Why Is D.R. Horton (DHI) Stock Soaring Today
What Happened:
Shares of homebuilder (NYSE:DHI) jumped 11.7% in the morning session after the company reported second quarter earnings results that beat analysts' revenue expectations; Its EPS also outperformed Wall Street's estimates.
On the other hand, its backlog misses analysts' estimates, and since this is a leading indicator of revenue, it is a bad sign for future topline trends. As such, the company lowered full year revenue guidance.
On a more positive note, the Board of Directors approved a new share repurchase authorization of $4.0 billion, a sign that the company is committed to returning value to shareholders. Overall, this was a mixed quarter for D.R. Horton, with the stock likely up due to the announced buyback program.
Is now the time to buy D.R. Horton? Access our full analysis report here, it's free.
What is the market telling us:
D.R. Horton's shares are somewhat volatile and over the last year have had 9 moves greater than 5%. But moves this big are very rare even for D.R. Horton and that is indicating to us that this news had a significant impact on the market's perception of the business.
D.R. Horton is up 16.3% since the beginning of the year. Investors who bought $1,000 worth of D.R. Horton's shares 5 years ago would now be looking at an investment worth $3,852.
When a company has more cash than it knows what to do with, buying back its own shares can make a lot of sense–as long as the price is right. Luckily, we’ve found one, a low-priced stock that is gushing free cash flow AND buying back shares. Click here to claim your Special Free Report on a fallen angel growth story that is already recovering from a setback.