DR Horton (DHI) AI Stock Analysis

• Market Cap: $43.16B
• Dividend Yield: 1.04%
• Average Volume (3M): 3.20M
• Price to Earnings (P/E): 12.5
• Beta (1Y): 0.63
• Revenue Growth: -6.93%
• EPS Growth: -19.41%
• Country: US
• Employees: 14,766
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Residential Construction
• EPS (TTM): 3.04
• Shares Outstanding: 298,123,540
• 10 Day Avg. Volume: 3,245,292
• 30 Day Avg. Volume: 3,204,711
• PEG Ratio: -0.75
• Price to Book (P/B): 2.16
• Price to Sales (P/S): 1.53
• P/FCF Ratio: 15.28
• Enterprise Value/Market Cap: 1.25
• Enterprise Value/Revenue: 1.57
• Enterprise Value/Gross Profit: 6.64
• Enterprise Value/Ebitda: 11.13
• 1Y Price Target: $157.00
• Price Target Upside: 8.60% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 11
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: $157.00 ▲(8.60% Upside)

DR Horton's overall stock score is driven by solid financial health and a reasonable valuation. However, bearish technical indicators and mixed earnings call sentiment, with concerns over declining sales prices and high cancellation rates, suggest caution. The company's ability to navigate these challenges will be key to future performance.

Positive Factors

Strong Cash Flow and Shareholder Returns

Strong cash flow and significant shareholder returns indicate effective cash management and commitment to shareholder value, supporting long-term financial stability.

Community Growth

Growth in active selling communities suggests expanding market presence, which can drive future revenue growth and strengthen market position.

Increased Net Sales Orders

Rising net sales orders reflect strong demand and effective sales strategies, indicating potential for sustained revenue growth and market competitiveness.

Negative Factors

Decreasing Average Sales Price

Declining sales prices may pressure margins and profitability, potentially impacting revenue growth and financial performance if the trend continues.

High Cancellation Rate

A rising cancellation rate could indicate customer dissatisfaction or market volatility, affecting sales stability and revenue predictability.

Gross Margin Decline

Declining gross margins due to higher costs can reduce profitability, challenging the company's ability to maintain financial health if not addressed.

DR Horton Business Overview & Revenue Model

Company Description

D.R. Horton, Inc. operates as a homebuilding company in East, North, Southeast, South Central, Southwest, and Northwest regions in the United States. It engages in the acquisition and development of land; and construction and sale of residential homes in 31 states and 98 markets under the names of D.R. Horton, America's Builder, Express Homes, Emerald Homes, and Freedom Homes. The company constructs and sells single-family detached homes; and attached homes, such as town homes, duplexes, and triplexes. It also provides mortgage financing services; and title insurance policies, and examination and closing services, as well as engages in the residential lot development business. In addition, the company develops, constructs, owns, leases, and sells multi-family and single-family rental properties; owns non-residential real estate, including ranch land and improvements; and owns and operates energy related assets. It primarily serves homebuyers. D.R. Horton, Inc. was founded in 1978 and is headquartered in Arlington, Texas.

How the Company Makes Money

DR Horton primarily generates revenue through the sale of newly constructed homes. The company's revenue model is based on the sale of homes across its various brands, with each segment targeting specific customer demographics. Key revenue streams include the sale of homes, which represents the bulk of the company's earnings, and ancillary services such as mortgage financing and title insurance, which provide additional income. DR Horton also profits from land development activities, where it acquires and develops land for future home construction. Significant partnerships with suppliers and contractors contribute to cost management and operational efficiencies, further influencing profitability. The company's ability to adapt to market demands and maintain a robust inventory of homes is also crucial for sustaining its earnings.

DR Horton Financial Statement Overview

Summary

DR Horton demonstrates solid financial health with strong profitability and a robust balance sheet. However, the recent decline in revenue growth and slight decrease in profitability metrics in the TTM period suggest potential challenges ahead. The company’s ability to maintain cash flow efficiency will be crucial in sustaining its financial performance.

Income Statement

DR Horton shows strong profitability with a consistent gross profit margin around 24% to 26% over the years, although it has slightly decreased in the TTM period. The net profit margin remains healthy, albeit with a slight decline in the TTM. Revenue growth has been volatile, with a notable decline in the TTM, indicating potential challenges in maintaining growth momentum.

Balance Sheet

The company maintains a solid balance sheet with a low debt-to-equity ratio around 0.24, indicating prudent financial leverage. Return on equity is strong, although it has decreased from previous years, reflecting a slight dip in profitability. The equity ratio remains stable, showcasing a strong capital structure.

Cash Flow

Operating cash flow has shown improvement in the TTM, with a significant increase in free cash flow growth. However, the operating cash flow to net income ratio is less than ideal, suggesting potential inefficiencies in cash generation relative to earnings. The free cash flow to net income ratio is strong, indicating effective cash conversion.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	34.25B	34.25B	36.80B	35.46B	33.48B	27.77B
Gross Profit	8.12B	8.12B	9.54B	9.35B	10.50B	7.88B
EBITDA	4.84B	4.84B	6.37B	6.41B	7.71B	5.43B
Net Income	3.59B	3.59B	4.76B	4.75B	5.86B	4.18B
Balance Sheet
Total Assets	35.47B	35.47B	36.10B	32.58B	30.35B	24.02B
Cash, Cash Equivalents and Short-Term Investments	3.03B	3.03B	4.52B	3.87B	2.54B	3.21B
Total Debt	5.97B	5.97B	5.97B	5.14B	6.11B	5.45B
Total Liabilities	10.73B	10.73B	10.28B	9.44B	10.57B	8.80B
Stockholders Equity	24.19B	24.19B	25.31B	22.70B	19.40B	14.89B
Cash Flow
Free Cash Flow	3.30B	3.42B	2.02B	4.16B	413.60M	267.00M
Operating Cash Flow	3.42B	3.42B	2.19B	4.30B	561.80M	534.40M
Investing Cash Flow	-168.70M	-168.70M	-190.60M	-310.20M	-414.90M	-252.20M
Financing Cash Flow	-4.76B	-4.76B	-1.36B	-2.67B	-811.20M	-85.10M

DR Horton Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 144.57
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DHI, the sentiment is Negative. The current price of 144.57 is below the 20-day moving average (MA) of 151.77, below the 50-day MA of 162.40, and above the 200-day MA of 140.20, indicating a neutral trend. The MACD of -4.70 indicates Positive momentum. The RSI at 31.15 is Neutral, neither overbought nor oversold. The STOCH value of 14.38 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DHI.

DR Horton Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TOL	78 Outperform	$12.89B	9.83	17.73%	0.73%	3.26%	-6.40%
PHM	70 Outperform	$23.34B	9.22	21.57%	0.73%	1.76%	-4.24%
TMHC	70 Neutral	$5.80B	7.14	14.31%	―	6.98%	9.74%
DHI	66 Neutral	$43.16B	12.51	14.48%	1.04%	-6.93%	-19.41%
LEN	64 Neutral	$30.78B	12.01	10.63%	1.65%	-4.69%	-32.95%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
NVR	61 Neutral	$20.59B	15.91	34.80%	―	3.61%	-6.94%

DR Horton Corporate Events

D.R. Horton Reports Fiscal 2025 Earnings and Dividend Increase

D.R. Horton, Inc., known as America’s Builder, is the largest homebuilder by volume in the United States, specializing in the construction and sale of high-quality homes and rental properties. The company also offers mortgage financing, title services, and insurance agency services.

D.R. Horton Inc. Earnings Call: Mixed Sentiment and Strategic Outlook

The recent earnings call of D.R. Horton Inc. presented a mixed sentiment, reflecting both strong financial achievements and some challenges. The company reported impressive financial performance with record pretax income, robust cash flow, and increased net sales orders. However, concerns were raised regarding declining average sales prices, a high cancellation rate, and a decrease in gross margins, suggesting a steady yet cautious outlook for the future.