Company Performance - D.R. Horton (DHI) closed at $157.46, reflecting a -3.96% change from the previous day, underperforming the S&P 500's 0.81% gain [1] - Over the last month, D.R. Horton's shares increased by 10.34%, outperforming the Construction sector's gain of 8.81% and the S&P 500's loss of 0.25% [1] Upcoming Earnings - D.R. Horton is expected to release its earnings on April 21, 2026, with a predicted EPS of $2.18, indicating a 15.5% decline compared to the same quarter last year [2] - The consensus estimate for revenue is $7.7 billion, showing a 0.47% drop compared to the year-ago quarter [2] Annual Estimates - For the annual period, the Zacks Consensus Estimates anticipate earnings of $10.53 per share and revenue of $34.01 billion, reflecting shifts of -8.99% and -0.7% from the previous year [3] - Recent changes in analyst estimates indicate a favorable outlook on the business health and profitability [3] Zacks Rank and Valuation - D.R. Horton currently holds a Zacks Rank of 5 (Strong Sell), with the Zacks Consensus EPS estimate moving 1.99% lower in the past month [5] - The company has a Forward P/E ratio of 15.57, which is higher than the industry average of 15.01, suggesting it is trading at a premium [6] Industry Context - D.R. Horton operates within the Building Products - Home Builders industry, which ranks in the bottom 2% of all industries according to the Zacks Industry Rank [8] - The average PEG ratio for D.R. Horton is 2.53, compared to the industry average of 2.24 [7]

Core Insights - The article emphasizes the importance of unique insights and knowledge in stock analysis, aiming to provide contrasting views on investment portfolios [1] Group 1 - The analyst expresses a commitment to sharing personal opinions and insights without any financial compensation from the companies mentioned [2] - The analysis is intended for informational purposes only, highlighting the necessity for investors to conduct their own research and due diligence [3] - There is a disclaimer regarding past performance not guaranteeing future results, indicating that the views expressed may not represent the entire platform [4]

It has been about a month since the last earnings report for D.R. Horton (DHI) . Shares have added about 5.8% in that time frame, outperforming the S&P 500.But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is D.R. Horton due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.D.R. Horton ...

Core Insights - Many investors have lost faith in housing stocks due to the rise in 30-year fixed mortgage rates from under 3% in 2021 to nearly 8% in 2023, but homebuilders are expected to thrive by 2026 [1] Group 1: Housing Supply Dynamics - The U.S. housing market is experiencing a supply crisis, exacerbated by underbuilding since the 2008 financial crisis and the acquisition of homes by private equity firms like Blackstone [1] - The monthly supply of new houses in the U.S. is at its lowest level since September 2024, indicating a significant supply constraint [1] Group 2: Homeowner Behavior - Approximately half of U.S. homeowners have mortgage rates below 4%, leading to a 'Golden Handcuff' effect that freezes the existing home market and increases reliance on new construction [2][5] Group 3: Future Mortgage Rates - Analysts predict a gradual decline in mortgage rates by 2026, which could create favorable conditions for homebuilders as demand rises while existing homeowners remain in place due to low rates [6] Group 4: Government Initiatives - The Trump Administration has proposed a plan to construct 1 million entry-level homes to increase housing supply, supported by bipartisan efforts [7] - Fannie Mae and Freddie Mac are set to purchase $200 billion in mortgage-backed securities to help lower interest rates [7] Group 5: Earnings Expectations - Homebuilders like DR Horton and Lennar are expected to return to double-digit EPS growth by next year after several quarters of negative EPS [8] - Zacks Consensus Estimates show a projected EPS growth of 26.61% from 2026 to 2027, indicating a positive outlook for the sector [9] Group 6: Market Performance - The stock performance of homebuilders is showing strength, with companies like Toll Brothers experiencing a 19% increase year-to-date [10] Group 7: Structural Advantages - The current market conditions present a unique structural advantage for homebuilders, bridging the gap between supply deficits and federal initiatives aimed at affordability [11]

Core Viewpoint - Builder stocks are experiencing an increase due to expectations of a more active spring homebuying season [1] Group 1 - The anticipation of a busier spring homebuying season is positively impacting builder stocks [1]

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Core Insights - Warren Buffett has stepped down as CEO of Berkshire Hathaway after over 65 years, transforming the company from a failing textile business into a diversified conglomerate with a wide range of subsidiaries and investments in publicly traded companies [1] Investment Strategy - Despite Buffett's famous quote about a "forever" holding period, he has been actively buying and selling stocks based on market valuations, being a net seller of stocks in every quarter leading up to his retirement at the end of 2025 [2] - In the most recent quarter, Berkshire Hathaway sold $12.5 billion worth of stocks, with specific details revealed in the SEC's form 13F filing [3] Stock Sales - Buffett has been reducing Berkshire's stakes in Apple and Bank of America due to their high valuations, with Apple trading at a P/E ratio comparable to faster-growing tech companies despite slow revenue growth [4] - Bank of America's share price has significantly increased since Buffett's initial investment, nearing twice its tangible book value by the end of 2025 [5] Unique Transactions - The sale of Verisign, which has exclusive rights to register .com and .net domain names, is notable as it reduced Berkshire's stake below 10%, triggering SEC disclosure requirements. Additionally, Berkshire has committed not to sell any remaining stake for at least one year [8]

Performance Overview - The Third Avenue Real Estate Value Fund generated a return of +11.61% for the year ended December 31, 2025, outperforming its benchmark, the MSCI ACWI IMI Core Real Estate Index, which returned +9.86% [2][3] - Since its inception in 1998, the Fund has achieved an annualized return of +8.96%, indicating that an initial investment of $100,000 would exceed $1,000,000 by year-end with reinvested distributions [4] Key Contributors and Detractors - Major contributors to the Fund's performance included investments in National Storage REIT and several industrial and logistics REITs such as Prologis, First Industrial, and Segro plc [3] - Detractors included investments in U.S. homebuilders like Lennar Corp., PulteGroup, and D.R. Horton, as well as certain U.K. property companies [3] Fund Management Strategy - The Fund Management emphasizes long-term results and has refined its investment strategy to focus on well-capitalized enterprises with discounted securities [8][9] - The Firm's approach to value investing has remained consistent, targeting opportunities for resource conversion, including privatizations and mergers [10][11] Recent Additions and Changes - The Fund initiated a position in FirstService Corporation, a Canadian real estate services company, which meets the Fund's investment criteria due to its conservative capitalization and strong management [12][13] - Other changes included adding to positions where the price-to-value gap widened, such as Unite Group and Fidelity National Financial, while trimming back on CBRE Group and JLL Inc. [16] Sector Allocations - 40.3% of the Fund's capital is invested in U.S. residential real estate companies, supported by strong demand and low inventory levels [18] - 27.5% is allocated to North American commercial real estate companies, which are expected to benefit from structural demand drivers [19] - 27.6% is invested in international real estate companies, focusing on similar activities as domestic holdings [20] - The remaining 4.6% is in cash, debt, and options, including U.S. Dollar cash and short-term U.S. Treasuries [21] Market Insights - The Fund Management believes that the next five years could mirror the early 2000s, with compelling valuations for listed real estate leading to net inflows and differentiated returns [29][30] - The report highlights the significant size of the publicly traded real estate market, with over $6 trillion accessible to investors globally [28]

Core Insights - D.R. Horton reported a revenue of $6.89 billion for the quarter ended December 2025, reflecting a year-over-year decline of 9.5% and an EPS of $2.03, down from $2.61 a year ago, although the revenue exceeded the Zacks Consensus Estimate by 2.91% [1] Financial Performance Metrics - The average selling price for homes closed was $365.5 million, slightly above the average estimate of $362.65 million [4] - Homes closed totaled 17,818, surpassing the average estimate of 17,341 [4] - Net sales orders for homes were 18,300, slightly below the average estimate of 18,613 [4] - The sales order backlog stood at 11,376, below the average estimate of 11,995 [4] Geographic Revenue Breakdown - Homebuilding revenue in the Northwest was $546.7 million, exceeding the estimate of $526.71 million, representing a year-over-year increase of 2.5% [4] - Homebuilding revenue in the North reached $989.5 million, above the estimate of $957.85 million, with a year-over-year increase of 5% [4] - Homebuilding revenue in the Southwest was $894.7 million, below the estimate of $948.6 million, reflecting a year-over-year decline of 21.5% [4] - Homebuilding revenue in South Central was $1.39 billion, slightly above the estimate of $1.35 billion, but down 6.6% year-over-year [4] Revenue Sources - Home sales revenue was $6.51 billion, exceeding the average estimate of $6.29 billion, but down 8.9% year-over-year [4] - Rental revenue was $109.5 million, significantly below the average estimate of $181.48 million, marking a year-over-year decline of 49.7% [4] - Financial services revenue was $184.6 million, above the average estimate of $168.25 million, with a year-over-year increase of 1.3% [4] - Overall homebuilding revenue was $6.53 billion, surpassing the average estimate of $6.31 billion, but down 8.9% year-over-year [4] Stock Performance - D.R. Horton shares have returned +2.8% over the past month, outperforming the Zacks S&P 500 composite's +0.4% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance in the near term [3]

Financial Performance - Consolidated revenues decreased 10% to $6.9 billion compared to $7.6 billion in the prior year period [115]. - Net income attributable to D.R. Horton decreased 30% to $594.8 million compared to $844.9 million [124]. - Homebuilding revenues for the three months ended December 31, 2025, were $6.53 billion, a decrease of 8.9% compared to $7.17 billion in the prior year period [159]. - The company reported a pre-tax income of $0.2 million for the three months ended December 31, 2025, a significant decline from $11.9 million in the same period last year [182]. - The company's pre-tax income for the three months ended December 31, 2025, was $798.1 million, a decrease from $1.1 billion in the prior year period [201]. - Net income for the three months ended December 31, 2025, was $535.2 million, compared to $3,154.8 million for the year ended September 30, 2025 [251]. Home Sales and Closings - Homes closed decreased 7% to 17,818 homes, with an average closing price of $365,500, down 3% [124]. - Homes closed in Q4 2025 totaled 17,818, generating revenues of $6.51 billion, down from 19,059 homes and $7.15 billion in Q4 2024, representing a 7% decrease in closing volume and a 3% decrease in average selling price [142]. - Net sales orders increased 3% to 18,300 homes, with the value of net sales orders remaining flat at $6.7 billion [124]. - The cancellation rate for sales orders remained stable at 18% for both Q4 2025 and Q4 2024, with total cancelled sales orders valued at $1.50 billion [137]. - Homes in backlog as of December 31, 2025, totaled 11,376, with a total value of $4.31 billion, reflecting a 3% increase in backlog volume compared to 11,003 homes valued at $4.30 billion in 2024 [138]. Margins and Costs - Home sales gross margin decreased to 20.4% from 22.7% in the prior year period [124]. - The gross profit margin from home sales decreased to 20.4% in Q4 2025 from 22.7% in Q4 2024, attributed to increased average costs and decreased average selling prices [146]. - Selling, General and Administrative (SG&A) expenses decreased by 1% to $632.5 million in Q4 2025, but as a percentage of revenues, SG&A increased to 9.7% from 8.9% in the prior year [153]. Regional Performance - The South Central region saw an 8% increase in net homes sold, totaling 4,931 homes in Q4 2025, while the Northwest region experienced a 9% decrease, selling 923 homes [132]. - Homebuilding revenues in the Southwest region decreased by 22% to $894.7 million in Q4 2025, with pre-tax income dropping to $88.6 million from $168.4 million [163]. - The Southeast region saw a 17% decline in homebuilding revenues to $1.46 billion, with pre-tax income falling to $143.4 million from $222.8 million [166]. - The North region experienced a 5% increase in homebuilding revenues to $989.5 million, but pre-tax income decreased to $119.9 million from $129.8 million [168]. Inventory and Land - As of December 31, 2025, total inventory amounted to $20,239.4 million, a slight decrease from $20,316.5 million on September 30, 2025 [171]. - The company controlled 590,500 lots as of December 31, 2025, with 145,500 lots owned and 445,000 lots under purchase contracts [173]. - The total remaining purchase price of lots controlled through land and lot purchase contracts was $26.7 billion as of December 31, 2025, up from $26.0 billion on September 30, 2025 [174]. - The company acquired SK Builders for approximately $80 million in cash, adding 160 homes in inventory and 260 lots, along with a backlog of 110 homes [158]. Cash Flow and Financing - Cash provided by operating activities was $854.0 million for the three months ended December 31, 2025, compared to $646.7 million in the prior year period [237]. - Net cash used in investing activities was $116.2 million for the three months ended December 31, 2025, including $82.1 million related to a business acquisition [239]. - Net cash used in financing activities was $1.2 billion for the three months ended December 31, 2025, primarily for stock repurchases and mortgage repurchase facilities [241]. - The company expects to fund short-term financing needs with existing cash and cash generated from operations, while long-term needs may be funded through the issuance of senior unsecured debt or equity securities [240]. Debt and Equity - Homebuilding debt was $3.2 billion, unchanged from September 30, 2025 [128]. - The ratio of debt to total capital was 18.8% at December 31, 2025, down from 19.8% at September 30, 2025 [207]. - The company has a $2.305 billion senior unsecured homebuilding revolving credit facility, with an option to increase to $3.0 billion, and $2.04 billion matures on December 18, 2029 [211]. - The company repurchased 4.4 million shares at a total cost of $669.7 million during the three months ended December 31, 2025, with $2.6 billion remaining under the stock repurchase authorization [215]. Rental Operations - Rental revenues decreased to $109.5 million for the three months ended December 31, 2025, down from $217.8 million in the prior year period [182]. - The rental property inventory was valued at $2.9 billion as of December 31, 2025, compared to $2.7 billion on September 30, 2025 [183]. - The gross profit margin for rental operations was 15.2% for the three months ended December 31, 2025, down from 16.0% in the prior year [181]. - Single-family rental homes inventory included 1,330 homes as of December 31, 2025, down from 1,420 homes on September 30, 2025 [183]. Future Outlook - The company plans to manage home pricing, sales incentives, and inventory levels based on local market demand, indicating a focus on affordability amid ongoing market challenges [136]. - The company expects to maintain elevated incentive levels throughout fiscal 2026, depending on market conditions and mortgage interest rates [148]. - The company anticipates greater revenues and pre-tax income in the third and fourth quarters of its fiscal year due to seasonal patterns in homebuilding [254].