Hovnanian Enterprises, Inc. — Earnings Quality Grade F
HOV · Consumer Cyclical
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 3 days, change -0 days YoY
AR growth -10.0% vs revenue growth -0.9%
Revenue -0.9%, CFFO 696.4%. Cash follows revenue
Expense Quality
Inventory -0.4% vs COGS 5.9%. Normal
CapEx growth 23.7% is >2x revenue growth -0.9%
SG&A/Gross Profit = 83.2%, exceeds 70%
Gross margin swung -5.5pp (19.6% → 14.1%)
Cash Flow Quality
CFFO/NI = 2.95. Profits backed by cash
FCF $0.2B, FCF/NI = 2.60
Accruals ratio = -4.7%. Low accruals
Cash $0.3B covers only 29% of debt $0.9B
Balance Sheet Health
No goodwill. Clean balance sheet
Debt/EBITDA = 6.9x (>4x). Interest coverage = 2.0x (<2x). Financial stress
Other assets -15.8% vs revenue -0.9%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions positive
No goodwill
Manipulation Score
M-Score = -2.64 (< -2.22). Unlikely manipulator
Portfolio monitoring
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Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25