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DR Horton
(NYSE:DHI)
Select Model
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Rating:67Neutral
Price Target:
$156.00
▲(6.30% Upside)
Action:Reiterated
Date:07/22/26
The score is driven mainly by solid underlying financial strength (healthy profitability and conservative leverage) and a supportive valuation (13.52 P/E with a 1.22% yield). Offsetting these positives, technical indicators show a clear downtrend (price below all major moving averages, negative MACD, weak RSI), and the earnings call highlighted meaningful near-term demand pressure (higher cancellations and elevated incentives) despite strong margin execution and shareholder returns.
Positive Factors
High Profitability & Margin Execution
Consistently strong gross and pre-tax margins demonstrate durable execution and pricing power in homebuilding. Higher-than-guidance margins and TTM net margins (~9.5%) indicate core earnings resilience that can sustain profitability even if volumes moderate, supporting long‑term cash generation and returns.
Negative Factors
Rising Cancellation Rate
A 20% cancellation rate materially reduces expected closings and erodes near-term revenue and cash flow predictability. Persistently higher cancellations reflect buyer qualification and affordability stress that can suppress realized volumes and increase carrying, marketing and incentive costs over multiple quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
High Profitability & Margin Execution
Consistently strong gross and pre-tax margins demonstrate durable execution and pricing power in homebuilding. Higher-than-guidance margins and TTM net margins (~9.5%) indicate core earnings resilience that can sustain profitability even if volumes moderate, supporting long‑term cash generation and returns.
Read all positive factors
DR Horton Key Performance Indicators (KPIs)
Any
Income Before Taxes by Segment
Shows the profitability of each business segment before tax, highlighting which areas are driving earnings and which may need strategic adjustments.
Shows the profitability of each business segment before tax, highlighting which areas are driving earnings and which may need strategic adjustments.
Data provided by:
The Fly
The FlyDR Horton (DHI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$40.01B
Dividend Yield1.22%
Average Volume (3M)2.47M
Price to Earnings (P/E)13.6
Beta (1Y)0.61
Revenue Growth-3.54%
EPS Growth-15.86%
CountryUS
Employees14,341
SectorConsumer Cyclical
Sector Strength84
IndustryResidential Construction
Share Statistics
EPS (TTM)10.53
Shares Outstanding279,701,260
10 Day Avg. Volume2,998,110
30 Day Avg. Volume2,474,067
Financial Highlights & Ratios
PEG Ratio-0.75
Price to Book (P/B)2.16
Price to Sales (P/S)1.53
P/FCF Ratio15.92
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$164.09Price Target Upside11.81% Upside
Rating ConsensusHold
Number of Analyst Covering11
EPS Forecast (FY)10.48
Revenue Forecast (FY)$32.77B
DR Horton Business Overview & Revenue Model
Company Description
Established in Arlington, Texas, in 1978, D.R. Horton, Inc. operates as a prominent residential construction enterprise. The company's core business involves acquiring and preparing land, then constructing and marketing homes across a substantial ...
How the Company Makes Money
D.R. Horton primarily makes money by selling newly constructed homes to individual buyers. Revenue is recognized from homebuilding when homes are delivered/closed, and the company’s earnings in this core business are driven by (1) the number of ho...
DR Horton Earnings Call Summary
Earnings Call Date:Jul 21, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call conveyed operational strength—notably margin outperformance, strong cash generation, disciplined capital returns, and cost reductions—while also acknowledging demand softness, a higher cancellation rate, elevated incentives, rising SG&A from footprint expansion, and some lot-cost inflation. Management emphasized nimble, returns-focused operating decisions (trimming full-year deliveries, holding margin) and maintained robust liquidity and buyback/dividend plans. Overall, positive execution on profitability and capital allocation is tempered by near-term demand and cost pressures.Positive Updates
Strong Profitability and Margins
Consolidated pre-tax income of $1.2 billion on $9.2 billion of revenues, delivering a pre-tax profit margin of 13.3%. Home sales gross margin of 20.7%, above the high end of guidance.
Negative Updates
EPS and Revenue Pressure Year-over-Year
EPS declined to $3.20 from $3.36 in the prior-year quarter (down ~4.8%). Home sales revenue down ~3% year-over-year; average closing price down 2% YoY to $362,000.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Profitability and Margins
Consolidated pre-tax income of $1.2 billion on $9.2 billion of revenues, delivering a pre-tax profit margin of 13.3%. Home sales gross margin of 20.7%, above the high end of guidance.
Read all positive updates
Company Guidance
Management guided fourth-quarter consolidated revenues of $8.8–$9.3 billion, homebuilding closings of 22,500–23,000 homes, a home‑sales gross margin of 20.5%–21.0% and a consolidated pre‑tax profit margin of 12.3%–12.8%; for full‑year fiscal 2026 they now expect consolidated revenues of about $32.5–$33.0 billion, 83,800–84,300 homes closed, an income tax rate of ~25%, at least $3.0 billion of operating cash flow, roughly $2.5 billion of share repurchases and about $500 million of dividends; they also said Q4 starts will be lower than Q3, rental inventory should remain around $3.0 billion, and noted June 30 liquidity of $6.1 billion (including $2.1 billion cash and $4.0 billion available credit), total debt of $7.1 billion and consolidated leverage of 23% (long‑term target ~20%).DR Horton Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
78
Positive
Cash Flow
67
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 33.35B | 34.25B | 36.80B | 35.46B | 33.48B | 27.77B |
| Gross Profit | 7.54B | 8.12B | 9.54B | 9.35B | 10.50B | 7.88B |
| EBITDA | 4.11B | 4.84B | 6.37B | 6.41B | 7.71B | 5.43B |
| Net Income | 3.05B | 3.59B | 4.76B | 4.75B | 5.86B | 4.18B |
Balance Sheet | ||||||
| Total Assets | 36.51B | 35.47B | 36.10B | 32.58B | 30.35B | 24.02B |
| Cash, Cash Equivalents and Short-Term Investments | 2.08B | 2.99B | 4.52B | 3.87B | 2.54B | 3.21B |
| Total Debt | 7.18B | 6.03B | 5.97B | 5.14B | 6.11B | 5.45B |
| Total Liabilities | 12.10B | 10.73B | 10.28B | 9.44B | 10.57B | 8.80B |
| Stockholders Equity | 23.82B | 24.19B | 25.31B | 22.70B | 19.40B | 14.89B |
Cash Flow | ||||||
| Free Cash Flow | 3.31B | 3.28B | 2.02B | 4.16B | 413.60M | 267.00M |
| Operating Cash Flow | 3.35B | 3.42B | 2.19B | 4.30B | 561.80M | 534.40M |
| Investing Cash Flow | -258.70M | -168.70M | -190.60M | -310.20M | -414.90M | -252.20M |
| Financing Cash Flow | -3.62B | -4.76B | -1.36B | -2.67B | -811.20M | -85.10M |
DR Horton Risk Analysis
DR Horton disclosed 26 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $6.67B | 10.64 | 10.85% | ― | -8.99% | -22.26% | |
74 Outperform | $23.71B | 12.87 | 14.73% | 0.78% | -7.28% | -26.86% | |
74 Outperform | $13.64B | 10.95 | 15.49% | 0.68% | 3.62% | -2.11% | |
72 Outperform | $16.59B | 15.13 | 31.02% | ― | -9.30% | -19.36% | |
69 Neutral | $19.79B | 12.89 | 7.36% | 2.36% | -7.47% | -47.15% | |
67 Neutral | $40.01B | 13.59 | 12.77% | 1.19% | -3.54% | -15.86% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
DHI
DR Horton
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DR Horton Corporate Events
Private Placements and FinancingRegulatory Filings and Compliance
D.R. Horton Establishes New Direct Financial Obligation
Neutral
May 12, 2026
D.R. Horton disclosed that information previously provided under an item relating to entry into a material definitive agreement is being incorporated by reference into another item concerning the creation of a direct financial obligation or simila...
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.