DR Horton (DHI) AI Stock Analysis

• Market Cap: $47.17B
• Dividend Yield: 1.01%
• Average Volume (3M): 3.43M
• Price to Earnings (P/E): 12.7
• Beta (1Y): 0.75
• Revenue Growth: -7.31%
• EPS Growth: -16.37%
• Country: US
• Employees: 14,766
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Residential Construction
• EPS (TTM): 3.36
• Shares Outstanding: 298,123,540
• 10 Day Avg. Volume: 3,660,255
• 30 Day Avg. Volume: 3,428,210
• PEG Ratio: 3.61
• Price to Book (P/B): 2.48
• Price to Sales (P/S): 1.71
• P/FCF Ratio: 31.05
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: 1.29
• Enterprise Value/Gross Profit: 5.19
• Enterprise Value/Ebitda: 8.33
• 1Y Price Target: $173.83
• Price Target Upside: 10.05% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 71 Outperform
• Price Target: $175.00 ▲(10.79% Upside)

DR Horton's strong financial performance and stable valuation are the primary strengths, supporting a solid overall score. While technical analysis and earnings call sentiment present some challenges, the company's robust profitability and strategic management position it well in the residential construction industry.

Positive Factors

Strong Cash Flow

Strong cash flow generation indicates robust operational efficiency, providing the company with flexibility for reinvestment and shareholder returns.

Improved Construction Cycle Times

Faster construction cycle times enhance inventory turnover, allowing the company to meet demand more efficiently and potentially increase sales.

Community and Market Growth

Expansion in active communities and markets supports long-term revenue growth by increasing the company's reach and customer base.

Negative Factors

Decrease in Home Sales Revenue

A decline in home sales revenue indicates potential challenges in demand or pricing power, which could impact future profitability.

Rising SG&A Expenses

Increased SG&A expenses can pressure margins, reducing overall profitability unless offset by higher revenues or cost efficiencies.

Inventory and Land Cost Challenges

Inventory impairments and land cost write-offs suggest inefficiencies in asset management, potentially impacting future margins and cash flow.

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

D.R. Horton demonstrates strong profitability and financial stability, supported by healthy margins, a low debt-to-equity ratio, and solid cash flow growth. Despite a revenue decline, the company maintains effective cost management and cash flow generation, positioning it well in the residential construction industry.

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: 157.95
• 50DMA: Negative
• 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 157.95 is below the 20-day moving average (MA) of 160.54, below the 50-day MA of 166.57, and above the 200-day MA of 139.87, indicating a neutral trend. The MACD of -2.78 indicates Negative momentum. The RSI at 45.27 is Neutral, neither overbought nor oversold. The STOCH value of 73.34 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	76 Outperform	$13.18B	10.05	17.73%	0.71%	3.26%	-6.40%
DHI	71 Outperform	$47.17B	12.71	16.27%	1.01%	-7.31%	-16.37%
PHM	68 Neutral	$23.43B	9.31	21.57%	0.73%	1.76%	-4.24%
TMHC	68 Neutral	$6.19B	7.29	14.31%	―	6.98%	9.74%
LEN	64 Neutral	$32.15B	12.58	10.63%	1.57%	-4.69%	-32.95%
NVR	64 Neutral	$22.04B	16.31	34.80%	―	3.99%	-6.94%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

DR Horton Corporate Events

D.R. Horton Reports Q3 Earnings and Dividend

D.R. Horton, Inc., known as America’s Builder, is the largest homebuilder by volume in the United States, operating in the residential construction sector. The company is engaged in the construction and sale of high-quality homes and rental properties across 126 markets in 36 states.

D.R. Horton Inc’s Mixed Earnings Call Review

D.R. Horton Inc’s latest earnings call revealed a mixed sentiment, with notable achievements in earnings and shareholder returns being tempered by challenges such as decreased home sales revenue and increased sales incentives. The company demonstrated a strategically adaptive approach to market conditions through proactive management of its community count and investments.