Hovnanian EnterprisesHOV +11.31%68 Operating Margin % is 2.17% as of Apr. 2026, which is 58% below its 10-year median of 5.17. GuruFocus rates HOV with a GF Score™ of 68/100 and a GF Value™ of $124.94 (Modestly Overvalued). The stock has 7 warning signs investors should review. Among 91 Homebuilding & Construction companies, Hovnanian Enterprises ranks worse than 83.52% on this metric.
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Hovnanian Enterprises Operating Margin % Related Terms
Hovnanian Enterprises Operating Margin % Historical Data
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The historical data trend for Hovnanian Enterprises's Operating Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
HOV vs BZH, LEGH, LGIH: Operating Margin % Comparison
For the Residential Construction subindustry, Hovnanian Enterprises's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Hovnanian Enterprises Operating Margin % vs Homebuilding & Construction Industry
For the Homebuilding & Construction industry and Consumer Cyclical sector, Hovnanian Enterprises's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Hovnanian Enterprises's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Hovnanian Enterprises's Operating Margin % for the fiscal year that ended in Oct. 2025 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Hovnanian Enterprises (HOV) has a Operating Margin % of 2.17% as of Apr. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Hovnanian Enterprises and its competitors. This is 58% below median its historical median of 5.17. Over the past decade, Hovnanian Enterprises' Operating Margin % has ranged from 1.55 to 11.88. According to the industry distribution chart, Hovnanian Enterprises ranks #76 out of 91 companies in the Homebuilding & Construction industry, placing it in the top 83.5%.
Is Hovnanian Enterprises' Operating Margin % too high?
Hovnanian Enterprises' current Operating Margin % of 2.17% is 58% below median its 10-year median of 5.17. Over the past 10 years, this metric has ranged from a low of 1.55 to a high of 11.88. The Homebuilding & Construction industry median Operating Margin % is 7.76. Hovnanian Enterprises' value of 2.17% is 72% below this industry median. Based on the distribution chart, Hovnanian Enterprises ranks #76 out of 91 companies in the Homebuilding & Construction industry, which is in the bottom quartile relative to peers. Overall, Hovnanian Enterprises has a GF Score™ of 68/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Hovnanian Enterprises' Operating Margin % compare to BZH and LEGH?
According to the Homebuilding & Construction industry distribution chart, Hovnanian Enterprises ranks #76 out of 91 companies for Operating Margin %. This places Hovnanian Enterprises in the lower half of its industry. The industry median Operating Margin % is 7.76. Hovnanian Enterprises' value of 2.17% is 72% below this benchmark. Historically, Hovnanian Enterprises' own Operating Margin % has ranged from 1.55 to 11.88 over the past decade. While the company's 10-year median is 5.17 vs. the industry median of 7.76, Hovnanian Enterprises has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for a Homebuilding & Construction company?
The median Operating Margin % among Homebuilding & Construction companies is 7.76, based on 91 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Hovnanian Enterprises's current Operating Margin % of 2.17% is 72% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Hovnanian Enterprises and its competitors. For the Homebuilding & Construction industry, the median Operating Margin % is 7.76 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Hovnanian Enterprises's current Operating Margin % is 2.17%, which is 58% below median its own 10-year median of 5.17. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Hovnanian Enterprises stock overvalued right now?
Based on GuruFocus' analysis, Hovnanian Enterprises (HOV) is currently considered Modestly Overvalued. The stock's GF Value™ is $124.94, compared to a current price of $141.91 — trading 13.6% above its estimated fair value. The current Operating Margin % is 2.17%, which is 58% below median its 10-year median of 5.17 and 72% below the Homebuilding & Construction industry median of 7.76. Hovnanian Enterprises' overall GF Score™ is 68/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Hovnanian Enterprises (HOV), the current Operating Margin % is 2.17% as of Apr. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Hovnanian Enterprises (HOV) Overvalued in 2026?
Based on GuruFocus' analysis, Hovnanian Enterprises stock appears to be overvalued.
The current stock price of $141.91 is trading 13.6% above its estimated GF Value™ of $124.94.
GuruFocus considers Hovnanian Enterprises to be Modestly Overvalued.
Key valuation signals for HOV:
Operating Margin %: 2.17% (58% below median its 10-year median of 5.17)
GF Value™: $124.94 vs. price of $141.91 (13.6% above fair value)
Industry Position: 72% below the Homebuilding & Construction median (#76 of 91)
No single metric tells the full story. See the HOV stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Hovnanian Enterprises Inc conducts all of its homebuilding and financial services operations. The company designs, constructs, markets, and sells single-family detached homes, attached townhomes and condominiums, urban infill, and active lifestyle homes in planned residential developments. It has two distinct operations: homebuilding and financial services. Its homebuilding operations are divided geographically into three segments: Northeast, which includes Delaware, Maryland, New Jersey, Ohio, Pennsylvania, Virginia, and West Virginia; Southeast, which includes Florida, Georgia, and South Carolina; and West, which includes Arizona, California, and Texas. The firm generates maximum revenue from the West Segment.
68GF Score
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