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D.R. Horton Inc (DHI)
:DHI

DR Horton (DHI) AI Stock Analysis

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DR Horton

(NYSE:DHI)

Rating:81Outperform
Price Target:
$143.00
▲(8.42%Upside)
D.R. Horton's strong financial performance and attractive valuation are key strengths, supported by efficient operations and robust cash flow management. The neutral technical indicators and mixed earnings call, with both highlights and challenges, moderate the overall score.
Positive Factors
Financial management
D.R. Horton's net debt to cap stands at 10.4%, which is below its 4-year average, indicating effective management of cash balances and debt.
Long-term positioning
D.R. Horton is well-positioned to capitalize on long-term demands driven by favorable demographics and declining interest rates.
Negative Factors
Earnings performance
D.R. Horton reported earnings below expectations, with weaker deliveries and higher SG&A offsetting better gross margin.
Margin pressures
Higher incentives and SG&A pressure the margin outlook, with a decline in gross margin expected.
Market challenges
Spring selling season started slower than expected due to affordability challenges and weak consumer confidence.

DR Horton (DHI) vs. SPDR S&P 500 ETF (SPY)

DR Horton Business Overview & Revenue Model

Company DescriptionD.R. Horton, Inc. (DHI) is a leading homebuilding company in the United States, operating across several states. The company primarily focuses on constructing and selling residential homes, including single-family detached homes, townhomes, duplexes, and condominiums. Founded in 1978 and headquartered in Arlington, Texas, D.R. Horton is recognized for its commitment to quality, value, and customer service, which has helped it establish a strong presence in the homebuilding industry.
How the Company Makes MoneyD.R. Horton makes money primarily through the construction and sale of residential homes. The company's revenue model relies heavily on its core homebuilding operations, which involve acquiring land, developing home sites, and building homes to sell to consumers. Key revenue streams include the sale of completed homes, land sales, and the provision of mortgage financing services through its subsidiary, DHI Mortgage. Additionally, the company may form strategic partnerships with land developers and other real estate entities to enhance its market reach and operational efficiency. D.R. Horton's earnings are influenced by factors such as housing market conditions, economic trends, interest rates, and consumer demand.

DR Horton Key Performance Indicators (KPIs)

Any
Any
Homebuilding Inventories by Geography
Homebuilding Inventories by Geography
Tracks the inventory levels of homes in different regions, offering insights into supply-demand dynamics and potential sales opportunities or challenges.
Chart InsightsD.R. Horton's inventory levels have notably increased in the North and East regions, reflecting strategic geographic expansion and market penetration, as highlighted by a 10% year-over-year increase in active selling communities. Despite a 15% decrease in net sales orders, the company maintains strong financial performance and operational efficiencies, with improved cycle times and stable cancellation rates. The focus on cash flow and shareholder returns, including significant stock repurchases, underscores resilience amid market challenges such as affordability constraints and increased SG&A expenses.
Data provided by:Main Street Data

DR Horton Earnings Call Summary

Earnings Call Date:Apr 17, 2025
(Q2-2025)
|
% Change Since: 12.22%|
Next Earnings Date:Jul 22, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with strong financial performance, improved operational efficiencies, and stable cancellation rates as highlights. However, challenges such as decreased sales and order values, increased SG&A expenses, and lower gross profit margins were notable lowlights. The company's strategic focus on cash flow and shareholder returns indicates resilience in a challenging market environment.
Q2-2025 Updates
Positive Updates
Strong Financial Performance
D.R. Horton reported earnings of $2.58 per diluted share with a consolidated pre-tax income of $1.1 billion on $7.7 billion of revenues, marking a solid financial performance for the second quarter of fiscal 2025.
Improved Cycle Times
Construction cycle times improved by a few days from the first quarter and approximately three weeks from a year ago, allowing for faster inventory turnover and increased operational efficiency.
Strong Cash Flow and Shareholder Returns
The company returned all generated cash to shareholders through repurchases and dividends, and plans to repurchase approximately $4 billion of common stock in fiscal 2025, more than double the amount in fiscal 2024.
Stable Cancellation Rates
Cancellation rates remained at the low end of the historical range at 16%, indicating stable buyer commitment despite economic volatility.
Increased Community Count
The average number of active selling communities was up 5% sequentially and 10% year-over-year, indicating geographic expansion and market penetration.
Negative Updates
Decrease in Sales and Order Value
Net sales orders and homebuilding revenues decreased by 15%, with order value decreasing by 17% to $8.4 billion due to affordability constraints and declining consumer confidence.
Decline in Average Closing Price
The average closing price for the quarter was $372,500, down 1% both sequentially and year-over-year, reflecting pricing pressures in the market.
Increased SG&A Expenses
Homebuilding SG&A expenses increased by 4% from last year, with SG&A as a percentage of revenues rising by 170 basis points due to platform expansion.
Lower Gross Profit Margins
Gross profit margin on home sales revenue was 21.8%, down 90 basis points sequentially due to higher incentive costs.
Company Guidance
During the second quarter of fiscal 2025, D.R. Horton reported earnings of $2.58 per diluted share, with consolidated revenues of $7.7 billion and a pre-tax profit margin of 13.8%. The company focused on enhancing capital efficiency, achieving a homebuilding pre-tax return on inventory of 24.3%, a return on equity of 17.4%, and a return on assets of 12.2%. Despite a 15% decrease in net sales orders and homebuilding revenues, the company maintained a gross margin of 21.8% on home sales by strategically balancing pace and price, with cancellation rates at the lower end of historical trends. D.R. Horton anticipates consolidated revenues between $8.4 billion and $8.9 billion and homes closed in the range of 22,000 to 22,500 for the third quarter, while expecting annual revenues between $33.3 billion and $34.8 billion. The company continues to manage its inventory efficiently, with plans to repurchase about $4 billion of its common stock in fiscal 2025.

DR Horton Financial Statement Overview

Summary
D.R. Horton demonstrates strong profitability with efficient cost management, reflected in high gross and net profit margins. The balance sheet is solid with low leverage, and cash flow management is robust. However, a decline in revenue growth poses a challenge for maintaining momentum.
Income Statement
85
Very Positive
DR Horton demonstrates strong profitability with a TTM Gross Profit Margin of 42.03% and a Net Profit Margin of 12.16%, indicating efficient cost management. However, the Revenue Growth Rate shows a decline of 4.05% from the previous year, which may signal potential challenges in maintaining growth momentum. The EBIT Margin of 31.79% and EBITDA Margin of 12.63% suggest robust operational efficiency.
Balance Sheet
78
Positive
The company's balance sheet is solid with a Debt-to-Equity Ratio of 0.26, reflecting low leverage and financial stability. The Return on Equity stands at 17.26%, showcasing effective use of equity. However, the Equity Ratio of 69.65% highlights a conservative capital structure, which, while stable, may limit growth potential.
Cash Flow
82
Very Positive
DR Horton shows strong cash flow management with a Free Cash Flow to Net Income Ratio of 0.65, indicating substantial cash generation relative to net income. The Free Cash Flow Growth Rate is 37.13%, reflecting improved operational efficiency. The Operating Cash Flow to Net Income Ratio of 0.67 further supports the company's effective cash flow management.
BreakdownTTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income Statement
Total Revenue35.32B36.80B35.46B33.48B27.77B20.31B
Gross Profit9.01B9.54B9.35B10.50B7.88B4.94B
EBITDA5.55B6.37B6.19B7.65B5.40B2.91B
Net Income4.29B4.76B4.75B5.86B4.18B2.37B
Balance Sheet
Total Assets35.69B36.10B32.58B30.35B24.02B18.91B
Cash, Cash Equivalents and Short-Term Investments2.47B4.54B3.87B2.54B3.21B3.02B
Total Debt6.57B5.97B5.09B6.07B5.41B4.28B
Total Liabilities10.83B10.28B9.44B10.57B8.80B6.79B
Stockholders Equity24.33B25.31B22.70B19.40B14.89B11.84B
Cash Flow
Free Cash Flow2.74B2.02B4.16B413.60M267.00M1.13B
Operating Cash Flow2.87B2.19B4.30B561.80M534.40M1.42B
Investing Cash Flow-219.10M-190.60M-310.20M-414.90M-252.20M-166.10M
Financing Cash Flow-3.23B-1.36B-2.67B-811.20M-85.10M270.60M

DR Horton Technical Analysis

Technical Analysis Sentiment
Positive
Last Price131.90
Price Trends
50DMA
124.22
Positive
100DMA
125.50
Positive
200DMA
144.14
Negative
Market Momentum
MACD
2.65
Negative
RSI
59.46
Neutral
STOCH
81.88
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DHI, the sentiment is Positive. The current price of 131.9 is above the 20-day moving average (MA) of 126.40, above the 50-day MA of 124.22, and below the 200-day MA of 144.14, indicating a neutral trend. The MACD of 2.65 indicates Negative momentum. The RSI at 59.46 is Neutral, neither overbought nor oversold. The STOCH value of 81.88 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DHI.

DR Horton Risk Analysis

DR Horton disclosed 25 risk factors in its most recent earnings report. DR Horton reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

DR Horton Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
DHDHI
81
Outperform
$40.52B9.9817.83%1.21%-4.71%-10.19%
PHPHM
80
Outperform
$21.92B7.7125.52%0.80%8.86%13.60%
TOTOL
78
Outperform
$11.56B8.7418.09%0.85%1.59%-8.04%
78
Outperform
$6.37B7.3815.97%12.19%23.15%
NVNVR
76
Outperform
$22.29B15.6938.25%8.81%1.79%
LELEN
72
Outperform
$28.38B9.1013.04%1.82%-1.26%-17.78%
64
Neutral
kr11.54B16.5710.84%9.89%2.66%5.01%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
DHI
DR Horton
131.90
-3.33
-2.46%
LEN
Lennar
110.12
-24.84
-18.41%
NVR
NVR
7,623.24
169.18
2.27%
PHM
PulteGroup
109.36
4.90
4.69%
TOL
Toll Brothers
117.79
7.71
7.00%
TMHC
Taylor Morrison
63.45
9.62
17.87%

DR Horton Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
DR Horton Enters Material Definitive Agreement
Neutral
May 10, 2025

DR Horton has entered into a material definitive agreement, which has implications for its financial obligations. The details of this agreement are expected to impact the company’s operations and may influence its market positioning, although specific implications for stakeholders are not detailed.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 21, 2025