Group 1 - D.R. Horton reported quarterly earnings of $2.61 per share, exceeding the Zacks Consensus Estimate of $2.40 per share, but down from $2.82 per share a year ago, representing an earnings surprise of 8.75% [1] - The company achieved revenues of $7.61 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 6.79%, although this is a decrease from year-ago revenues of $7.73 billion [2] - D.R. Horton has outperformed the S&P 500 with a 5.6% increase in shares since the beginning of the year, compared to the S&P 500's gain of 2% [3] Group 2 - The company's earnings outlook is crucial for investors, including current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The trend of estimate revisions for D.R. Horton has been unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $3.20 on revenues of $8.73 billion, and for the current fiscal year, it is $13.97 on revenues of $37.24 billion [7] Group 3 - The Building Products - Home Builders industry, to which D.R. Horton belongs, is currently ranked in the bottom 14% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Another company in the same industry, Toll Brothers, is expected to report quarterly earnings of $1.99 per share, reflecting a year-over-year decline of 11.6%, with revenues projected at $1.9 billion, down 2.6% from the previous year [9]

Core Viewpoint - D.R. Horton Inc. is expected to report a decline in earnings and revenues for the first quarter of fiscal 2025, with significant challenges stemming from high mortgage rates and inflationary pressures [1][4][9]. Revenue Estimates - The Zacks Consensus Estimate for D.R. Horton's earnings per share (EPS) is $2.40, reflecting a 14.9% decline from the previous year's $2.82 [3]. - Total revenues are projected to be between $6.8 billion and $7.3 billion, down from $7.7 billion reported a year ago, indicating a year-over-year decline of approximately 7.7% [4][3]. - Homebuilding revenues, which constitute the majority of total revenues, are expected to decline by 8.4% year over year to $6.69 billion due to a decrease in homes closed [6][5]. Segment Performance - The Homebuilding segment, contributing 89.5% of total revenues in the previous quarter, is anticipated to see a decline in closed homes, with estimates between 17,500 and 18,000 units, down from 19,340 units a year ago [5][6]. - Rental Property revenues are expected to be $184.5 million, reflecting a 5.6% decline from the previous year [7]. - Financial Services segment revenues are projected to increase by 2.5% year over year to $197.3 million [8]. Margin Expectations - The home sales gross margin is expected to contract to 22.4% from 22.9% reported a year ago, influenced by inflation and supply chain concerns [9]. - Homebuilding selling, general and administrative (SG&A) expenses are expected to rise to approximately 8.9% of revenues, compared to 8.3% reported a year ago [10]. Orders and Backlog - Net sales orders are predicted to increase by 3.1% year over year to 18,629 units, while the backlog is expected to decrease to 13,032 units, down from 13,965 units a year ago [12]. - The value of the backlog is estimated to be $5.07 billion, indicating a decline of 6.8% year over year [12]. Earnings Prediction - The current model does not predict an earnings beat for D.R. Horton, with an Earnings ESP of +1.96% and a Zacks Rank of 4 (Sell) [13].

Company Overview - D R Horton Inc (NYSE DHI) is the largest homebuilding company in the US based on the number of homes closed [1] - The company builds and sells houses across 125 different markets in 36 different states [1] Business Segments - The company's business segments consist of various operations related to homebuilding [1] Analyst's Perspective - The analyst focuses on identifying small cap companies with strong fundamentals and growth potential [1] - The analyst also looks for large cap companies going through temporary setbacks and stable companies with solid dividend yields and growth potential [1] Analyst's Background - The analyst has a strong quantitative background with a PhD in Chemical Engineering from the University of California Santa Barbara specializing in model predictive control [1] - The analyst also holds an MBA from the Jones School of Business at Rice University [1]

Financial Performance - D.R. Horton is set to release its first-quarter financial results on January 21, 2025, with expected earnings of $2.38 per share, a decrease from $2.82 per share in the same period last year [1] - The company projects quarterly revenue of $7.08 billion, down from $7.73 billion a year earlier [1] - The fourth-quarter results reported on October 29 were worse than expected, indicating potential challenges in performance [1] Stock Performance - D.R. Horton shares increased by 0.8%, closing at $146.60 [2] - Recent analyst ratings show a mix of opinions, with some maintaining ratings while others have downgraded the stock [3] Analyst Ratings - Barclays analyst maintained an Equal-Weight rating and reduced the price target from $170 to $150 [3] - UBS analyst kept a Buy rating but lowered the price target from $214 to $203 [3] - Citigroup analyst maintained a Neutral rating and cut the price target from $185 to $152 [3] - JP Morgan downgraded the stock from Neutral to Underweight, reducing the price target from $188 to $156 [3] - Raymond James downgraded the stock from Outperform to Market Perform [3]

Core Viewpoint - Analysts expect D.R. Horton (DHI) to report quarterly earnings of $2.41 per share, reflecting a year-over-year decline of 14.5%, with revenues projected at $7.13 billion, down 7.7% from the previous year [1]. Revenue Estimates - Home sales revenue is estimated to be $6.79 billion, indicating a decrease of 6.6% year-over-year [4]. - Financial Services revenue is projected at $180.88 million, down 6.1% from the prior year [4]. - Rental revenue is expected to reach $207.45 million, showing an increase of 6.2% compared to the previous year [4]. - Homebuilding revenue is forecasted at $6.86 billion, reflecting a 6% decline year-over-year [5]. Geographic Revenue Projections - Homebuilding revenue in the Northwest is expected to be $521.59 million, down 9.7% year-over-year [5]. - Homebuilding revenue in the North is projected at $858.71 million, indicating an increase of 17.6% from the prior year [5]. - Homebuilding revenue in the Southwest is estimated at $974.10 million, down 7.4% year-over-year [6]. - Homebuilding revenue in South Central is expected to reach $1.46 billion, reflecting a decrease of 12.3% from the previous year [6]. Key Metrics - Analysts predict that the number of homes closed will be 17,963, down from 19,340 in the same quarter last year [7]. - Net sales orders for homes sold are expected to reach 18,485, compared to 18,069 in the previous year [7]. - The average selling price for homes closed is estimated at $375.67 million, slightly down from $376.20 million in the same quarter last year [8]. - The average selling price for sales order backlog is projected at $390.97 million, compared to $389.70 million a year ago [8]. Market Performance - D.R. Horton shares have decreased by 2.4% over the past month, compared to a 3.3% decline in the Zacks S&P 500 composite [8].

Core Viewpoint - The market anticipates a year-over-year decline in D.R. Horton's earnings due to lower revenues, with a focus on how actual results will compare to estimates [1][2]. Earnings Expectations - D.R. Horton is expected to report quarterly earnings of $2.41 per share, reflecting a -14.5% change year-over-year [3]. - Revenues are projected to be $7.13 billion, down 7.7% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' assessments [4]. - The Most Accurate Estimate for D.R. Horton is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +1.76% [10]. Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of a potential earnings beat, especially when combined with a favorable Zacks Rank [8]. - D.R. Horton currently holds a Zacks Rank of 4, which complicates the prediction of an earnings beat despite the positive Earnings ESP [11]. Historical Performance - In the last reported quarter, D.R. Horton was expected to post earnings of $4.20 per share but delivered $3.92, resulting in a surprise of -6.67% [12]. - Over the past four quarters, the company has beaten consensus EPS estimates two times [13]. Conclusion - While D.R. Horton does not appear to be a strong candidate for an earnings beat, investors should consider other factors influencing stock performance ahead of the earnings release [16].

Core Insights - The journey to financial independence began in 2011, focusing on living below means and intelligent investing [1] - Achieved financial freedom by age 33, transitioning from a negative financial state at age 27 [1] - Emphasis on dividend growth investing and identifying undervalued high-quality dividend stocks [1] Company and Industry Focus - The company is involved in creating content related to dividend growth investing and long-term investment opportunities [1] - The founder has established multiple platforms, including Dividend Mantra and Mr. Free At 33, to promote financial independence [2] - Co-founded Dividends & Income, indicating a focus on income-generating investment strategies [2]

Company Performance - D.R. Horton (DHI) ended the recent trading session at $151.21, showing a -1.61% change from the previous day's closing price, underperforming the S&P 500's daily loss of 0.54% [1] - Shares of D.R. Horton have decreased by 4.62% over the past month, while the Construction sector lost 3.56% and the S&P 500 gained 1.5% during the same period [1] Upcoming Earnings Report - D.R. Horton is scheduled to release its earnings on January 21, 2025, with projected earnings of $2.41 per share, reflecting a year-over-year decline of 14.54% [2] - The consensus estimate anticipates revenue of $7.16 billion, indicating a 7.35% decrease from the same quarter last year [2] Full Year Projections - For the full year, the Zacks Consensus Estimates project earnings of $14.17 per share and revenue of $37.22 billion, representing changes of -1.19% and +1.15% respectively from the prior year [3] Analyst Estimates and Rankings - Recent modifications to analyst estimates for D.R. Horton indicate changing near-term business trends, with positive revisions suggesting optimism about the company's outlook [4] - The Zacks Rank system currently rates D.R. Horton as 5 (Strong Sell), with the Zacks Consensus EPS estimate having moved 2.61% lower in the past month [6] Valuation Metrics - D.R. Horton has a Forward P/E ratio of 10.85, which is higher than the industry average Forward P/E of 9.02, suggesting that D.R. Horton is trading at a premium [7] - The company holds a PEG ratio of 0.57, compared to the industry average PEG ratio of 0.69, indicating a relatively favorable valuation in terms of expected earnings growth [8] Industry Context - The Building Products - Home Builders industry, which includes D.R. Horton, has a Zacks Industry Rank of 144, placing it within the bottom 43% of over 250 industries [9]

Group 1 - The homebuilding market is viewed positively, with a specific mention of D.R. Horton, Inc. as a noteworthy company in this sector [1] - Crude Value Insights focuses on cash flow and companies in the oil and natural gas sector, highlighting their value and growth prospects [1] Group 2 - Subscribers to the service gain access to a stock model account with over 50 stocks and in-depth cash flow analyses of exploration and production firms [2] - The service includes live chat discussions about the oil and gas sector, enhancing community engagement [2]

Core Viewpoint - D.R. Horton reported disappointing fourth-quarter fiscal 2024 results, with earnings and revenues missing estimates and declining year-over-year, primarily due to high mortgage rates and buyer hesitancy [2][3][5]. Earnings and Revenue Summary - Adjusted earnings for Q4 were $3.92 per share, missing the Zacks Consensus Estimate of $4.20 by 6.7% and down 11.9% from $4.45 a year ago [5]. - Total revenues were $10 billion, a decrease of 4.8% year-over-year, and below the expected $10.2 billion [5]. - Homebuilding revenues increased slightly by 1.8% to $8.95 billion, while home sales rose 1.7% to $8.93 billion [7]. Margin and Profitability - The consolidated pre-tax profit margin was 17.1%, down from 19.2% a year ago [6]. - Homebuilding pre-tax margin for fiscal 2024 was 16.1%, contracting by 50 basis points from fiscal 2023 [11]. Segment Performance - Financial Services revenues increased by 1.1% to $222 million, while the Rental business generated $704.8 million, down from $1.39 billion a year ago [9][10]. - The order backlog at the end of fiscal 2024 was 12,180 homes, down 20% year-over-year, with a backlog value of $4.8 billion, down 19% [8]. Financial Position - Cash, cash equivalents, and restricted cash totaled $4.54 billion as of September 30, 2024, up from $3.9 billion at the end of fiscal 2023 [12]. - Total liquidity was $7.6 billion, with $3.1 billion available on the revolving credit facility [12]. Shareholder Returns - D.R. Horton increased its quarterly dividend by 33% to 40 cents per share, reflecting a commitment to disciplined capital allocation [4]. - The company repurchased 3.4 million shares for $561.2 million in Q4, with a remaining stock repurchase authorization of $3.6 billion [14]. Fiscal 2025 Guidance - The company expects consolidated revenues between $36 billion and $37.5 billion for fiscal 2025, with homes closed anticipated between 90,000 and 92,000 units [15]. Market Position and Outlook - D.R. Horton is positioned to benefit from limited affordable home supply and favorable demographics, despite current market challenges [3][4]. - Estimates for the stock have trended downward, leading to a Zacks Rank of 5 (Strong Sell) [19].