Stocks of D.R. Horton Inc. (DHI) are poised to climb above their peers

D.R. Horton Inc. (NYSE: DHI) stock fell -0.82% on Friday to $71.34 against a previous-day closing price of $71.93. With 4.21 million shares changed hands, the volume of the stock remained heavier than its average volume of 3.05 million shares. During the session, the Residential Construction company that operates in wider Consumer Cyclical sector, reached to the highest price of $73.74 whereas the lowest price it dropped to was $71.19. The 52-week range on DHI shows that it touched its highest point at $110.45 and its lowest point at $59.25 during that stretch. It currently has a 1-year price target of $94.28. With its current market cap of 24.27 billion, DHI has annualized dividend of $0.90 while the current yield stands at 1.26%. Beta for the stock currently stands at 1.60.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of DHI was up-trending over the past week, with a rise of 3.39%, but this was down by -1.87% over a month. Three-month performance surged to 11.33% while six-month performance fell -13.83%. The stock lost -18.87% in the past year, while it has lost -34.22% so far this year. A look at the trailing 12-month EPS for DHI yields 15.57 with Next year EPS estimates of 14.19. For the next quarter, that number is 5.26. This implies an EPS growth rate of 78.00% for this year and -16.74% for next year. EPS is expected to grow by 11.98% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 37.00%.

Float and Shares Shorts:

At present, 350.80 million DHI shares are outstanding with a float of 305.88 million shares on hand for trading. On Aug 30, 2022, short shares totaled 11.45 million, which was 3.30% higher than short shares on Jul 28, 2022. In addition to Mr. Donald R. Horton as the firm’s Chairman, Mr. David V. Auld serves as its Pres & CEO.

Institutional Ownership:

Through their ownership of 87.96% of DHI’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 7.19% of DHI, in contrast to 52.47% held by mutual funds. Shares owned by individuals account for 35.53%. As the largest shareholder in DHI with 10.58% of the stake, Capital Research & Management Co holds 36,754,571 shares worth 36,754,571. A second-largest stockholder of DHI, The Vanguard Group, Inc., holds 33,735,159 shares, controlling over 9.71% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in DHI, holding 20,947,359 shares or 6.03% stake. With a 4.09% stake in DHI, the American Funds Growth Fund of Ame is the largest stakeholder. A total of 14,200,613 shares are owned by the mutual fund manager. The American Balanced Fund, which owns about 3.14% of DHI stock, is the second-largest Mutual Fund holder. It holds 10,900,068 shares valued at 775.54 million. Vanguard Total Stock Market Index holds 2.70% of the stake in DHI, owning 9,378,625 shares worth 667.29 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2022, DHI reported revenue of $8.79B and operating income of $2.17B. It generated $1.65B net income for the quarter, which came to $5.56B over the last twelve months. The EBITDA in the recently reported quarter was $2.19B and diluted EPS was $4.67. EBITDA for the full year was $7.31B.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for DHI since 21 analysts follow the stock currently. There are 13 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 5 believe that the stock is worth HOLDING, 3 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With DHI analysts setting a high price target of $120.00 and a low target of $70.00, the average target price over the next 12 months is $89.94. Based on these targets, DHI could surge 68.21% to reach the target high and fall by -1.88% to reach the target low. Reaching the average price target will result in a growth of 26.07% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. DHI will report FY 2022 earnings on 11/09/2022. Analysts have provided yearly estimates in a range of $17.42 being high and $16.82 being low. For DHI, this leads to a yearly average estimate of $17.07. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. D.R. Horton Inc. surprised analysts by $0.18 when it reported $4.67 EPS against a consensus estimate of $4.49. The surprise factor in the prior quarter was $0.65. Based on analyst estimates, the high estimate for the next quarter is $5.58 and the low estimate is $4.99. The average estimate for the next quarter is thus $5.23.

Summary of Insider Activity:

Insiders traded DHI stock several times over the past three months with 0 Buys and 2 Sells. In these transactions, 0 shares were bought while 9,000 shares were sold. The number of buy transactions has increased to 70 while that of sell transactions has risen to 54 over the past year. The total number of shares bought during that period was 1,388,681 while 682,971 shares were sold.

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