Vistry shares down 20%! Here’s what I’m doing…

Shares in FTSE 250 housebuilder Vistry (LSE:VTY) just crashed 20% this morning (4 March) after the firm’s annual results. I’m a shareholder, so what should I do?

The main issue seems to be margin contraction as the company cuts prices to shift volumes in a challenging market. But I think that misses the bigger picture when it comes to this company.

What’s the problem?

Vistry’s outlook for the first half of 2026 isn’t particularly positive. The company has excess inventory that it’s looking to shift via discounts and it’s focusing on bringing down its debt.

Neither of these is a particularly positive sign. While lower prices have generated some strong sales growth in the company’s open market division, they’re also likely to cut into profit margins. 

Vistry’s open market sales are less than 33% of the firm’s total revenues. But they account for a greater share of the profits and that’s why margin contraction is such a concern for the firm.

Reducing debt isn’t necessarily a bad thing, but a closer look at the results reveals it’s coming at the expense of share buybacks. And these could have been a significant return for shareholders.

Vistry spent around £130m on buybacks in 2025 and with the stock down, that’s 10% of the total market value. But investors will have to wait in 2026 as the focus shifts to strengthening the balance sheet.

That’s why the share price has crashed. But while neither of these is a welcome development, my reason for owning the stock remains firmly intact.

The bigger picture

Vistry’s partnership division is what sets it apart from other builders. It builds for housing associations, local authorities, and private landlords, who then buy the properties. 

This means the company can build more houses with less of its own money and has more predictable sales. And right now, there’s another huge advantage to this approach.

There’s £39bn in government funding for affordable homes between now and 2036. Vistry’s established relationships give it a huge advantage as a partner – and the competition knows it.

Nothing in the latest report changes this. And the company expects strong demand in the second half of the year in its partnership business as the bidding process gets going. 

A 20% drop takes the stock to a five-year low, but what I see as the main reason for owning Vistry shares is still firmly intact. So that means I have an opportunity.

I’m looking to add to my investment in a big way. I can see why the stock is down and there are challenges at the moment, but the company looks fundamentally undervalued to me at £1.3bn.

Who needs a stock market crash?

A stock market crash that sends share prices down can be a huge opportunity for investors. But Vistry’s latest move means I don’t think I need to wait around for one of those. 

The stock is 20% cheaper than it was yesterday and my long-term thesis is still intact. So it doesn’t really matter to me whether or not other shares are falling – I’m buying this one.

The post Vistry shares down 20%! Here’s what I’m doing… appeared first on The Motley Fool UK.

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Stephen Wright has positions in Vistry Group Plc. The Motley Fool UK has recommended Vistry Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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