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D.R. Horton (DHI) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

D.R. Horton (DHI) closed at $52.79 in the latest trading session, marking a -1.69% move from the prior day. This change lagged the S&P 500's 0.04% loss on the day. Meanwhile, the Dow lost 0.1%, and the Nasdaq, a tech-heavy index, added 0.05%.

Heading into today, shares of the homebuilder had lost 0.81% over the past month, lagging the Construction sector's loss of 0.14% and the S&P 500's gain of 2.48% in that time.

Wall Street will be looking for positivity from DHI as it approaches its next earnings report date. The company is expected to report EPS of $0.92, up 21.05% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.77 billion, up 7.73% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.89 per share and revenue of $18.79 billion, which would represent changes of +13.99% and +7.6%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for DHI. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.53% higher. DHI currently has a Zacks Rank of #2 (Buy).

In terms of valuation, DHI is currently trading at a Forward P/E ratio of 10.99. Its industry sports an average Forward P/E of 10.25, so we one might conclude that DHI is trading at a premium comparatively.

Meanwhile, DHI's PEG ratio is currently 0.94. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. DHI's industry had an average PEG ratio of 1.07 as of yesterday's close.

The Building Products - Home Builders industry is part of the Construction sector. This group has a Zacks Industry Rank of 51, putting it in the top 20% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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