Hovnanian Enterprises heads into its May 20 earnings report with short sellers rebuilding positions, the stock down sharply on the week, and the Street's only recent analyst call firmly bearish.
Short interest has jumped to its highest level in weeks. SI climbed to nearly 7% of the free float by April 28, up from around 6.1% at the start of the week — a 14.6% increase over the seven days. That reverses a dip into early April, when SI briefly fell to 5.1% of float during the tariff-shock selloff, and brings positioning back to levels last seen in mid-to-late March. The step-change on April 23 is notable: shorts added roughly 44,000 shares in a single session, lifting SI from 6.1% to 7.1% almost overnight.
Borrow conditions don't suggest any squeeze pressure. Cost to borrow has eased sharply — down 37% on the week to 0.64% — after briefly spiking above 1% in mid-April. Availability is wide, reflecting a lending pool that remains largely untapped at current utilization levels well below the 52-week high of 9.24%. The ORTEX short score has drifted higher to 42.4, up from 40.1 a week ago, but remains in moderate territory — short positioning is building, but it's not extreme.
The Street picture is unambiguously cautious. The only recent analyst action came on April 9, when Citizens initiated coverage with a Market Underperform and a $74 price target — against a current price of $111.46, that implies roughly 34% downside in the analyst's view. Wedbush had been the lone regular follower with a Neutral and a $120 target, last reiterated in August 2025, but that note is now stale. The bear case centers on a sequential decline in book value from FY25 to FY26, margin pressure that ran worse than expected through calendar year 2025, and a Q3 FY25 gross margin miss. The bull case points to price increases in around 20% of communities, particularly in the Mid-Atlantic and Northeast, and improving order comparisons. On valuation, the EV/EBITDA multiple is running at roughly 11.6x, while the P/E has risen sharply — up over 30 points on a 30-day basis — reflecting a stock that has held up better than earnings momentum would suggest.
Insider activity adds context. Director J. Larry Sorsby sold nearly 54,000 shares worth close to $6.6 million across late October and early November 2025 at prices around $120-122. CEO Ara Hovnanian sold a smaller parcel last August at $138. On the institutional side, American Century added almost 33,000 shares in Q1 2026 and State Street added 18,000 — modest accumulation against a backdrop of selling by the company's own leadership. The family founder still controls 13.8% of shares.
Peers reinforced the sector weakness this week. CCS fell 13.1% on the week — steeper than HOV's 8.6% decline. LEN and DHI dropped roughly 6% each. TMHC lost 6.7%. The one outlier was LGIH, which managed a 2.8% weekly gain, suggesting some dispersion within the sector.
The last two earnings prints offer a mixed read: HOV gained 2.8% the day after its February 2026 results but gave back 4.6% over the following five sessions. The prior print in February 2025 saw an immediate 5% decline followed by further weakness. With the May 20 date now three weeks out, the current setup — shorts rebuilding, the Street's one live call bearish, peers selling off — makes the run-up to results the period most worth watching.
See the live data behind this article on ORTEX.
Open HOV on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
