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Why Is D.R. Horton (DHI) Down 1.9% Since Last Earnings Report?
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It has been about a month since the last earnings report for D.R. Horton (DHI - Free Report) . Shares have lost about 1.9% in that time frame, outperforming 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 impressive results for first-quarter fiscal 2022. The company’s quarterly earnings and revenues beat the respective Zacks Consensus Estimate and improved on a year-over-year basis. The upside reflects a robust housing market, significant market share gains, a vast geographic footprint and varied product offerings across multiple brands.
Pertaining to fiscal first-quarter results, Donald R. Horton, the chairman of the board, said, "These results reflect our experienced teams and production capabilities, industry-leading market share, broad geographic footprint and diverse product offerings across multiple brands.”
Earnings & Revenue Discussion
The company reported adjusted earnings of $3.17 per share for the quarter, surpassing the Zacks Consensus Estimate of $2.80 by 13.2% and increasing a whopping 48.1% from the year-ago period.
Total revenues (Homebuilding, Forestar, Rental and Financial Services) came in at $7.05 billion, up 18.9% year over year. The reported figure surpassed the consensus mark of $6.75 billion.
Segment Details
Homebuilding revenues of $6.68 billion increased 16.8% from the prior-year quarter. The upside was led by higher pricing.
Home closings dropped 2% from the prior-year quarter to 18,396 homes but homes closed increased 17% in value to $6.7 billion.
Net sales orders grew 5% year over year to 21,522 homes. Also, the value of net orders advanced 29% year over year to $8.3 billion. The cancellation rate was 15%, down from 18% a year ago.
Order backlog of homes at quarter-end was 29,347 homes, up 3% year over year. Nonetheless, the value of the backlog was up 24% from the prior year to $11.1 billion.
Financial Services’ revenues decreased 2% from the year-ago level to $184.3 million.
Forestar contributed $407.6 million to total quarterly revenues, reflecting an improvement from $307.1 million a year ago.
The Rental business generated revenues of $156.5 million for the quarter.
Margins
Consolidated pre-tax margin expanded 380 bps to 21.2% for the quarter.
Balance Sheet Details
D.R. Horton’s cash, cash equivalents and restricted cash totaled $2.46 billion as of Dec 31, 2021 compared with $3.24 billion at fiscal 2021-end. At fiscal first quarter-end, it had $2 billion of available capacity on the revolving credit facility. Total homebuilding liquidity was $4.1 billion.
At fiscal first quarter-end, DHI had 54,800 homes in inventory, of which 25,600 were unsold. D.R. Horton’s homebuilding land and lot portfolio totaled 551,400 lots at fiscal first quarter-end. Of these, 24% were owned, and 76% were controlled through land and lot purchase contracts.
At December-end, homebuilding debt totaled $3.3 billion, with homebuilding debt to total capital of 17.3%. The trailing 12-month return on equity was 32.4%.
D.R. Horton repurchased 2.7 million shares of common stock for $278.2 million during the fiscal first quarter. The company’s remaining stock repurchase authorization as of Dec 31, 2021 was $268 million.
Q2 Guidance
Total revenues are expected in the range of $7.3-$7.7 billion. Meanwhile, homes closed are anticipated within 19,000-20,000 units. Home sales gross margin and homebuilding SG&A are expected to be 27.5% and 7.5%, respectively. The income tax rate is expected to be 24%. The company also expects financial services pre???tax profit margin in a range of 30% to 35%.
Fiscal 2022 Guidance Updated
Total revenues are now expected in the range of $34.5-$35.5 billion versus $32.5-$33.5 billion projected earlier. Meanwhile, DHI reaffirmed expectations for other metrics. Homes closed are anticipated within 90,000-92,000 units. The income tax rate is expected to be 24%. The company also expects shares outstanding to be 2% lower than fiscal 2021-end.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, D.R. Horton has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. It comes with little surprise D.R. Horton has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is D.R. Horton (DHI) Down 1.9% Since Last Earnings Report?
It has been about a month since the last earnings report for D.R. Horton (DHI - Free Report) . Shares have lost about 1.9% in that time frame, outperforming 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) Q1 Earnings & Revenues Beat
D.R. Horton, Inc. reported impressive results for first-quarter fiscal 2022. The company’s quarterly earnings and revenues beat the respective Zacks Consensus Estimate and improved on a year-over-year basis. The upside reflects a robust housing market, significant market share gains, a vast geographic footprint and varied product offerings across multiple brands.
Pertaining to fiscal first-quarter results, Donald R. Horton, the chairman of the board, said, "These results reflect our experienced teams and production capabilities, industry-leading market share, broad geographic footprint and diverse product offerings across multiple brands.”
Earnings & Revenue Discussion
The company reported adjusted earnings of $3.17 per share for the quarter, surpassing the Zacks Consensus Estimate of $2.80 by 13.2% and increasing a whopping 48.1% from the year-ago period.
Total revenues (Homebuilding, Forestar, Rental and Financial Services) came in at $7.05 billion, up 18.9% year over year. The reported figure surpassed the consensus mark of $6.75 billion.
Segment Details
Homebuilding revenues of $6.68 billion increased 16.8% from the prior-year quarter. The upside was led by higher pricing.
Home closings dropped 2% from the prior-year quarter to 18,396 homes but homes closed increased 17% in value to $6.7 billion.
Net sales orders grew 5% year over year to 21,522 homes. Also, the value of net orders advanced 29% year over year to $8.3 billion. The cancellation rate was 15%, down from 18% a year ago.
Order backlog of homes at quarter-end was 29,347 homes, up 3% year over year. Nonetheless, the value of the backlog was up 24% from the prior year to $11.1 billion.
Financial Services’ revenues decreased 2% from the year-ago level to $184.3 million.
Forestar contributed $407.6 million to total quarterly revenues, reflecting an improvement from $307.1 million a year ago.
The Rental business generated revenues of $156.5 million for the quarter.
Margins
Consolidated pre-tax margin expanded 380 bps to 21.2% for the quarter.
Balance Sheet Details
D.R. Horton’s cash, cash equivalents and restricted cash totaled $2.46 billion as of Dec 31, 2021 compared with $3.24 billion at fiscal 2021-end. At fiscal first quarter-end, it had $2 billion of available capacity on the revolving credit facility. Total homebuilding liquidity was $4.1 billion.
At fiscal first quarter-end, DHI had 54,800 homes in inventory, of which 25,600 were unsold. D.R. Horton’s homebuilding land and lot portfolio totaled 551,400 lots at fiscal first quarter-end. Of these, 24% were owned, and 76% were controlled through land and lot purchase contracts.
At December-end, homebuilding debt totaled $3.3 billion, with homebuilding debt to total capital of 17.3%. The trailing 12-month return on equity was 32.4%.
D.R. Horton repurchased 2.7 million shares of common stock for $278.2 million during the fiscal first quarter. The company’s remaining stock repurchase authorization as of Dec 31, 2021 was $268 million.
Q2 Guidance
Total revenues are expected in the range of $7.3-$7.7 billion. Meanwhile, homes closed are anticipated within 19,000-20,000 units. Home sales gross margin and homebuilding SG&A are expected to be 27.5% and 7.5%, respectively. The income tax rate is expected to be 24%. The company also expects financial services pre???tax profit margin in a range of 30% to 35%.
Fiscal 2022 Guidance Updated
Total revenues are now expected in the range of $34.5-$35.5 billion versus $32.5-$33.5 billion projected earlier. Meanwhile, DHI reaffirmed expectations for other metrics. Homes closed are anticipated within 90,000-92,000 units. The income tax rate is expected to be 24%. The company also expects shares outstanding to be 2% lower than fiscal 2021-end.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, D.R. Horton has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. It comes with little surprise D.R. Horton has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.