Hovnanian Enterprises (HOV) Stock Forecast & Price Target

Hovnanian Enterprises Inc has demonstrated a positive financial trajectory, illustrated by an increased pretax joint venture income estimate, now projected at $10 million, up from $7 million. The company showcased its pricing power by successfully raising prices in approximately 20% of its communities during the third fiscal quarter of 2025, particularly in the Mid-Atlantic and Northeast markets. Additionally, order comparisons have shown a notable improvement over the third fiscal quarter, with a year-over-year decline of only 4% in May, followed by modest growth of 1% in June and 7% in July, signaling a strengthening demand in the housing market.

Hovnanian Enterprises is projected to experience a sequential decline in book value from fiscal year 2025 to fiscal year 2026, primarily attributed to an increase in share count for FY26 compared to FY25. Additionally, the gross margin reported for the third quarter of FY25 was lower than expectations, and the outlook for the fourth quarter of FY25 remains similarly disappointing. Competitive pressures on gross margins in calendar year 2025 have intensified more than anticipated, indicating potential challenges in maintaining profitability moving forward.