DR Horton (DHI) AI Stock Analysis

• Market Cap: $43.59B
• Dividend Yield: 1.03%
• Average Volume (3M): 4.41M
• Price to Earnings (P/E): 11.7
• Beta (1Y): 0.76
• Revenue Growth: -7.31%
• EPS Growth: -16.37%
• Country: US
• Employees: 14,766
• Sector: Consumer Cyclical
• Sector Strength: 64
• Industry: Residential Construction
• EPS (TTM): 3.36
• Shares Outstanding: 298,123,540
• 10 Day Avg. Volume: 5,740,719
• 30 Day Avg. Volume: 4,413,551
• PEG Ratio: -1.98
• Price to Book (P/B): 1.84
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.48
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 1.07
• Enterprise Value/Gross Profit: 20.94
• Enterprise Value/Ebitda: 9.51
• 1Y Price Target: $154.58
• Price Target Upside: 5.73% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 14

• Rating: 79 Outperform
• Price Target: $149.00 ▲(1.92%Upside)

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 Performance

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

Market Positioning

Demand was choppy, but D.R. Horton could be positioned to grow due to higher exposure to smaller markets and community count growth.

Revenue and Gross Margin Outlook

D.R. Horton's outlook for revenue and gross margin was better than expected, despite the challenging housing market.

Negative Factors

Margin Outlook

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

Rental Business Impact

DHI guided to year-over-year pre-tax margin compression driven by margin compression in the company’s rental business, given higher cap rates for single-family and multifamily rental sales.

Valuation Concerns

Valuation could limit upside potential from current levels, 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

D.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 Money

D.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 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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	36.80B	35.46B	33.48B	27.77B	20.31B
Gross Profit	9.54B	9.35B	10.50B	7.88B	4.94B
EBITDA	6.37B	6.19B	7.65B	5.40B	2.91B
Net Income	4.76B	4.75B	5.86B	4.18B	2.37B
Balance Sheet
Total Assets	36.10B	32.58B	30.35B	24.02B	18.91B
Cash, Cash Equivalents and Short-Term Investments	4.54B	3.87B	2.54B	3.21B	3.02B
Total Debt	5.97B	5.09B	6.07B	5.41B	4.28B
Total Liabilities	10.28B	9.44B	10.57B	8.80B	6.79B
Stockholders Equity	25.31B	22.70B	19.40B	14.89B	11.84B
Cash Flow
Free Cash Flow	2.02B	4.16B	413.60M	267.00M	1.13B
Operating Cash Flow	2.19B	4.30B	561.80M	534.40M	1.42B
Investing Cash Flow	-190.60M	-310.20M	-414.90M	-252.20M	-166.10M
Financing Cash Flow	-1.36B	-2.67B	-811.20M	-85.10M	270.60M

DR Horton Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 146.20
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• 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 146.2 is above the 20-day moving average (MA) of 136.88, above the 50-day MA of 128.46, and above the 200-day MA of 139.96, indicating a bullish trend. The MACD of 4.85 indicates Negative momentum. The RSI at 62.84 is Neutral, neither overbought nor oversold. The STOCH value of 64.98 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
DHI	79 Outperform	$43.59B	11.72	16.27%	1.03%	-7.31%	-16.37%
NVR	79 Outperform	$22.94B	16.56	38.10%	―	6.29%	-1.74%
PHM	78 Outperform	$23.05B	8.73	23.05%	0.74%	5.04%	2.07%
TOL	78 Outperform	$12.11B	9.15	18.09%	0.78%	1.59%	-8.04%
TMHC	74 Outperform	$6.00B	7.01	15.59%	―	13.77%	28.57%
LEN	73 Outperform	$29.94B	9.60	13.04%	1.71%	-1.26%	-17.78%
Sector *	63 Neutral	$17.26B	10.39	-8.50%	3.06%	1.63%	-25.95%

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.