Financial Data and Key Metrics Changes - In Q4 2025, consolidated pretax income was $1.2 billion on revenues of $9.7 billion, resulting in a pretax profit margin of 12.4% [7] - For the full year, consolidated pretax income was $4.7 billion with a pretax profit margin of 13.8% [7] - The average closing sales price for Q4 was $365,600, down 1% sequentially and 3% year over year [10] - The company generated $3.4 billion of cash from operations after making homebuilding investments totaling $8.5 billion [9] Business Line Data and Key Metrics Changes - Home sales revenues for Q4 were $8.5 billion on 23,368 homes closed [10] - Net sales orders in Q4 increased 5% year over year to 20,078 homes, with order value rising 3% to $7.3 billion [11] - The average price of net sales orders in Q4 was $364,900, flat sequentially and down 3% from the prior year [11] - Rental operations generated $81 million of pretax income on $805 million of revenues from single-family and multifamily rental homes [15] Market Data and Key Metrics Changes - The average number of active selling communities was up 1% sequentially and 13% from the prior year [11] - The company’s homebuilding lot position at year-end consisted of approximately 592,000 lots, with 25% owned and 75% controlled through purchase contracts [14] - In Texas, net sales orders were up 11% year over year, despite some markets experiencing weakness [72] Company Strategy and Development Direction - The company remains focused on capital efficiency to generate strong operating cash flows and deliver compelling returns to shareholders [8] - The strategy includes tailoring product offerings and sales incentives based on demand in each market to maximize returns [9] - The company plans to purchase approximately $2.5 billion of its common stock and pay around $500 million in dividends for fiscal 2026 [22] Management's Comments on Operating Environment and Future Outlook - Management expects new home demand to reflect ongoing affordability constraints and cautious consumer sentiment [21] - For fiscal 2026, the company anticipates consolidated revenues of approximately $33.5 billion to $35 billion and homes closed to be in the range of 86,000 to 88,000 [22] - The company has a positive outlook for the housing market over the medium to long term, despite current volatility [24] Other Important Information - The company’s fiscal year-end stockholders' equity was $24.2 billion, down 4% from a year ago, but book value per share was up 5% to $82.15 [20] - The company repurchased 30.7 million shares for $4.3 billion during the year, reducing the outstanding share count by 9% [19] Q&A Session Summary Question: What factors will influence the gross margin from Q4 to Q1? - Management indicated that the unusual impact from litigation costs is not expected to persist into Q1, and the baseline expectation for gross margin is around 20.6% [27][28] Question: How quickly can the company ramp up starts to meet demand? - Management stated that while starts were intentionally lower, they are positioned to respond to market demand and increase starts as necessary [30] Question: What is the outlook for rental operations in the upcoming quarters? - Management expects rental operations to be softer in the first quarter, with a heavier delivery expected in the back half of the year [34] Question: Can you provide insights on the Southeast market performance? - Management noted that certain markets in Florida, such as Jacksonville and Southwest Florida, are struggling with excess inventory, impacting overall performance in the Southeast [86]

Core Insights - D.R. Horton reported quarterly earnings of $3.04 per share, missing the Zacks Consensus Estimate of $3.29 per share, and down from $3.92 per share a year ago, representing an earnings surprise of -7.60% [1] - The company posted revenues of $9.68 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.38%, but down from $10 billion year-over-year [2] - D.R. Horton shares have increased by approximately 13.6% year-to-date, compared to the S&P 500's gain of 16.9% [3] Earnings Outlook - 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 current consensus EPS estimate for the next quarter is $2.31 on revenues of $7.22 billion, and for the current fiscal year, it is $12.04 on revenues of $34.67 billion [7] Industry Context - The Building Products - Home Builders industry, to which D.R. Horton belongs, is currently ranked in the bottom 24% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Financial Performance & Shareholder Returns - D.R Horton achieved home sales revenues of $31.4 billion from 84,863 homes closed in fiscal year 2025[12, 90] - The company returned $4.8 billion to shareholders through repurchases and dividends in FY25[9, 86] - D.R Horton repurchased 30.7 million shares of common stock for $4.3 billion, reducing outstanding share count by 9% year-over-year[51, 56, 86] - The company paid cash dividends of $494.8 million, which is $1.60 per common share, a 33% increase compared to the prior year[56, 86] Operational Highlights - D.R Horton's homebuilding operations generated revenues of $8.5 billion from 23,368 homes closed in Q4 2025[84, 87] - The average sales price of homes closed was $370.4K[9, 24] - 72% of homes closed were priced below $400k[23] - D.R Horton's financial services segment, primarily DHI Mortgage, had an 81% mortgage capture rate of D.R Horton homebuyers[16, 31, 81] Future Outlook - For fiscal year 2026, D.R Horton expects consolidated revenues to be in the range of $33.5 billion to $35.0 billion and between 86,000 and 88,000 homes closed[42] - The company anticipates repurchasing approximately $2.5 billion of common stock and paying out ~$500 million in dividends in fiscal 2026[42, 51]

Core Viewpoint - D.R. Horton experienced a decline in fourth-quarter profit due to ongoing affordability concerns affecting home buyers [1] Company Summary - D.R. Horton recorded a lower profit in the fourth quarter, indicating challenges in the housing market [1] - The decrease in profit is attributed to persistent affordability issues that are deterring potential home buyers [1] Industry Summary - The housing market is facing significant affordability challenges, which are impacting buyer sentiment and overall sales [1] - Ongoing concerns about home affordability may lead to a slowdown in housing demand, affecting companies like D.R. Horton [1]

Core Insights - D.R. Horton reported a net income of $905.3 million for its fourth fiscal quarter, with earnings per diluted share at $3.04 [1] Financial Performance - The net income of $905.3 million indicates a strong financial performance for the quarter [1] - Earnings per diluted share of $3.04 reflect the company's profitability during this period [1]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] - A specific company is highlighted as a key player in the AI energy sector, owning critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI technologies [3][7][8] Investment Landscape - Wall Street is investing hundreds of billions into AI, but there is a pressing concern regarding the energy supply needed to sustain this growth [2] - AI data centers, such as those powering large language models, consume energy equivalent to that of small cities, indicating a significant strain on global power grids [2][3] - The company in focus is positioned to benefit from the surge in demand for electricity driven by AI, making it a potentially lucrative investment opportunity [3][6] Company Profile - The company is described as a "toll booth" operator in the AI energy boom, collecting fees from energy exports and benefiting from the onshoring trend due to tariffs [5][6] - It possesses critical nuclear energy infrastructure assets and is capable of executing large-scale engineering, procurement, and construction projects across various energy sectors [7][8] - The company is noted for being debt-free and holding a significant cash reserve, which is nearly one-third of its market capitalization [8][10] Market Position - The company has an equity stake in another prominent AI venture, providing investors with indirect exposure to multiple growth opportunities in the AI sector [9] - It is trading at a low valuation of less than 7 times earnings, which is attractive given its involvement in both AI and energy [10][11] - The company is recognized for its real cash flows and critical infrastructure ownership, distinguishing it from other firms that may be overvalued or heavily indebted [11][12] Future Outlook - The ongoing influx of talent into the AI sector is expected to drive continuous innovation and advancements, reinforcing the importance of investing in AI-related companies [12][13] - The combination of AI infrastructure needs, energy demands, and favorable market conditions presents a unique investment opportunity that is likely to yield significant returns in the near future [14][15]

Core Insights - D.R. Horton Inc. (DHI) is expected to report its fourth-quarter fiscal 2025 results on October 28, with prior earnings and revenues exceeding estimates by 15.9% and 5.1%, respectively, but showing declines of 18% and 7% year-over-year [1][9] Revenue Estimates - The Zacks Consensus Estimate for DHI's earnings per share (EPS) is $3.29, reflecting a 16.1% decline from the previous year's EPS of $3.92 [3] - Revenue estimates for the quarter are set at $9.45 billion, indicating a 5.5% year-over-year decline [3] - D.R. Horton anticipates total revenues for the quarter to be between $9.1 billion and $9.6 billion, down from $10 billion reported a year ago [4] Homebuilding Activity - A slowdown in homebuilding activity is expected, with housing starts projected to be lower than in the previous quarter [5] - The company expects home closures to be between 23,500 and 24,000 units, slightly down from 23,647 units in the same quarter last year [5] Revenue Breakdown - Homebuilding revenues are predicted to decline by 2.1% year-over-year to $8.76 billion, with home closures expected to increase by 0.7% to 23,811 units [6] - Rental Property revenues are estimated at $422.2 million, reflecting a significant 40.1% decline from the previous year [6] - Forestar revenues are projected at $550.5 million, indicating a slight 0.2% decline year-over-year [7] - Financial Services segment revenues are expected to be $213.9 million, down 3.7% from the previous year [7] Margin Expectations - The company anticipates a decrease in gross margins due to inflationary pressures and high sales incentives, with expected home sales gross margin between 21% and 21.5%, down from 23.6% a year ago [8][10] Orders and Backlog - Net sales orders for the fourth quarter are predicted to increase by 11.6% year-over-year to 21,239 units, while backlog is expected to decrease by 5.6% to 11,504 units [11] - The value of the backlog is estimated at $4.49 billion, indicating a 5.9% decline year-over-year [11] Earnings Prediction - The current model does not predict an earnings beat for D.R. Horton, with an Earnings ESP of -0.91% and a Zacks Rank of 3 [12]

Core Viewpoint - The recent downgrade of DR Horton Inc (NYSE:DHI) by analysts is attributed to concerns over the U.S. government's focus on supply-side solutions to housing affordability, which may negatively impact homebuilders [1][2]. Company Summary - DR Horton Inc (NYSE:DHI) is the largest homebuilder in the U.S., holding approximately 10% market share and benefiting from scale advantages in a fragmented industry [3]. - The company was noted as the best-performing holding in the Consumer Discretionary sector for Heartland Mid Cap Value Fund in the third quarter of 2025, indicating strong performance despite the downgrade [3]. Industry Summary - Analysts believe that the current housing market faces a demand problem rather than a supply problem, contradicting the government's view that a national housing deficit is due to insufficient home construction [2]. - The government's perception that builders are intentionally limiting home production to maintain profitability could lead to misguided policies that do not address the actual demand issues in the housing market [2].

Group 1: Company Overview - DR Horton Inc (NYSE:DHI) is identified as one of the trending stocks this week, reflecting growing interest in the housing sector [1] - Stephanie Link, chief investment strategist at Hightower Advisors, includes DR Horton in her portfolio, anticipating a bullish housing cycle due to declining interest rates and a shortage of homes in the US [1][2] Group 2: Industry Insights - The current housing market has not experienced a cycle, yet it is still growing at a rate of 3.8%, indicating potential for significant growth when a housing cycle does occur [2] - The housing market has a multiplier effect, as homeownership leads to increased spending on furnishings and transportation, further stimulating economic activity [2]

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for D.R. Horton (DHI) due to lower revenues, with a focus on how actual results will compare to estimates to influence stock price movements [1][2]. Earnings Expectations - D.R. Horton is expected to report quarterly earnings of $3.29 per share, reflecting a year-over-year decrease of 16.1%. Revenues are projected at $9.45 billion, down 5.5% from the previous year [3]. - The consensus EPS estimate has been revised 0.31% lower in the last 30 days, indicating a bearish sentiment among analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for D.R. Horton is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.91%, complicating predictions for an earnings beat [12]. - A positive Earnings ESP is generally a strong predictor of an earnings beat, especially when combined with a favorable Zacks Rank [10]. Historical Performance - In the last reported quarter, D.R. Horton exceeded expectations with earnings of $3.36 per share against an anticipated $2.9, achieving a surprise of +15.86% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates twice [14]. Conclusion - D.R. Horton does not currently appear to be a strong candidate for an earnings beat, and investors should consider additional factors when making decisions regarding the stock ahead of the earnings release [17].