The New Home Company Inc. focuses on the design, construction, and sale of homes in California, including coastal Southern California, the San Francisco Bay area, and the metro Sacramento area. The company was founded in 2009 and is based in Aliso Viejo, California.
NWHM Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for New Home Co Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that New Home Co Inc ranked in the 98th percentile in terms of potential gain offered. Our DCF analysis implies the stock could yield a return of 19985.5% if fairly valued; such returns are always unlikely, though, so further investigation is likely warranted. In terms of the factors that were most noteworthy in this DCF analysis for NWHM, they are:
The compound growth rate in the free cash flow of New Home Co Inc over the past 3.03 years is 0.99%; that's higher than 95.89% of free cash flow generating stocks in the Consumer Cyclical sector.
17% of the company's capital comes from equity, which is greater than only 7.09% of stocks in our cash flow based forecasting set.
New Home Co Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -37.46. This coverage rate is greater than that of only 3.87% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
HMC, BWMX, NVFY, MSC, and CMLS can be thought of as valuation peers to NWHM, in the sense that they are in the Consumer Cyclical sector and have a similar price forecast based on DCF valuation.
The New Home Company (NYSE: NWHM) today announced that the Company will release its financial results for the second quarter of 2020 before the market opens on Thursday, July 30, 2020. The Company will also host a conference call for investors and other interested parties beginning at 7:00 AM Pacific Time (10:00 AM Eastern Time) on that same day to review the results, discuss recent events and conduct a question-and-answer period.
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