Why Is D.R. Horton (DHI) Down 13.7% Since Last Earnings Report?

Core Viewpoint - D.R. Horton reported mixed financial results for Q1 fiscal 2025, with earnings and revenues beating estimates but declining year-over-year, raising questions about future performance amid a challenging housing market [2][5][14]. Financial Performance - Adjusted earnings for Q1 were $2.61 per share, exceeding the Zacks Consensus Estimate of $2.40 by 8.8%, but down 7.4% from $2.82 a year ago [5]. - Total revenues reached $7.6 billion, a decrease of 1.5% year-over-year, yet above analysts' expectations of $7.13 billion [5]. - The consolidated pre-tax profit margin was 14.6%, down from 16.1% in the previous year [6]. Segment Performance - Homebuilding revenues were $7.17 billion, down 1.8% from the prior year, with home sales also declining by 1.8% to $7.15 billion [7]. - Home closings decreased by 1% to 19,059 homes, while net sales orders fell by 1% to 17,837 homes, with the value of net orders down 2% to $6.7 billion [7]. - The order backlog at the end of Q1 was 11,003 homes, down 21% year-over-year, with a backlog value of $4.3 billion [8]. Liquidity and Capital Management - D.R. Horton reported cash and cash equivalents of $3.07 billion as of December 31, 2024, down from $4.54 billion at the end of fiscal 2024, with total liquidity at $6.5 billion [10]. - The company had $5.1 billion in debt, resulting in a debt to total capital ratio of 17% [11]. - D.R. Horton repurchased 6.8 million shares for $1.1 billion in Q1, with $2.5 billion remaining in stock repurchase authorization [12]. Guidance and Market Outlook - For fiscal 2025, D.R. Horton expects consolidated revenues between $36 billion and $37.5 billion, with homes closed anticipated to be between 90,000 and 92,000 units [13]. - Recent estimates have trended downward, with a consensus estimate shift of -14.28%, leading to a Zacks Rank of 5 (Strong Sell) for the stock [14][16].