Analyst Rafe Jadrosich from Bank of America Securities reiterated a Hold rating on Dream Finders Homes (DFH – Research Report) and keeping the price target at $28.00.
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Rafe Jadrosich has given his Hold rating due to a combination of factors affecting Dream Finders Homes. The company’s first-quarter earnings per share were in line with market expectations but fell short of Jadrosich’s forecast, which led to a reassessment of future earnings estimates. Despite the company’s asset-light model offering a competitive return on equity, its high net debt-to-capital ratio and premium trading price compared to peers present concerns.
Additionally, while Dream Finders Homes has shown growth in net orders and revenue, driven by acquisitions and increased inventory, the elevated selling, general, and administrative expenses are expected to persist as the company expands into new markets. This expansion includes the recent acquisition of Green River Builders, which adds complexity and potential risk. Overall, these mixed signals contribute to the Hold rating, as the potential for growth is balanced by financial and operational challenges.
Based on the recent corporate insider activity of 44 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DFH in relation to earlier this year.