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D.R. Horton (DHI) Gains But Lags Market: What You Should Know

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In the latest trading session, D.R. Horton (DHI) closed at $73.46, marking a +1.13% move from the previous day. This move lagged the S&P 500's daily gain of 1.92%. Elsewhere, the Dow gained 2.15%, while the tech-heavy Nasdaq added 0.16%.

Heading into today, shares of the homebuilder had gained 18.5% over the past month, outpacing the Construction sector's gain of 0.02% and the S&P 500's gain of 1.54% in that time.

Investors will be hoping for strength from D.R. Horton as it approaches its next earnings release, which is expected to be July 21, 2022. On that day, D.R. Horton is projected to report earnings of $4.50 per share, which would represent year-over-year growth of 47.06%. Our most recent consensus estimate is calling for quarterly revenue of $8.99 billion, up 23.35% from the year-ago period.

DHI's full-year Zacks Consensus Estimates are calling for earnings of $17.08 per share and revenue of $35 billion. These results would represent year-over-year changes of +49.69% and +26.03%, respectively.

Any recent changes to analyst estimates for D.R. Horton should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.34% lower. D.R. Horton is currently a Zacks Rank #5 (Strong Sell).

Investors should also note D.R. Horton's current valuation metrics, including its Forward P/E ratio of 4.25. Its industry sports an average Forward P/E of 3.55, so we one might conclude that D.R. Horton is trading at a premium comparatively.

Meanwhile, DHI's PEG ratio is currently 0.51. 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. Building Products - Home Builders stocks are, on average, holding a PEG ratio of 0.51 based on yesterday's closing prices.

The Building Products - Home Builders industry is part of the Construction sector. This group has a Zacks Industry Rank of 242, putting it in the bottom 4% 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.

To follow DHI in the coming trading sessions, be sure to utilize Zacks.com.


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