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DHI vs TOL
Which Stock Would AI Choose? D.R. Horton (DHI) vs. Toll Brothers (TOL) Stock Comparison
1) Key Takeaways
- Different buyer bases: DHI leads the entry-level market, while TOL dominates luxury and move-up housing.
- Scale versus margin: DHI closes many more homes at thinner margins, whereas TOL delivers fewer homes at significantly higher prices and margins.
- Demand resilience: Both face affordability headwinds, but TOL's affluent, cash-heavy buyers have shown relatively steadier contract growth.
- Profitability pressure: Both reported year-over-year gross-margin compression in recent quarters as incentives and costs remained elevated.
- Capital returns: Each company continues aggressive share repurchases and dividends, supporting shareholder value.
- Relative valuation: Both trade at low forward price-to-earnings multiples relative to the broader market, reflecting a cautious housing outlook.
2) Introduction
Homebuilding stocks offer a direct lens into consumer confidence, mortgage-rate sensitivity, and housing affordability. This stock comparison examines two of America's most prominent builders: D.R. Horton, the nation's largest homebuilder by volume, and Toll Brothers, a leading luxury-home specialist. Although they operate in the same sector, their strategies and customer profiles differ sharply, which means their relative performance can diverge meaningfully through a housing cycle. Investors and traders evaluating market positioning in residential construction may find this comparison useful for understanding how scale-driven and premium-focused business models respond to the same macro environment.
2) DHI Overview and Recent Performance
D.R. Horton (DHI) is the largest homebuilder in the United States, headquartered in Arlington, Texas, with operations across dozens of markets. The company focuses heavily on affordable, entry-level homes through brands such as Express Homes, and it complements homebuilding with mortgage, title, rental, and lot-development businesses, including its majority stake in Forestar.
In recent quarters, DHI has emphasized affordability and inventory discipline. Its average closing price has declined modestly year over year as it shifted toward more attainable product, with first-time buyers representing a large share of mortgage closings. The company beat analyst estimates on earnings and revenue in its most recent report, supported by higher closing volumes, yet earnings per share (EPS) still declined year over year. Home sales gross margin compressed, and the cancellation rate rose, reflecting cautious buyer sentiment and elevated incentives. Management also trimmed full-year delivery and revenue guidance, signaling a measured sales pace rather than a rapid recovery.
3) TOL Overview and Recent Performance
Toll Brothers (TOL), headquartered in Fort Washington, Pennsylvania, is the country's leading luxury homebuilder. It designs, builds, and finances high-end detached and attached homes, with the luxury move-up segment—where average homes sell for well over $1 million—accounting for the majority of revenue. Toll Brothers has been expanding its community count and entered new markets, including a recent acquisition in Northwest Arkansas.
In recent months, Toll Brothers has reported results that exceeded guidance on deliveries, revenue, adjusted gross margin, and earnings, even as the broader housing market remained subdued. Net signed contracts rose year over year, driven by community growth, and roughly a quarter of buyers paid in cash, reducing exposure to mortgage-rate swings. Still, profitability moderated, with home sales gross margin and net income down from the prior year, and certain regional markets showed weakness. Management reaffirmed its full-year outlook while raising its share-repurchase target, reflecting confidence in its balance sheet and affluent customer base.
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5) Head-to-Head Comparison
The core contrast between these two builders is business model. DHI pursues volume and affordability, closing tens of thousands of homes annually at an average price near the low six figures. Toll Brothers prioritizes pricing power and margin, closing far fewer homes at premium price points. This difference drives their growth levers: DHI leans on scale, rapid construction cycles, and a flexible land strategy, while TOL relies on community-count expansion, design-studio upgrades, and a wealthier clientele.
On recent momentum, TOL has shown steadier order growth and stronger adjusted gross margins, while DHI has faced a higher cancellation rate and trimmed guidance. Conversely, DHI's scale and vertical integration provide diversification through financial services, rental, and lot development, whereas TOL is more concentrated in luxury housing. Risk profiles also differ: DHI is more sensitive to first-time-buyer affordability and mortgage rates, while TOL is more exposed to high-end wealth effects and regional luxury demand. Market sentiment currently assigns both stocks low multiples, reflecting a shared cyclical caution.
6) Tickeron AI Verdict
Based on observable factors, Tickeron's AI would likely lean toward Toll Brothers (TOL) at present. Its affluent, cash-heavy buyer base, steadier contract growth, higher and more resilient adjusted margins, and reaffirmed full-year guidance suggest more consistent near-term positioning. D.R. Horton (DHI) retains structural advantages in scale and diversification, but rising cancellations, margin compression, and lowered guidance point to a more uncertain demand backdrop. This assessment is probabilistic rather than definitive, and relative positioning could shift as mortgage rates and affordability trends evolve.
7) 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.
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is DHI is a Buy and TOL is a StrongBuy.
DHI in upward trend: price may ascend as a result of having broken its lower Bollinger Band on October 05, 2026
DHI may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In 21 of 28 cases where DHI's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are 75%.
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. 49 of 69 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 71%.
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 53 of 85 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 62%.
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 35 of 50 cases over the following month. The odds of a continued upward trend are 70%.
Following a +0.96% 3-day Advance, the price is estimated to grow further. Considering data from situations where DHI advanced for three days, in 197 of 301 cases, the price rose further within the following month. The odds of a continued upward trend are 65%.
Bearish Trend Analysis
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 62%.
The Aroon Indicator for DHI entered a downward trend on October 21, 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 30 (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 57 (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 59 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 75, 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 (1.632) is normal, around the industry mean (1.685). P/E Ratio (13.211) is within average values for comparable stocks, (7.941). 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).
Momentum Indicator for TOL turns positive, indicating new upward trend
TOL saw its Momentum Indicator move above the 0 level on October 21, 2026. 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 87 similar instances where the indicator turned positive. In 67 of the 87 cases, the stock moved higher in the following days. The odds of a move higher are at 77%.
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. 37 of 56 cases where TOL'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 66%.
The Moving Average Convergence Divergence (MACD) for TOL just turned positive on October 15, 2026. Looking at past instances where TOL's MACD turned positive, the stock continued to rise in 42 of 55 cases over the following month. The odds of a continued upward trend are 76%.
Following a +1.38% 3-day Advance, the price is estimated to grow further. Considering data from situations where TOL advanced for three days, in 225 of 319 cases, the price rose further within the following month. The odds of a continued upward trend are 71%.
TOL may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The 50-day moving average for TOL moved below the 200-day moving average on September 28, 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 TOL 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%.
The Aroon Indicator for TOL entered a downward trend on September 21, 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 29 (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 45 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 75, placing this stock slightly better than average.
The Tickeron Price Growth Rating for this company is 57 (best 1 - 100 worst), indicating steady price growth. TOL’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 58 (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 69 (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 (1.459) is normal, around the industry mean (1.685). P/E Ratio (10.804) is within average values for comparable stocks, (7.941). Projected Growth (PEG Ratio) (0.880) 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 (1.184) is also within normal values, averaging (24.205).
The Tickeron Seasonality Score of 85 (best 1 - 100 worst) indicates that the company is significantly overvalued 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.
DHI | TOL | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 69 | 80 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 77 Overvalued | 69 Overvalued | |
PROFIT vs RISK RATING 1..100 | 59 | 45 | |
SMR RATING 1..100 | 62 | 58 | |
PRICE GROWTH RATING 1..100 | 57 | 57 | |
P/E GROWTH RATING 1..100 | 30 | 29 | |
SEASONALITY SCORE 1..100 | 50 | 85 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
TOL's Valuation (69) in the Homebuilding industry is in the same range as DHI (77). This means that TOL’s stock grew similarly to DHI’s over the last 12 months.
TOL's Profit vs Risk Rating (45) in the Homebuilding industry is in the same range as DHI (59). This means that TOL’s stock grew similarly to DHI’s over the last 12 months.
TOL's SMR Rating (58) in the Homebuilding industry is in the same range as DHI (62). This means that TOL’s stock grew similarly to DHI’s over the last 12 months.
TOL's Price Growth Rating (57) in the Homebuilding industry is in the same range as DHI (57). This means that TOL’s stock grew similarly to DHI’s over the last 12 months.
TOL's P/E Growth Rating (29) in the Homebuilding industry is in the same range as DHI (30). This means that TOL’s stock grew similarly to DHI’s over the last 12 months.
| DHI | TOL | |
|---|---|---|
| RSI ODDS (%) | N/A | N/A |
| Stochastic ODDS (%) | 1 day ago 71% | 1 day ago 66% |
| Momentum ODDS (%) | 1 day ago 62% | 1 day ago 77% |
| MACD ODDS (%) | 1 day ago 70% | 1 day ago 76% |
| TrendWeek ODDS (%) | 1 day ago 69% | 1 day ago 72% |
| TrendMonth ODDS (%) | 1 day ago 67% | 1 day ago 64% |
| Advances ODDS (%) | 28 days ago 65% | 21 days ago 71% |
| Declines ODDS (%) | 4 days ago 62% | 4 days ago 59% |
| BollingerBands ODDS (%) | 1 day ago 75% | 1 day ago 67% |
| Aroon ODDS (%) | 1 day ago 62% | 1 day ago 68% |
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is overvalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
DHI’s FA Score shows that 1 FA rating(s) are green while TOL’s FA Score has 1 green FA rating(s).
- DHI’s FA Score: 1 green, 4 red.
- TOL’s FA Score: 1 green, 4 red.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
DHI’s TA Score shows that 5 TA indicator(s) are bullish while TOL’s TA Score has 5 bullish TA indicator(s).
- DHI’s TA Score: 5 bullish, 2 bearish.
- TOL’s TA Score: 5 bullish, 3 bearish.
Price Growth
DHI (@Homebuilding) experienced а +4.00% price change this week, while TOL (@Homebuilding) price change was +3.56% for the same time period.
The average weekly price growth across all stocks in the @Homebuilding industry was +3.61%. For the same industry, the average monthly price growth was -5.89%, and the average quarterly price growth was -4.33%.
Reported Earning Dates
DHI is expected to report earnings on Oct 29, 2026.
TOL is expected to report earnings on Dec 14, 2026.
Industries' Descriptions
@Homebuilding (+3.61% weekly)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.
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TOL and
Correlation & Price change
A.I.dvisor indicates that over the last year, TOL has been closely correlated with PHM. These tickers have moved in lockstep 89% of the time. This A.I.-generated data suggests there is a high statistical probability that if TOL jumps, then PHM could also see price increases.