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Abhoy Sarkar's Avatar
published in Blogs
Nov 10, 2022

D.R. Horton (DHI, $75.59) misses fiscal Q4 expectations, amidst rising rates' toll on demand

D.R. Horton missed both revenue and earnings expectations for fiscal fourth quarter, amidst a rising interest rate environment apparently dampening demand for homes.

The biggest home building company in the U.S. earned $4.67 a share in the quarter, compared to $5.07 a share expected by analysts.

Revenue rose just under +19% from the year-ago quarter to $9.64 billion, but fell short of the Street expectations of $9.87 billion. Homebuilding revenue came in at $9.4 billion, increasing from $7.6 billion in the year-ago quarter.

The company experienced a rise in cancellation rate to 32%, from 24% in Q3 and from 19% in the year-ago quarter. Net orders dropped to 13,582 homes (value of $5.4 billion), from 16,693 homes ($6.9 billion value) in Q3 and from 15,949 homes ( $6.0 billion value) in Q4 2021.

Related Ticker: DHI

Aroon Indicator for DHI shows an upward move is likely

DHI's Aroon Indicator triggered a bullish signal on May 24, 2023. Tickeron's A.I.dvisor detected that the AroonUp green line is above 70 while the AroonDown red line is below 30. When the up indicator moves above 70 and the down indicator remains below 30, it is a sign that the stock could be setting up for a bullish move. Traders may want to buy the stock or look to buy calls options. A.I.dvisor looked at 334 similar instances where the Aroon Indicator showed a similar pattern. In of the 334 cases, the stock moved higher in the days that followed. This puts the odds of a move higher at .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 56 cases where DHI's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where DHI advanced for three days, in of 316 cases, the price rose further within the following month. The odds of a continued upward trend are .

Bearish Trend Analysis

The 10-day RSI Indicator for DHI moved out of overbought territory on May 19, 2023. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 38 similar instances where the indicator moved out of overbought territory. In of the 38 cases, the stock moved lower in the following days. This puts the odds of a move lower at .

The Momentum Indicator moved below the 0 level on May 22, 2023. You may want to consider selling the stock, shorting the stock, or exploring put options on DHI as a result. In of 81 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .

The Moving Average Convergence Divergence Histogram (MACD) for DHI turned negative on May 19, 2023. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 49 similar instances when the indicator turned negative. In of the 49 cases the stock turned lower in the days that followed. This puts the odds of success at .

Following a 3-day decline, the stock is projected to fall further. Considering past instances where DHI declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

DHI broke above its upper Bollinger Band on May 16, 2023. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

Fundamental Analysis (Ratings)

Fear & Greed

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 65, placing this stock better than average.

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. DHI’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.845) is normal, around the industry mean (6.721). P/E Ratio (7.564) is within average values for comparable stocks, (120.694). Projected Growth (PEG Ratio) (1.066) is also within normal values, averaging (2.289). DHI has a moderately low Dividend Yield (0.009) as compared to the industry average of (0.049). P/S Ratio (1.160) is also within normal values, averaging (71.792).

Notable companies

The most notable companies in this group are DR Horton (NYSE:DHI), Lennar Corp (NYSE:LEN), Pultegroup (NYSE:PHM), KB Home (NYSE:KBH).

Industry description

Homebuilding includes companies residential home construction companies, renovators and repair firms. The companies may be building single-family or multifamily homes, condominiums or mobile homes. Over the five years to 2019, the Home Builders industry is estimated to have grown at an annualized rate of 2.5% to reach $89.4 billion, (including expected growth of 2.6% in 2019), according to a study by IbisWorld. After having suffered one of its worst crises a decade ago during the last macroeconomic recession–which had much of its origins in U.S. real estate – the homebuilding industry has been recovering steadily so far. Higher disposable incomes and improving economic activity have bolstered consumers’ purchases of homes. While revenue of the Home Builders industry remains well below its prerecession high, demand growth estimates show promise.

Market Cap

The average market capitalization across the Homebuilding Industry is 4.92B. The market cap for tickers in the group ranges from 100.01K to 38.21B. DHI holds the highest valuation in this group at 38.21B. The lowest valued company is ASCK at 100.01K.

High and low price notable news

The average weekly price growth across all stocks in the Homebuilding Industry was 3%. For the same Industry, the average monthly price growth was 5%, and the average quarterly price growth was 24%. STHI experienced the highest price growth at 38%, while BTDPF experienced the biggest fall at -6%.

Volume

The average weekly volume growth across all stocks in the Homebuilding Industry was -60%. For the same stocks of the Industry, the average monthly volume growth was -67% and the average quarterly volume growth was -49%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 38
P/E Growth Rating: 46
Price Growth Rating: 50
SMR Rating: 51
Profit Risk Rating: 65
Seasonality Score: 7 (-100 ... +100)
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Technical Analysis# Of IndicatorsAvg. Odds
   
   
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A.I.Advisor
published price charts
A.I. Advisor
published General Information

General Information

a company which engages in construction and sale of single family homes

Industry Homebuilding

Profile
Fundamentals
Details
Industry
Homebuilding
Address
1341 Horton Circle
Phone
+1 817 390-8200
Employees
13237
Web
https://www.drhorton.com
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DHI and

Correlation & Price change

A.I.dvisor indicates that over the last year, DHI has been closely correlated with LEN. These tickers have moved in lockstep 94% of the time. This A.I.-generated data suggests there is a high statistical probability that if DHI jumps, then LEN could also see price increases.

1D
1W
1M
1Q
6M
1Y
5Y
Ticker /
NAME
Correlation
To DHI
1D Price
Change %
DHI100%
+3.26%
LEN - DHI
94%
Closely correlated
+3.57%
PHM - DHI
92%
Closely correlated
+3.09%
TOL - DHI
90%
Closely correlated
+3.86%
KBH - DHI
88%
Closely correlated
+4.22%
MTH - DHI
87%
Closely correlated
+4.25%
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