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.
Momentum Indicator for DHI turns positive, indicating new upward trend
DHI saw its Momentum Indicator move above the 0 level on September 06, 2024. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 82 similar instances where the indicator turned positive. In of the 82 cases, the stock moved higher in the following days. The odds of a move higher are at .
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
a company which engages in construction and sale of single family homes
Industry Homebuilding