DR Horton (DHI) Plunges More Than Broader Markets: What You Need To Know

D.R. Horton (DHI) closed the last day of trading at $85.40, moving -1.28% from the previous trading session. This change lagged the S&P 500’s 0.79% loss on the day. Meanwhile, the Dow lost 0.53% and the Nasdaq, a technology-heavy index, lost 0.46%.

Today, shares of the homebuilder were down 1.89% over the past month. At the same time, the construction sector lost 3.33%, while the S&P 500 lost 2.43%.

Investors are hoping for strength from DR Horton as its next earnings release nears. In this report, analysts expect DR Horton to post earnings of $3.38 per share. This would mark a 33.6% year-over-year growth. Our most recent consensus estimate calls for quarterly revenue of $7.61 billion, up 18.06% from the prior year period.

Zacks consensus estimates for the full year of DHI call for earnings of $15.80 per share and revenue of $35.05 billion. These results would represent year-over-year variations of +38.48% and +26.21%, respectively.

It is also important to note recent changes to analyst estimates for DR Horton. These revisions generally reflect the latest short-term trading trends, which may change frequently. Therefore, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Based on our research, we believe that these estimate revisions are directly related to the team’s close stock movements. Investors can take advantage of this by using the Zacks ranking. This model accounts for these estimation changes and provides a simple and actionable scoring system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive track record of outperformance verified by external audits, with #1 stocks generating an average annual return of +25% since 1988 Zacks Consensus’ EPS estimate rose 8.93% over the past month. DR Horton currently has a Zacks rank of #1 (strong buy).

As for its valuation, DR Horton holds a Forward P/E ratio of 5.47. For comparison, his industry has an average Forward P/E of 4.39, which means DR Horton is trading at a premium to the group.

We can also see that DHI currently has a PEG ratio of 0.52. This measure is used in the same way as the famous P/E ratio, but the PEG ratio also takes into account the growth rate of the stock’s expected earnings. Building Products – Home Builders stocks maintain an average PEG ratio of 0.52 based on yesterday’s closing prices.

The building products industry – home builders is part of the construction sector. This group has a Zacks industry ranking of 16, which places it in the top 7% of over 250 industries.

The Zacks Industry Ranking assesses the strength of our individual industry groups by measuring the average Zacks Ranking of individual stocks within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and more, at Zacks.com.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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