DR Horton (DHI) AI Stock Analysis

• Market Cap: $49.38B
• Dividend Yield: 0.97%
• Average Volume (3M): 4.62M
• Price to Earnings (P/E): 13.3
• Beta (1Y): 0.75
• Revenue Growth: -7.31%
• EPS Growth: -16.37%
• Country: US
• Employees: 14,766
• Sector: Consumer Cyclical
• Sector Strength: 73
• Industry: Residential Construction
• EPS (TTM): 3.36
• Shares Outstanding: 298,123,540
• 10 Day Avg. Volume: 3,695,458
• 30 Day Avg. Volume: 4,619,585
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.90
• Enterprise Value/Revenue: 1.29
• Enterprise Value/Gross Profit: 5.19
• Enterprise Value/Ebitda: 8.33
• 1Y Price Target: $155.43
• Price Target Upside: -5.89% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 16

• Rating: 79 Outperform
• Price Target: $149.00 ▼(-9.78% Downside)

D.R. Horton scores well due to strong financial performance and effective market strategies, despite headwinds in revenue and increased sales incentives. The stock shows positive technical momentum but is approaching overbought levels. Valuation is fair, providing a balanced investment opportunity.

Positive Factors

Earnings

D.R. Horton reported stronger deliveries and margins, driving better-than-expected earnings.

Market Performance

D.R. Horton's shares increased 17%, the largest increase in over 15 years, outperforming the S&P homebuilding index.

Negative Factors

Margin Outlook

Higher incentives and SG&A pressure the margin outlook, with a decline in gross margin expected.

Valuation

Valuation could limit upside potential, as the stock currently trades at a higher price-to-book ratio compared to the average builder.

DR Horton Business Overview & Revenue Model

Company Description

DR Horton, known by its ticker symbol DHI, is one of the largest homebuilding companies in the United States, specializing in the construction and sale of single-family homes. Founded in 1978 and headquartered in Arlington, Texas, the company operates primarily in the residential construction sector, with a presence in various markets across the country. DR Horton offers a diverse range of homes under several brands, catering to different segments of the market, including entry-level, move-up, and luxury homes. Additionally, the company engages in land development and provides mortgage financing and title services, enhancing its comprehensive approach to homebuilding.

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

D.R. Horton demonstrates strong profitability and financial stability with solid margins and cash flow growth, despite a revenue decline. The company maintains effective cost management and cash flow generation.

Income Statement

DR Horton shows strong profitability with a gross profit margin of 24.8% and a net profit margin of 11.5% for TTM. However, there's a revenue decline of 6.1% from the previous annual period, which tempers the positive margins. The EBIT margin is robust at 14.1%, and EBITDA margin stands at 15.2%, indicating efficient operations despite the revenue dip.

Balance Sheet

The debt-to-equity ratio of 0.30 suggests a solid capital structure with moderate leverage. Return on Equity (ROE) is strong at 16.5%, and the equity ratio is high at 66.1%, reflecting financial stability and a strong equity base.

Cash Flow

Free cash flow shows a substantial growth rate of 38.3% in TTM, indicating improved cash generation. The operating cash flow to net income ratio is 0.73, suggesting effective conversion of earnings into cash flow. The free cash flow to net income ratio is 0.71, underlining robust cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	34.58B	36.80B	35.46B	33.48B	27.77B	20.31B
Gross Profit	8.57B	9.54B	9.35B	10.50B	7.88B	4.94B
EBITDA	5.34B	6.37B	6.41B	7.71B	5.43B	3.06B
Net Income	3.96B	4.76B	4.75B	5.86B	4.18B	2.37B
Balance Sheet
Total Assets	36.40B	36.10B	32.58B	30.35B	24.02B	18.91B
Cash, Cash Equivalents and Short-Term Investments	2.61B	4.52B	3.87B	2.54B	3.21B	3.02B
Total Debt	7.30B	5.97B	5.14B	6.11B	5.45B	4.32B
Total Liabilities	11.80B	10.28B	9.44B	10.57B	8.80B	6.79B
Stockholders Equity	24.05B	25.31B	22.70B	19.40B	14.89B	11.84B
Cash Flow
Free Cash Flow	2.80B	2.02B	4.16B	413.60M	267.00M	1.13B
Operating Cash Flow	2.91B	2.19B	4.30B	561.80M	534.40M	1.42B
Investing Cash Flow	-153.00M	-190.60M	-310.20M	-414.90M	-252.20M	-166.10M
Financing Cash Flow	-3.11B	-1.36B	-2.67B	-811.20M	-85.10M	270.60M

DR Horton Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 165.16
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

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 165.16 is above the 20-day moving average (MA) of 153.15, above the 50-day MA of 138.55, and above the 200-day MA of 137.16, indicating a bullish trend. The MACD of 7.66 indicates Negative momentum. The RSI at 71.77 is Negative, neither overbought nor oversold. The STOCH value of 76.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DHI.

DR Horton Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TOL	80 Outperform	$12.81B	9.68	18.09%	0.73%	1.59%	-8.04%
DHI	79 Outperform	$49.38B	13.28	16.27%	0.97%	-7.31%	-16.37%
NVR	78 Outperform	$23.63B	17.38	38.10%	―	5.87%	-1.74%
TMHC	76 Outperform	$6.72B	7.86	15.59%	―	13.77%	28.57%
PHM	73 Outperform	$25.39B	9.62	23.05%	0.67%	5.04%	2.07%
LEN	71 Outperform	$33.97B	10.91	13.04%	1.51%	-1.26%	-17.78%
Sector *	61 Neutral	$17.43B	12.62	-6.02%	3.11%	1.71%	-15.47%

DR Horton Corporate Events

DR Horton Enters Material Definitive Agreement

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.