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Hovnanian Enterprises Inc. (HOV) Stock Dips Following Disclosure of Revised Guidance for Fiscal year 2021

Hovnanian Enterprises Inc. (HOV) stock prices were down by 14.39% shortly after market trading commenced on October 6th, 2021. This brought the price per share up to USD$82.50 early on in the trading day.


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HOV Stock Revises Guidance

October 5th, 2021 saw HOV stock announce revised guidance for the fourth quarter and full year ended October 31st 2021. In these reports, the company highlighted its susceptibility to the same supply chain delays that have affected its competitors as of late. These impacts have been become more pronounced in the month over the course of the time since the company’s last quarterly conference call. In light of these supply chain uncertainties and delays, the company is revising its guidance for the fourth quarter and full year. Despite these changes, the company expects year over year improvements in pretax profitability for the full year to be higher than 200%.

Higher Quarterly Guidance

The fourth quarter of fiscal 2021 will see HOV stock announce total revenues in the range of USD$780 million and USD$830 million, as per the company’s guidance. Adjusted pretax income is expected to be in the range of USD$45 million and USD$60 million, while adjusted EBITDA is expected to be between USD$85 million and USD$100 million.

Improved Yearly Guidance

The full fiscal year 2021 is expected to generate total revenues in between USD$2.75 billion and USD$2.80 billion by its end. Adjusted pretax income is expected to range from USD$160 million to USD$175 million. Adjusted EBITDA, meanwhile, is forecasted to come out to anywhere between USD$330 million and USD$345 million for the full fiscal year.

Favorable Market Conditions

Moving forward, HOV stock has token solace in the current comparatively more rational and healthy contract pace that the market has been exhibiting. This development has resulted in both higher home prices, as well as increased gross margins. Furthermore, market conditions have led to an increase in community count. This has the potential to lead to further growth in both total revenues and adjusted pretax income in fiscal 2022.

Future Outlook for HOV Stock

The company reported a stellar quarter, as evidenced by its strong financial reports for the most recent quarter. HOV stock is poised to capitalize on the expanded scope of opportunities at its disposal, reflected by the raising of full year guidance. Current and potential investors are hopeful that management will be able to effectively leverage the resources at their disposal. This is hoped to facilitate consistent and organic increases in shareholder value over the long term.

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