Company Reports

D.R. Horton is the largest US homebuilder, with an extensive geographic footprint, ample land supply, and wide product breadth. The homebuilder serves a diverse range of homebuyers, including entry-level, move-up, higher-end, and active adult. Recognizing the growth opportunity from price-conscious first-time buyers, D.R. Horton launched Express Homes, its entry-level product, in 2014. D.R. Horton's focus on affordable price points has paid off, in our view, and homes priced at or below $350,000 now account for over 50% of delivered homes.

D.R. Horton posted decent fiscal third-quarter results but gave a mixed outlook. The 30-year fixed-rate mortgage reached 6.05% in February, but inflation concerns have reignited downside risks for the housing industry, as mortgage rates have risen to about 6.5% since then.

US homebuilders operate in a highly cyclical, competitive, and capital-intensive industry that makes it challenging to earn consistent economic profits over the business cycle. The market has been consolidating but remains highly fragmented with intense competition.

D.R. Horton is the largest US homebuilder, with an extensive geographic footprint, ample land supply, and wide product breadth. The homebuilder serves a diverse range of homebuyers, including entry-level, move-up, higher-end, and active adult. Recognizing the growth opportunity from price-conscious first-time buyers, D.R. Horton launched Express Homes, its entry-level product, in 2014. D.R. Horton's focus on affordable price points has paid off, in our view, and homes priced at or below $350,000 now account for over 50% of delivered homes.

D.R. Horton saw strong second-quarter results, with revenue and margins in line with guidance despite elevated gas prices and weary consumer sentiment. Homes closed grew by 1% year over year, and orders rose 11%, though homebuilding gross margin fell 170 basis points to 20.1% on higher incentives.

D.R. Horton's fiscal 2026 first-quarter earnings saw diluted EPS fall 22% year over year to $2.03 with homes closed in the homebuilding segment down 7% to 17,818 and segment pretax income down 30%.

Demand for new homes remains under pressure due to poor affordability and an uncertain economic backdrop. Even so, D.R. Horton's fiscal fourth-quarter new orders increased 5% year over year as elevated sales incentives spurred demand.

D.R. Horton is the largest US homebuilder, with an extensive geographic footprint, ample land supply, and wide product breadth. The homebuilder serves a diverse range of homebuyers, including entry-level, move-up, higher-end, and active adult. Recognizing the growth opportunity from price-conscious first-time buyers, D.R. Horton launched Express Homes, its entry-level product, in 2014. D.R. Horton's focus on affordable price points has paid off, in our view, and homes priced at or below $350,000 now account for over 50% of delivered homes.

Demand for new homes remains under pressure because of poor affordability and an uncertain economic backdrop. Even so, D.R. Horton's fiscal third-quarter financial results (ended June) were better than the market feared, sending the firm's stock price up approximately 15% on July 22.

D.R. Horton is the largest US homebuilder, with an extensive geographic footprint, ample land supply, and wide product breadth. The homebuilder serves a diverse range of homebuyers, including entry-level, move-up, higher-end, and active adult. Recognizing the growth opportunity from price-conscious first-time buyers, D.R. Horton launched Express Homes, its entry-level product, in spring 2014. D.R. Horton's focus on affordable price points has paid off, in our view, and homes priced at or below $350,000 now account for over 50% of delivered homes.

D.R. Horton is the largest US homebuilder, with an extensive geographic footprint, ample land supply, and wide product breadth. The homebuilder serves a diverse range of homebuyers, including entry-level, move-up, higher-end, and active adult. Recognizing the growth opportunity from price-conscious first-time buyers, D.R. Horton launched Express Homes, its entry-level product, in spring 2014. D.R. Horton's focus on affordable price points has paid off, in our view, and homes priced at or below $350,000 now account for over 40% of delivered homes.

D.R. Horton's fiscal second-quarter (ended March 31) home deliveries declined 15% year over year to 19,276, short of management's guidance of 20,000-20,500 delivered homes. Compared with the prior-year quarter, total revenue of $7.7 billion declined 15% and EPS of $2.58 fell 27%.

US global trade policy has weighed on both consumer and homebuilder confidence. The spring selling season is off to a slow start, and there is an above-average supply of new, unsold homes.

On April 2, President Donald Trump announced sweeping tariffs, featuring a minimum 10% tariff on all US imports and higher tariff rates for select countries.

D.R. Horton is the largest US homebuilder with an extensive geographic footprint, wide product breadth, and affordable price point. Management is focused on expanding the business while generating steady returns on invested capital and positive cash flows throughout the housing cycle. With ample land supply and product offerings catering to entry-level, move-up, higher-end, and active adult homebuyers, D.R. Horton is well positioned to outperform the US new single-family construction market.

D.R. Horton reported solid first-quarter results considering mortgage rate volatility during the quarter. Home sales declined 2% year over year to $7.1 billion, while new orders were 1% lower. Homebuilding pretax margin fell 90 basis points to 14.1% due to sales incentives and growth investments.

Fourth-quarter revenue declined 5% year over year to $10 billion, in line with our expectations, but EPS of $3.92 slipped 12%, falling short of our $4.12 forecast. Management blamed weaker-than-expected results on prospective homebuyers waiting on the sidelines for lower mortgage rates.

D.R. Horton is the largest US homebuilder with an extensive geographic footprint, wide product breadth, and affordable price point. Management is focused on expanding the business while generating steady returns on invested capital and positive cash flows throughout the housing cycle.

D.R. Horton's stock surged on July 18 after the no-moat homebuilder released its fiscal third-quarter financial results. With the average 30-year fixed mortgage rate around 7%, affordability remains challenging for many prospective homebuyers. Nevertheless, Horton continues to benefit from its relatively affordable price point compared with other builders and its ability to offer customers attractive sales incentives, such as mortgage rate buydowns. We've raised our fair value estimate by roughly 4% to $146 per share due to our more optimistic gross margin outlook and the time value of money since our last update.

D.R. Horton is the largest US homebuilder with an extensive geographic footprint, wide product breadth, and affordable price point. Management is focused on expanding the business while generating steady returns on invested capital and positive cash flows throughout the housing cycle.