GET DAILY SIGNALSD.R. Horton (DHI), PulteGroup (PHM), and Toll Brothers (TOL): Weighing the Top U.S. Homebuilders
Key Takeaways
- DHI, PHM, and TOL are three of the largest U.S. homebuilders, but they serve different buyer segments: entry-level value, diversified mid-market, and luxury, respectively.
- All three have faced affordability-driven margin compression and elevated sales incentives in recent quarters, though their earnings power and balance sheets remain solid.
- PulteGroup (PHM) leads in capital efficiency, holding a net cash position and ranking first in total shareholder returns among homebuilders over the past year and decade.
- Toll Brothers (TOL) shows the most differentiated resilience, with an industry-low cancellation rate, affluent buyers, and a record revenue year.
- D.R. Horton (DHI) remains the volume leader but has absorbed the heaviest margin pressure and analyst downgrades in recent market activity.
- Tickeron AI Verdict: TOL (Toll Brothers) currently presents the most consistent trend, strongest relative positioning, and clearest growth catalysts among the three.
Introduction
DHI, PHM, and TOL rank among the most closely followed names in U.S. homebuilding, yet their models differ in meaningful ways. Placing these three side by side highlights how the housing market is navigating higher mortgage rates, affordability constraints, and changing buyer sentiment. The comparison helps investors understand relative performance across the entry-level, mid-market, and luxury segments. Below I review each company’s recent results and context, then compare them directly and note where an AI-driven view points at present. I also checked this using Tickeron’s AI Screener to see how the stocks compare to others in the industry.
D.R. Horton (DHI) at a Glance
DHI leads the industry by volume, with operations in 126 markets across 36 states and a focus on affordable, entry-level homes. Additional revenue comes from its Forestar lot development, rental, and financial services businesses. Recent results show the steepest margin compression among the three, driven by higher sales incentives and softer demand. In the latest fiscal fourth quarter, adjusted EPS fell about 22% year over year, and the stock dropped roughly 12% in October after an analyst downgrade and softer-than-expected earnings. Guidance points to continued elevated incentives and flat-to-modest revenue growth as management balances sales pace with pricing and margins. The company is returning meaningful capital through buybacks and a dividend recently increased by 13%.
PulteGroup (PHM) at a Glance
PHM operates from Atlanta with a diversified brand lineup that includes Centex, Pulte Homes, and Del Webb active-adult communities across more than 45 markets. This spread across first-time, move-up, and active-adult buyers has helped moderate the effects of softer demand in Texas and Western markets. In the most recent quarter, net new orders rose 4% year over year and average community count increased 6%, even as gross margins contracted and adjusted EPS declined from the prior period. The balance sheet stands out for its conservatism, ending the year in a net cash position with a debt-to-capital ratio of 11.2%. Plans include divesting off-site manufacturing to refocus on core homebuilding and targeting 3% to 5% annual community count growth.
Toll Brothers (TOL) at a Glance
TOL builds luxury homes for a more affluent customer base across more than 60 markets. This positioning has held up relatively well, as buyers are less affected by affordability pressures and rate swings. The company delivered a record 11,292 homes in its latest fiscal year at an average price of roughly $960,000, producing record home sales revenue of about $10.8 billion and an adjusted gross margin of 27.3%. The cancellation rate stayed low at around 4.3%, with roughly a quarter of buyers paying all cash. Guidance calls for 8% to 10% community count growth while shifting toward a more capital-efficient mix of optioned lots and exiting the Apartment Living business to concentrate on core luxury homebuilding.
Head-to-Head Comparison
The clearest difference among the three lies in their target customers and resulting sensitivity to affordability. DHI is tied to entry-level buyers, giving it the largest volume and market share but also the greatest exposure to incentive spending and margin pressure. PHM sits in the middle with broad geographic and buyer diversification plus the higher-margin Del Webb segment and the cleanest balance sheet. TOL operates at the premium end, trading some volume for pricing power and a much lower cancellation rate.
On growth, PHM and TOL are expanding community counts at 3% to 5% and 8% to 10%, respectively, while DHI focuses more on preserving returns and managing inventory. Risk profiles differ as well: DHI carries the most sensitivity to mortgage-rate changes and consumer confidence, whereas TOL’s affluent, often cash-paying buyers provide a buffer. Valuation also varies, with DHI trading at a discount due to compressed margins and TOL historically commanding a higher multiple for its premium positioning. Recent momentum favors PHM’s order growth and net cash position, yet TOL’s record revenue and stable order book offer the most consistent underlying trend.
Tickeron AI Verdict
Based on factors such as trend consistency, stability, catalysts, and relative positioning, Tickeron’s AI framework currently favors TOL (Toll Brothers). The company combines the most differentiated business model with an industry-low cancellation rate, record revenue, a resilient affluent customer base, and a clear near-term growth catalyst in its 8% to 10% community count expansion. While PHM offers the strongest capital efficiency and DHI the greatest scale, TOL’s relative stability and lower sensitivity to affordability pressures give it the most consistent risk-reward profile at present. This assessment is probabilistic and reflects current market conditions rather than a guaranteed outcome.
Exploring Tickeron’s AI Trading Bots
In my own analysis of names like these, I often review Tickeron’s Trending AI Robots to identify automated strategies suited to the current environment. The platform hosts hundreds of AI Trading Bots that trade thousands of tickers, each with its own style, timeframe, and performance history. Because housing and economic conditions shift quickly, only a subset aligns well with today’s market, and this section highlights those. Comparing bots by approach and track record provides a useful complement to single-signal views.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
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.
PHM's RSI Indicator climbs out of oversold territory
The RSI Oscillator for PHM moved out of oversold territory on October 15, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 16 similar instances when the indicator left oversold territory. In 14 of the 16 cases the stock moved higher. This puts the odds of a move higher at 88%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 21, 2026. You may want to consider a long position or call options on PHM as a result. In 69 of 92 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 75%.
The Moving Average Convergence Divergence (MACD) for PHM just turned positive on October 16, 2026. Looking at past instances where PHM's MACD turned positive, the stock continued to rise in 35 of 50 cases over the following month. The odds of a continued upward trend are 70%.
PHM moved above its 50-day moving average on October 23, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +4.20% 3-day Advance, the price is estimated to grow further. Considering data from situations where PHM advanced for three days, in 212 of 305 cases, the price rose further within the following month. The odds of a continued upward trend are 70%.
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 6 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The 50-day moving average for PHM moved below the 200-day moving average on October 07, 2026. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where PHM 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 59%.
PHM 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.
The Aroon Indicator for PHM entered a downward trend on October 23, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 14 (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 Profit vs. Risk Rating rating for this company is 30 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 68, placing this stock better than average.
The Tickeron Price Growth Rating for this company is 47 (best 1 - 100 worst), indicating steady price growth. PHM’s price grows at a higher rate over the last 12 months as compared to 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 SMR rating for this company is 57 (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 74 (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 (1.826) is normal, around the industry mean (1.826). P/E Ratio (12.651) is within average values for comparable stocks, (9.881). Projected Growth (PEG Ratio) (0.995) is also within normal values, averaging (1.217). Dividend Yield (0.008) settles around the average of (0.019) among similar stocks. P/S Ratio (1.393) is also within normal values, averaging (24.205).
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a company which engages in the homebuilding business
Industry Homebuilding
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