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Why Is D.R. Horton (DHI) Down 4% Since Last Earnings Report?
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A month has gone by since the last earnings report for D.R. Horton (DHI - Free Report) . Shares have lost about 4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is D.R. Horton due for a breakout? 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, Inc. reported fourth-quarter fiscal 2020 results, wherein earnings and revenues handily beat the respective Zacks Consensus Estimate. The homebuilder increased quarterly cash dividend by 14% to 20 cents per share.
Chairman Donald R. Horton said, "With 38,000 homes in inventory, an ample supply of lots and continued strong sales trends in October, we are well-positioned for another great year in fiscal 2021."
Earnings & Revenue Discussion
D.R. Horton reported quarterly adjusted earnings of $2.24 per share, which surpassed the Zacks Consensus Estimate of $1.76 by 27.3% and increased 65.9% from the year-ago period.
Total revenues (Homebuilding, Forestar and Financial Services) came in at $6.4 billion, up 27% year over year. The reported figure beat the consensus mark by 8.8%.
Home Closings and Orders
Homebuilding revenues of $6.16 billion increased 27.2% from the prior-year quarter. Home sales also increased 27.7% year over year to $6.13 billion, aided by higher home deliveries. However, land/lot sales and other revenues were $33.4 million, down from $42.8 million a year ago.
Home closings increased 26% from the prior-year quarter to 20,248 homes and 28% in value to $6.1 billion. It recorded growth across all regions, namely East, Midwest, Southeast, and South Central, Southwest and West.
Quarterly net sales orders increased 81% year over year to 23,726 homes. It registered growth in all geographic regions served. Value of net orders also improved 84% year over year to $7.3 billion. The cancellation rate was 19%, lower than 23% a year ago.
Order backlog of homes at quarter-end was 26,683 homes, up 96% year over year. The value of backlog was also up 98% from the prior year to $8.2 billion.
Revenues from the Financial Services segment increased 63.4% from the year-ago level to $220.9 million.
Forestar contributed $347.6 million to its total quarterly revenues, reflecting a notable improvement from $236.3 million a year ago.
Margins
The company’s consolidated pre-tax margin expanded 440 bps to 16.5%.
Balance Sheet Details
D.R. Horton’s cash, cash equivalents and restricted cash totaled $3.02 billion as of Sep 30, 2020 compared with $1.49 billion at fiscal 2019-end.
At fiscal 2020-end, it had $2.6 billion of unrestricted homebuilding cash and $1.8 billion of available capacity. Total homebuilding liquidity was $4.4 billion.
As of Sep 30, 2020, homebuilding debt totaled $2.5 billion, with $400 million of senior note maturities in fiscal 2021.
As of Sep 30, 2020, its homebuilding debt to total capital was 17.5%. The trailing 12-month return on equity was 22.1%.
D.R. Horton repurchased 7 million shares of common stock for $360.4 million during fiscal 2020. The company’s remaining stock repurchase authorization — which has no expiration date — as of Sep 30, 2020 was $535.3 million.
Fiscal 2020 Highlights
Total revenues increased 15% from a year ago to $20.3 billion. Earnings grew 47% year over year to $6.41 per share. Homes closed rose 15% to 65,388 homes and 16% in value to $19.6 billion.
Fiscal 2021 Guidance
Total revenues are expected in the range of $24-25 billion. Homes closed are expected within 77,000-80,000 units. Income tax rate is anticipated to be 24%.
Q1 View
It expects to generate consolidated revenues of $5.4-$5.6 billion, and homes closed between 17,500 and 18,000 homes.
The company expects home sales gross margin for the fiscal first quarter to be 23% and homebuilding SG&A to be 8.9% of homebuilding revenues.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 13.12% due to these changes.
VGM Scores
Currently, D.R. Horton has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, D.R. Horton has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is D.R. Horton (DHI) Down 4% Since Last Earnings Report?
A month has gone by since the last earnings report for D.R. Horton (DHI - Free Report) . Shares have lost about 4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is D.R. Horton due for a breakout? 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 (DHI - Free Report) Q4 Earnings & Revenues Beat Estimates
D.R. Horton, Inc. reported fourth-quarter fiscal 2020 results, wherein earnings and revenues handily beat the respective Zacks Consensus Estimate. The homebuilder increased quarterly cash dividend by 14% to 20 cents per share.
Chairman Donald R. Horton said, "With 38,000 homes in inventory, an ample supply of lots and continued strong sales trends in October, we are well-positioned for another great year in fiscal 2021."
Earnings & Revenue Discussion
D.R. Horton reported quarterly adjusted earnings of $2.24 per share, which surpassed the Zacks Consensus Estimate of $1.76 by 27.3% and increased 65.9% from the year-ago period.
Total revenues (Homebuilding, Forestar and Financial Services) came in at $6.4 billion, up 27% year over year. The reported figure beat the consensus mark by 8.8%.
Home Closings and Orders
Homebuilding revenues of $6.16 billion increased 27.2% from the prior-year quarter. Home sales also increased 27.7% year over year to $6.13 billion, aided by higher home deliveries. However, land/lot sales and other revenues were $33.4 million, down from $42.8 million a year ago.
Home closings increased 26% from the prior-year quarter to 20,248 homes and 28% in value to $6.1 billion. It recorded growth across all regions, namely East, Midwest, Southeast, and South Central, Southwest and West.
Quarterly net sales orders increased 81% year over year to 23,726 homes. It registered growth in all geographic regions served. Value of net orders also improved 84% year over year to $7.3 billion. The cancellation rate was 19%, lower than 23% a year ago.
Order backlog of homes at quarter-end was 26,683 homes, up 96% year over year. The value of backlog was also up 98% from the prior year to $8.2 billion.
Revenues from the Financial Services segment increased 63.4% from the year-ago level to $220.9 million.
Forestar contributed $347.6 million to its total quarterly revenues, reflecting a notable improvement from $236.3 million a year ago.
Margins
The company’s consolidated pre-tax margin expanded 440 bps to 16.5%.
Balance Sheet Details
D.R. Horton’s cash, cash equivalents and restricted cash totaled $3.02 billion as of Sep 30, 2020 compared with $1.49 billion at fiscal 2019-end.
At fiscal 2020-end, it had $2.6 billion of unrestricted homebuilding cash and $1.8 billion of available capacity. Total homebuilding liquidity was $4.4 billion.
As of Sep 30, 2020, homebuilding debt totaled $2.5 billion, with $400 million of senior note maturities in fiscal 2021.
As of Sep 30, 2020, its homebuilding debt to total capital was 17.5%. The trailing 12-month return on equity was 22.1%.
D.R. Horton repurchased 7 million shares of common stock for $360.4 million during fiscal 2020. The company’s remaining stock repurchase authorization — which has no expiration date — as of Sep 30, 2020 was $535.3 million.
Fiscal 2020 Highlights
Total revenues increased 15% from a year ago to $20.3 billion. Earnings grew 47% year over year to $6.41 per share. Homes closed rose 15% to 65,388 homes and 16% in value to $19.6 billion.
Fiscal 2021 Guidance
Total revenues are expected in the range of $24-25 billion. Homes closed are expected within 77,000-80,000 units. Income tax rate is anticipated to be 24%.
Q1 View
It expects to generate consolidated revenues of $5.4-$5.6 billion, and homes closed between 17,500 and 18,000 homes.
The company expects home sales gross margin for the fiscal first quarter to be 23% and homebuilding SG&A to be 8.9% of homebuilding revenues.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 13.12% due to these changes.
VGM Scores
Currently, D.R. Horton has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, D.R. Horton has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.