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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on DHI

D.R. Horton, Inc.'s recent performance was negatively impacted by declining revenue, profits, and backlog due to high interest rates and weak housing demand. The company's Q4 earnings miss and revenue decline year-over-year also contributed to the downturn. Furthermore, some Wall Street analysts lowered their expectations for the stock following the earnings report. Despite this, certain investors have increased their stakes, such as Boston Research & Management Inc., which lifted its stake by 6.0%. Additionally, the company has been noted to have a solid opportunity for call traders amid recent technical support.

1.c. Company Highlights

2. D.R. Horton's Q4 2025 Earnings: A Closer Look

D.R. Horton's fourth-quarter 2025 results showed consolidated pretax income of $1.2 billion on revenues of $9.7 billion, with a pretax profit margin of 12.4%. Net income for the quarter was $905.3 million or $3.04 per diluted share, slightly missing analyst estimates of $3.27. For the year, net income was $3.6 billion or $11.57 per diluted share on revenues of $34.3 billion. The company's homebuilding pretax return on inventory for the year was 20.1%, indicating a strong operational performance.

Publication Date: Oct -29

📋 Highlights
  • Strong Q4 2025 Performance:: Pretax income of $1.2B (12.4% margin) and net income of $905.3M ($3.04/share) on $9.7B revenue; annual net income rose to $3.6B ($11.57/share) with 20.1% homebuilding ROInv.
  • 2026 Guidance:: Projects $33.5B–$35B revenue and 86,000–88,000 home closings; anticipates $3B+ operating cash flow and 24.5% tax rate.
  • Capital Efficiency:: $4.3B in share repurchases YTD (30.7M shares) and 21% decline in inventory to 29,600 homes; 25% owned lots (592,000 total) with 75% controlled via contracts.
  • Margin Dynamics:: Q4 gross margin dropped 180bps to 20% due to warranty settlements; construction costs fell 1% YoY, offsetting 8% higher lot costs with cost reductions.

Operational Highlights

The company reported a 5% increase in net sales orders to 20,078 homes, with an order value of $7.3 billion, a 3% increase from the prior year quarter. The average price of net sales orders was $364,900, flat sequentially but down 3% from the prior year quarter. The company's gross profit margin on home sales revenues in the fourth quarter was 20%, down 180 basis points sequentially, partly due to a sequential step-up in warranty expense.

Guidance and Outlook

D.R. Horton provided guidance for fiscal 2026, expecting consolidated revenues of $33.5 billion to $35 billion and homes closed by its homebuilding operations to be in the range of 86,000 to 88,000 homes. The expected income tax rate for fiscal 2026 is approximately 24.5%, and the company plans to generate at least $3 billion of cash flow from operations. Analysts estimate next year's revenue growth at 2.0%, indicating a relatively stable outlook.

Valuation and Financial Health

With a P/E Ratio of 12.7 and an ROE of 14.62%, the company's valuation appears reasonable. The P/S Ratio stands at 1.34, and the EV/EBITDA ratio is 9.99, suggesting a relatively attractive valuation. The company's strong balance sheet, with low leverage and healthy liquidity, provides significant financial flexibility. The company's capital allocation strategy is disciplined and balanced, supporting an expanded operating platform that produces attractive returns and substantial operating cash flows.

Regional Performance and Market Outlook

The company reported strength in the Midwest and Mid-Atlantic regions but faced challenges in Florida and Texas. The company expects its sales pace to increase in the first half of its fiscal year in preparation for the spring selling season. With a focus on affordability and a mix of smaller homes, the average selling price is expected to trend down. The company's acquisition of SK Builders in South Carolina is expected to contribute to its positioning in the Greenville market.

3. NewsRoom

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D.R. Horton (DHI) Stock Declines While Market Improves: Some Information for Investors

Dec -04

Source:

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D.R. Horton, Inc. $DHI Stock Holdings Decreased by Arrowstreet Capital Limited Partnership

Dec -04

Source: defenseworld.net

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Here Are Tuesday’s Top Wall Street Analyst Research Calls: Albemarle, Circle Internet, Cloudflare, Danaher, Inspire Medical, Six Flags, Workday and More

Dec -02

Source: 247wallst.com

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D.R. Horton: A Deep Dive Into America's Largest Home Builder

Dec -02

Source: fool.com

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D.R. Horton, Inc. $DHI Shares Sold by Bayview Asset Management LLC

Dec -01

Source: defenseworld.net

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27,100 Shares in D.R. Horton, Inc. $DHI Bought by BLI Banque de Luxembourg Investments

Dec -01

Source: defenseworld.net

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D.R. Horton (DHI) Outperforms Broader Market: What You Need to Know

Nov -26

Source:

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These 3 Housing Stocks Are Laying the Foundation for a Comeback

Nov -25

Source: marketbeat.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.66%)

6. Segments

Homebuilding - Southeast

Expected Growth: 12.6%

- The Southeast region, comprising Florida, Georgia, Alabama, and South Carolina, is expected to drive growth, fueled by a strong economy, low unemployment, and increasing demand for housing, particularly in the affordable and first-time homebuyer segments.

Homebuilding - South Central

Expected Growth: 11.4%

Estimated CAGR, driven by increasing demand for affordable housing in Texas, Oklahoma, and Arkansas, coupled with a focus on quality and customer service, which is expected to drive sales and revenue growth in the single-family homes, townhomes, and condominiums segment.

Homebuilding - East

Expected Growth: 11.2%

- The eastern United States’ single-family homes, townhomes, and condominiums market is driven by growing demand from first-time and move-up buyers, supported by low interest rates, increasing employment rates, and a shortage of existing homes for sale.

Homebuilding - Southwest

Expected Growth: 12.6%

estimated CAGR, driven by increasing demand for single-family detached houses, growing popularity of golf course communities, and expanding presence in Nevada and Texas.

Homebuilding - North

Expected Growth: 7.5%

CAGR, driven by the segment’s diverse geographic presence in the northern United States, offering a range of floor plans and price points, catering to the growing demand for single-family homes in the Midwest, Northeast, and Pacific Northwest regions.

Homebuilding - Northwest

Expected Growth: 14.1%

- The Pacific Northwest segment is poised for growth, driven by robust demand from first-time and move-up buyers in markets such as Seattle, Portland, and Boise, where housing prices are relatively affordable compared to other West Coast markets.

Rental

Expected Growth: 13.5%

CAGR, driven by increasing demand for single-family home rentals, expansion of revenue streams, and provision of an attractive alternative to traditional multifamily rentals.

Forestar

Expected Growth: 12.1%

- Forestar’s growth is driven by increasing demand for residential and commercial properties, strategic lot supply solutions to leading builders and developers, and expansion into new markets, positioning the company as a leading national land developer and manager.

Financial Services

Expected Growth: 4.5%

The financial services segment, offering mortgage banking and title services, is expected to drive growth, driven by an increasing demand for housing, low interest rates, and an expanding product portfolio, facilitating the homebuying process and providing a range of financing options.

Eliminations and Other

Expected Growth: 9.4%

- This segment, comprising intercompany transaction eliminations, unconsolidated subsidiary activities, and miscellaneous corporate expenses, is driven by the company’s growing scale, increasing operational efficiency, and strategic investments in technology and process improvements.

7. Detailed Products

Single-Family Homes

D.R. Horton offers a wide range of single-family homes, from starter homes to luxury estates, designed to meet the needs of various lifestyles and budgets.

Townhomes

The company builds townhomes, which offer a low-maintenance lifestyle and shared community amenities, perfect for first-time buyers, empty nesters, and retirees.

Condominiums

D.R. Horton develops condominium communities, offering a carefree lifestyle with amenities like pools, fitness centers, and clubhouses.

Active Adult Communities

The company designs and builds active adult communities, catering to adults 55+, with amenities like clubhouses, fitness centers, and outdoor recreation areas.

Luxury Homes

D.R. Horton offers luxury homes with high-end finishes, custom designs, and premium amenities, catering to discerning buyers.

8. D.R. Horton, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes is moderate for D.R. Horton, Inc. as there are alternative options available for homebuyers, but the company's brand reputation and quality of homes help to mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low for D.R. Horton, Inc. as the company operates in a highly competitive market, but its strong brand reputation and quality of homes give it an advantage in negotiating prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for D.R. Horton, Inc. as the company relies on a few large suppliers for materials, but its large scale of operations gives it some negotiating power.

Threat Of New Entrants

The threat of new entrants is low for D.R. Horton, Inc. as the company has a strong brand reputation and a large market share, making it difficult for new entrants to gain traction.

Intensity Of Rivalry

The intensity of rivalry is high for D.R. Horton, Inc. as the company operates in a highly competitive market with many established players, leading to intense competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 30.98%
Debt Cost 3.99%
Equity Weight 69.02%
Equity Cost 12.29%
WACC 9.72%
Leverage 44.89%

11. Quality Control: D.R. Horton, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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PulteGroup

A-Score: 5.8/10

Value: 5.9

Growth: 8.8

Quality: 7.6

Yield: 2.0

Momentum: 4.0

Volatility: 6.3

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Toll Brothers

A-Score: 5.7/10

Value: 6.8

Growth: 8.1

Quality: 6.7

Yield: 2.0

Momentum: 4.0

Volatility: 6.3

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Lennar

A-Score: 5.4/10

Value: 7.5

Growth: 7.2

Quality: 7.1

Yield: 3.0

Momentum: 1.5

Volatility: 6.3

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D.R. Horton

A-Score: 5.4/10

Value: 5.9

Growth: 7.6

Quality: 6.6

Yield: 2.0

Momentum: 4.0

Volatility: 6.0

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NVR

A-Score: 5.0/10

Value: 4.5

Growth: 7.6

Quality: 7.5

Yield: 0.0

Momentum: 2.0

Volatility: 8.3

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KB Home

A-Score: 4.9/10

Value: 6.2

Growth: 7.1

Quality: 5.0

Yield: 3.0

Momentum: 2.5

Volatility: 5.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

158.62$

Current Price

158.62$

Potential

-0.00%

Expected Cash-Flows