

Moderate revenue growth

Analyst consensus projects -6.32% revenue growth, fading to 3.00% by Year 10. Revenue reaches $12.8B (vs $10.3B today).

🎯

Market pricing in lower growth than model

The market implies only 0.88% perpetual growth — 212bps below the model's 3.00%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 72.67% indicates efficient cash generation. FCF reaches $1.8B by Year 10 (14.42% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.03

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)9.16%

Cost of Debt

Pre-tax Cost of Debt2.96%

Tax Rate23.96%

After-tax Cost of Debt2.25%

Equity Weight (E/V)94.68%

Debt Weight (D/V)5.32%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (94.68% × 9.16%) + (5.32% × 2.25%)

= 8.79%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$9.7B	$10.4B	$11.0B	$11.7B	$12.8B
EBIT	$1.9B	$2.0B	$2.2B	$2.3B	$2.5B
Tax	$455M	$490M	$520M	$551M	$603M
NOPAT	$1.4B	$1.6B	$1.6B	$1.8B	$1.9B
+ Depreciation	$18M	$19M	$21M	$22M	$24M
- Capex	$22M	$23M	$25M	$26M	$28M
- Δ NWC	-$110M	$14M	$54M	$58M	$63M
Free Cash Flow	$1.6B	$1.5B	$1.6B	$1.7B	$1.8B
Discount Factor	0.919	0.777	0.656	0.554	0.431
Present Value	$1.4B	$1.2B	$1.0B	$936M	$795M

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$1.8B

Terminal Growth Rate3.00%

WACC8.79%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$32.8B

PV of Terminal Value$14.1B

Exit Multiple Method

Year 10 EBITDA$2.5B

Exit Multiple (EV/EBITDA)20.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$50.8B

PV of Terminal Value$21.9B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$10.4B

PV of Terminal Value$14.1B

Enterprise Value$24.6B

(-) Net Debt-$760M

Equity Value$25.3B

Shares Outstanding3M

Price per Share$8,729.80

Exit Multiple Method

PV of Projected FCFs$10.4B

PV of Terminal Value$21.9B

Enterprise Value$32.3B

(-) Net Debt-$760M

Equity Value$33.0B

Shares Outstanding3M

Price per Share$11,396.54

Pure Model Fair Value

$10,063.17

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.00%	2.50%	3.00%	3.50%	4.00%
6.79%	$12,261.97	$12,690.49	$13,232.07	$13,938.26	$14,897.54
7.79%	$10,808.99	$11,073.35	$11,392.91	$11,786.95	$12,284.96
8.79%	$9,684.09	$9,858.56	$10,063.17	$10,306.46	$10,600.53
9.79%	$8,773.78	$8,894.62	$9,033.26	$9,193.94	$9,382.38
10.79%	$8,014.59	$8,101.39	$8,199.33	$8,310.71	$8,438.48

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$8,523.77

16.0% vs current

• -25% vs analyst consensus
• Terminal growth: 2.5%
• Beta: 1.29

Base Case

$10,063.17

37.0% vs current

• Analyst consensus
• Terminal growth: 3.0%
• Beta: 1.03

Bull Case

$11,626.57

58.2% vs current

• +25% vs analyst consensus
• Terminal growth: 3.5%
• Beta: 0.88

Key Assumptions & Drivers• Consumer Cyclical Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth-6.32%

Year 3 Revenue Growth0.83%

Year 5 Revenue Growth3.00%

Year 7 Revenue Growth3.00%

Year 10 Revenue Growth3.00%

Terminal Growth Rate3.00%

Margin & Efficiency

Current EBIT Margin19.65%

Tax Rate23.96%

Historical Capex / Rev0.22%

NWC / Revenue16.87%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 20x EV/EBITDA (Consumer Cyclical sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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