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DR Horton (DHI)
NYSE:DHI
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DR Horton
(NYSE:DHI)
Select Model
Select Model
Rating:66Neutral
Price Target:
$157.00
▼(-1.70% Downside)
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 (DHI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$45.94B
Dividend Yield1.14%
Average Volume (3M)2.77M
Price to Earnings (P/E)13.6
Beta (1Y)0.62
Revenue Growth-6.93%
EPS Growth-19.41%
CountryUS
Employees14,766
SectorConsumer Cyclical
Sector Strength84
IndustryResidential Construction
Share Statistics
EPS (TTM)3.04
Shares Outstanding292,060,550
10 Day Avg. Volume2,408,496
30 Day Avg. Volume2,769,240
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 Cap1.17
Enterprise Value/Revenue1.58
Enterprise Value/Gross Profit6.65
Enterprise Value/Ebitda11.14
Forecast
1Y Price Target
$160.80Price Target Upside0.68% Upside
Rating ConsensusHold
Number of Analyst Covering12
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
DR Horton Business Overview & Revenue Model
Company DescriptionD.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 MoneyD.R. Horton generates revenue primarily through the sale of newly constructed homes, which constitutes the bulk of its earnings. The company builds and sells homes across various price segments, allowing it to tap into a broad customer base. In addition to home sales, D.R. Horton operates a financial services segment that provides mortgage financing and title services, contributing to its revenue through service fees and interest income. The company also benefits from strategic partnerships with land developers and suppliers, which help streamline operations and reduce costs. Economic factors such as interest rates, housing demand, and demographic trends significantly influence its earnings, making its revenue model sensitive to market conditions.
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 Earnings Call Summary
Earnings Call Date:Oct 28, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jan 20, 2026
Earnings Call Sentiment Neutral
The earnings call reflects a mix of positive and negative aspects. While the company reported strong financial performance with record pretax income, robust cash flow, and increased net sales orders, there are concerns regarding declining average sales prices, a high cancellation rate, and a decrease in gross margins. The balance between highlights and lowlights suggests a steady but cautious outlook.Q4-2025 Updates
Positive Updates
Record Pretax Income and Revenue
Consolidated pretax income of $1.2 billion on revenues of $9.7 billion for the fourth quarter. For the fiscal year, consolidated pretax income was $4.7 billion, with a pretax profit margin of 13.8%.
Strong Cash Flow and Shareholder Returns
Generated $3.4 billion of cash from operations, returning $4.8 billion to shareholders through repurchases and dividends. Over the past 5 years, $11 billion of operating cash flow was returned to shareholders.
Increased Net Sales Orders
Net sales orders in the fourth quarter increased 5% from the prior year to 20,078 homes, with order value increasing 3% to $7.3 billion.
Community Growth
Average number of active selling communities was up 1% sequentially and up 13% from the prior year.
Negative Updates
Decreasing Average Sales Price
Average closing sales price for the quarter was $365,600, down 1% sequentially and down 3% year-over-year.
High Cancellation Rate
Cancellation rate for the quarter was 20%, up from 17% sequentially.
Gross Margin Decline
Gross profit margin on home sales was 20%, down 180 basis points sequentially, driven by higher incentive costs and litigation expenses.
Inventory Reduction
Ended the year with 29,600 homes in inventory, down 21% from a year ago, with 19,600 unsold homes.
Company Guidance
During the fourth quarter of fiscal 2025, D.R. Horton reported consolidated pretax income of $1.2 billion on revenues of $9.7 billion, achieving a pretax profit margin of 12.4%. For the entire fiscal year, the company posted consolidated pretax income of $4.7 billion, with a pretax profit margin of 13.8%. The homebuilding pretax return on inventory reached 20.1%, while the return on equity was 14.6% and the return on assets stood at 10%. Notably, the company generated $3.4 billion in cash from operations, investing $8.5 billion in lots, land, and development. D.R. Horton returned $4.8 billion to shareholders through repurchases and dividends, and its fiscal year-end stockholders' equity totaled $24.2 billion. The company ended the year with $6.6 billion in consolidated liquidity and maintained a consolidated leverage of 19.8%. Looking ahead to fiscal 2026, D.R. Horton expects consolidated revenues between $33.5 billion and $35 billion, with homes closed ranging from 86,000 to 88,000. The company also plans to generate at least $3 billion in operating cash flow and repurchase approximately $2.5 billion of its common stock.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 | 2.99B | 2.99B | 4.52B | 3.87B | 2.54B | 3.21B |
| Total Debt | 6.03B | 6.03B | 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 | 3.28B | 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
Positive
159.71
Price Trends
148.91
Positive
157.10
Positive
143.78
Positive
Market Momentum
-0.08
Negative
63.03
Neutral
90.09
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 159.71 is above the 20-day moving average (MA) of 148.79, above the 50-day MA of 148.91, and above the 200-day MA of 143.78, indicating a bullish trend. The MACD of -0.08 indicates Negative momentum. The RSI at 63.03 is Neutral, neither overbought nor oversold. The STOCH value of 90.09 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 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 1 New Risks
1.
Changes in income tax and securities laws could adversely affect our business and financial results. Q3, 2025
DR Horton Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $13.81B | 10.77 | 16.89% | 0.70% | 1.11% | -10.03% | |
71 Outperform | $6.39B | 7.81 | 14.31% | ― | 6.98% | 9.74% | |
70 Outperform | $21.53B | 16.66 | 34.80% | ― | 3.61% | -6.94% | |
70 Outperform | $25.77B | 10.18 | 21.57% | 0.78% | 1.76% | -4.24% | |
66 Neutral | $45.94B | 13.60 | 14.48% | 1.14% | -6.93% | -19.41% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | $30.07B | 14.94 | 8.28% | 1.91% | -3.78% | -44.21% |
* Consumer Cyclical Sector Average
DHI
DR Horton
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19.37
13.69%
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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.