In the latest trading session, D.R. Horton (DHI) closed at $89.12, marking a -0.13% move from the previous day. This change lagged the S&P 500’s 0.36% gain on the day. Elsewhere, the Dow lost 0.26%, while the tech-heavy Nasdaq added 1.54%.
Heading into today, shares of the homebuilder had gained 13.28% over the past month, outpacing the Construction sector’s gain of 9.46% and the S&P 500’s gain of 4.14% in that time.
Investors will be hoping for strength from DHI as it approaches its next earnings release, which is expected to be April 22, 2021. On that day, DHI is projected to report earnings of $2.21 per share, which would represent year-over-year growth of 70%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.19 billion, up 37.47% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.16 per share and revenue of $26.13 billion. These totals would mark changes of +42.9% and +28.63%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for DHI. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
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. Over the past month, the Zacks Consensus EPS estimate has moved 0.63% higher. DHI is holding a Zacks Rank of #2 (Buy) right now.
Digging into valuation, DHI currently has a Forward P/E ratio of 9.75. This represents a premium compared to its industry’s average Forward P/E of 9.27.
Investors should also note that DHI has a PEG ratio of 0.73 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. Building Products – Home Builders stocks are, on average, holding a PEG ratio of 0.76 based on yesterday’s closing prices.
The Building Products – Home Builders industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 25, which puts it in the top 10% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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