DR Horton forming a base after post-earnings decline
Homebuilder DR Horton (NYSE: DHI) reported earnings on April 25. The company beat its EPS estimate as well as its revenue estimate, but the stock fell 4.76% that day as the company’s outlook disappointed investors. Now that the disappointment is starting to subside, the stock appears to be forming a base in the $44 area and looks as though it may be ready for another leg higher.
Looking at the daily chart we see that the stock has been trending higher since the end of December and there is a trend line that connects the lows from December, January, and March. The stock is still well above the trend line, but the stochastic readings have dipped down and are just above oversold territory and have now made a bullish crossover.
The Tickeron AI Trend Prediction tool generated a bullish signal on DR Horton on May 1 and the signal showed a confidence level of 66%. The signal calls for a gain of 2.5% in the next week and 75% of previous predictions on the stock have been successful.
The fundamentals for DR Horton are pretty strong. The company has seen earnings grow by an average of 27% per year over the last three years. During that same span, sales have grown by a rate of 14% per year.
The company has a return on equity of 18.8% and a profit margin of 12.8%.
One other factor that should benefit DR Horton is the fact that the Fed has stopped raising interest rates, at least for the time being. The housing industry is very interest rate sensitive so the slowdown in the hiking cycle should help the entire industry, including DR Horton.
DHI's MACD Histogram just turned positive
The Moving Average Convergence Divergence (MACD) for DHI turned positive on February 25, 2025. Looking at past instances where DHI's MACD turned positive, the stock continued to rise in of 52 cases over the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator is in the oversold zone. Keep an eye out for a move up in the foreseeable future.
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 .
The Aroon Indicator entered an Uptrend today. In of 298 cases where DHI Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on April 01, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on DHI as a result. In of 87 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
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 March 06, 2025. 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 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 64, placing this stock better than average.
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 (2.320) is normal, around the industry mean (7.196). P/E Ratio (11.663) is within average values for comparable stocks, (103.177). Projected Growth (PEG Ratio) (0.639) is also within normal values, averaging (1.437). DHI has a moderately low Dividend Yield (0.007) as compared to the industry average of (0.046). P/S Ratio (1.534) is also within normal values, averaging (88.859).
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 Seasonality Score of (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 (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 PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average 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.
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Fundamental Analysis Ratings
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General Information
a company which engages in construction and sale of single family homes
Industry Homebuilding