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D.R. Horton (DHI) Stock Sinks As Market Gains: What You Should Know

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Zacks Equity Research
·3-min read
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D.R. Horton (DHI) closed at $93.14 in the latest trading session, marking a -0.65% move from the prior day. This change lagged the S&P 500's daily gain of 0.33%.

Prior to today's trading, shares of the homebuilder had gained 16.41% over the past month. This has outpaced the Construction sector's gain of 6.09% and the S&P 500's gain of 4.77% in that time.

Wall Street will be looking for positivity from DHI as it approaches its next earnings report date. This is expected to be April 22, 2021. On that day, DHI is projected to report earnings of $2.20 per share, which would represent year-over-year growth of 69.23%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.17 billion, up 37.06% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.16 per share and revenue of $25.98 billion. These totals would mark changes of +42.9% and +27.9%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for DHI. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.05% lower. DHI currently has a Zacks Rank of #3 (Hold).

Digging into valuation, DHI currently has a Forward P/E ratio of 10.25. This valuation marks a premium compared to its industry's average Forward P/E of 9.61.

We can also see that DHI currently has a PEG ratio of 0.76. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. DHI's industry had an average PEG ratio of 0.8 as of yesterday's close.

The Building Products - Home Builders industry is part of the Construction sector. This group has a Zacks Industry Rank of 60, putting it in the top 24% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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