GET DAILY SIGNALSD.R. Horton (DHI) Posts Mixed Q4 Results With Revenue Beat but Softer Orders
Key Takeaways
- D.R. Horton reported fourth-quarter fiscal 2026 net income of $741.8 million, or $2.67 per diluted share, on consolidated revenues of $9.4 billion.
- Diluted earnings per share (EPS) came in below analysts' consensus estimates of about $3.00, while revenue modestly exceeded expectations.
- Net sales orders fell 7% year over year to 18,619 homes, and the cancellation rate climbed to 23% as higher mortgage rates pressured demand.
- The home sales gross margin declined to 19.5%, below management's expectations, reflecting higher incentives and costs.
- The board raised the quarterly dividend by 11% to $0.50 per share, marking the 13th consecutive year of dividend-per-share growth.
- For fiscal 2027, management guided to consolidated revenues of approximately $30 billion to $32 billion and 79,000 to 84,000 home closings.
Why These Results Stand Out
As the largest U.S. homebuilder by volume, DHI offers a clear window into housing market conditions. Its fiscal fourth quarter reflects activity from the peak spring and summer selling period, so the numbers provide useful clues about buyer demand and pricing trends heading into the new year. With mortgage rates remaining elevated, affordability challenges persist for the entry-level segment that DHI serves most. I find the combination of order trends, cancellation rates, and margin movement particularly telling for how the broader sector may perform.
Quarterly Performance Details
In the fourth quarter of fiscal 2026, DHI posted net income of $741.8 million, or $2.67 per diluted share, with consolidated revenues reaching $9.4 billion. EPS missed the consensus estimate near $3.00, though revenue came in slightly above the $9.1 billion expected. Home sales revenues totaled $8.4 billion from 22,915 closings at an average price of $365,600, essentially unchanged from a year earlier.
Net sales orders dropped 7% year over year to 18,619 homes, and their total value fell 9% to $6.6 billion. The cancellation rate increased to 23% from 20% in the prior-year quarter. Gross margin on home sales settled at 19.5%, which was below expectations due to higher incentives, elevated lot costs, and litigation expenses. For the full fiscal year, revenue reached $33 billion and net income was $2.9 billion, or $10.11 per diluted share. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
How the Market Responded
Shares of DHI moved modestly higher after the release. Investors appeared to balance the revenue outperformance and dividend increase against the EPS shortfall and tempered guidance. The reaction highlights a focus on solid cash generation and capital returns alongside the visible pressure on margins and order activity. Management reduced housing starts by 45% sequentially, a step that many viewed as a measured response to softer demand rather than a signal of deeper issues.
Guidance and What to Watch Next
Management’s initial fiscal 2027 outlook points to ongoing near-term challenges, with consolidated revenues expected between $30 billion and $32 billion and homebuilding closings in the 79,000 to 84,000 range. An income tax rate near 25.5% and operating cash flow of roughly $3.5 billion are also anticipated. For the first quarter ending December 31, the company sees revenues of $5.9 billion to $6.4 billion, closings of 15,500 to 16,500 homes, a gross margin of 18% to 18.5%, and a consolidated pre-tax profit margin of 7% to 8%.
Several items deserve close attention in coming quarters. The spring selling season will test whether incentives can be scaled back and margins stabilized. Trends in construction costs, especially lot expenses, and the balance between starts and orders will show how inventory is being managed. Share repurchases planned at around $3 billion for the year, together with the higher dividend, should continue to support returns even if revenue growth stays modest.
Using AI Tools in My Research
I often rely on Tickeron’s AI-powered tools when reviewing earnings reports like this one. The AI Screener helps me quickly compare DHI against peers on technical patterns, fundamentals, and volatility metrics, saving time while surfacing relevant trade ideas that align with a disciplined approach.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
DHI's Indicator enters downward trend
The Aroon Indicator for DHI entered a downward trend on October 21, 2026. Tickeron's A.I.dvisor identified a pattern where the AroonDown red line was above 70 while the AroonUp green line was below 30 for three straight days. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options. A.I.dvisor looked at 196 similar instances where the Aroon Indicator formed such a pattern. In 129 of the 196 cases the stock moved lower. This puts the odds of a downward move at 66%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 4 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
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 50 of 62 cases within the following month. The odds of a continued downward trend are 63%.
DHI broke above its upper Bollinger Band on October 22, 2026. 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.
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 15, 2026. You may want to consider a long position or call options on DHI as a result. In 55 of 85 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 65%.
The Moving Average Convergence Divergence (MACD) for DHI just turned positive on October 15, 2026. Looking at past instances where DHI's MACD turned positive, the stock continued to rise in 32 of 50 cases over the following month. The odds of a continued upward trend are 64%.
DHI moved above its 50-day moving average on October 22, 2026 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for DHI crossed bullishly above the 50-day moving average on October 27, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 10 of 13 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 77%.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 28 (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 Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is 52 (best 1 - 100 worst), indicating steady price growth. DHI’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 53 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 71, placing this stock slightly better than average.
The Tickeron SMR rating for this company is 62 (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 Valuation Rating of 77 (best 1 - 100 worst) indicates that the company is slightly overvalued 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 (1.679) is normal, around the industry mean (1.749). P/E Ratio (13.593) is within average values for comparable stocks, (9.135). Projected Growth (PEG Ratio) (1.171) is also within normal values, averaging (1.217). Dividend Yield (0.013) settles around the average of (0.019) among similar stocks. P/S Ratio (1.205) is also within normal values, averaging (24.205).
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General Information
a company which engages in construction and sale of single family homes
Industry Homebuilding
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