MeritValue

HOVNANIAN ENTERPRISES INC

HOVdata completeness 88%17 fiscal years on file
The thesis, from the filings

HOVNANIAN ENTERPRISES INC earns about 18% on invested capital, comfortably above its ~9% cost of capital, but has diluted owners by 8% over 5 years — a real edge showing up in the numbers. The estimate methods put fair value between $187.88 and $339.04 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$2.78B1$2.92B2$2.76B3$3B3$2.98B3
Net income$607.8M4$225.5M5$205.9M6$242M6$63.9M6
Operating cash flow$210.2M7$89.5M8$435.3M9$23.6M9$188.3M9
Capital expenditure$5.94M10$12.6M11$18.8M12$17.9M12$22.1M12
Free cash flow (derived)$204.3M7$76.9M8$416.5M9$5.78M9$166.2M9
Total debt$1.25B13$1.15B14$1.05B15$896.2M16$900.7M16
Cash & equivalents—————
Diluted shares6.4M6.7M6.7M7.0M6.9M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$1,205.65
your share of equity
Profit it earned you last year
$92.67
Free cash flow it threw off
$241.12
Debt you’d be carrying
$1,306.9

10 shares is a claim on $1,205.65 of net worth that earned you $92.67 and generated $241.12 of cash last year, against $1,306.9 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
18% avg · 5y
FY21 25%FY22 21%FY23 19%FY24 20%FY25 4%

It earned about 18% on invested capital against a ~9% cost of capital — comfortably above the cost of funding, a moderate advantage.

seeing a moat in the numbers →
Management signal · capital allocation
+8% shares · 5y

Share count is up 8% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has fallen 28% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $187.88 and $339.04 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$187.88
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$166.2M
DCF · Growth Exit 5Y
$213.82
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$166.2M
Earnings Power Value
$339.04
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$225.5M
  • growthAssumed0.0%
Graham Number
$141.97
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years0.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $213.82
The three cases
Bear0.0%$213.82
Base0.0%$213.82
Bull5.0%$297.21

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 0.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-10-31 · accession 0001437749-23-034783 (Revenues)
  2. 10-K · period ending 2022-10-31 · accession 0001753926-24-002117 (Revenues)
  3. 10-K · period ending 2023-10-31 · accession 0001753926-25-001938 (Revenues)
  4. 10-K · period ending 2021-10-31 · accession 0001437749-23-034783 (ProfitLoss)
  5. 10-K · period ending 2022-10-31 · accession 0001753926-24-002117 (ProfitLoss)
  6. 10-K · period ending 2023-10-31 · accession 0001753926-25-001938 (ProfitLoss)
  7. 10-K · period ending 2021-10-31 · accession 0001437749-23-034783 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-10-31 · accession 0001753926-24-002117 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-10-31 · accession 0001753926-25-001938 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-10-31 · accession 0001437749-23-034783 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-10-31 · accession 0001753926-24-002117 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-10-31 · accession 0001753926-25-001938 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-10-31 · accession 0001437749-22-029364 (LongTermDebt)
  14. 10-K · period ending 2022-10-31 · accession 0001437749-23-034783 (LongTermDebt)
  15. 10-K · period ending 2023-10-31 · accession 0001753926-24-002117 (LongTermDebt)
  16. 10-K · period ending 2024-10-31 · accession 0001753926-25-001938 (LongTermDebt)