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Dream Finders Homes (DFH) Surges 7.0%: Is This an Indication of Further Gains?

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Dream Finders Homes Inc. (DFH - Free Report) shares soared 7% in the last trading session to close at $37.86. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 10.7% gain over the past four weeks.

DFH's land-light operating model and strategic position in high-growth markets, providing affordable homes to entry-level, first and second-time move-up homebuyers, bode well. Also, the build-for-rent platform provides a consistent home deliveries pipeline, which is less susceptible to temporary changes in demand from individual homebuyers. Despite high interest rate conditions, the company has consistently achieved strong outcomes, showcasing its proficiency in driving sales and effectively executing its growth strategy. The emphasis remains on efficiently managing construction timelines and enhancing inventory turnover.

This homebuilder is expected to post quarterly earnings of $0.67 per share in its upcoming report, which represents a year-over-year change of -14.1%. Revenues are expected to be $835.1 million, down 24.1% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Dream Finders Homes, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on DFH going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Dream Finders Homes belongs to the Zacks Building Products - Home Builders industry. Another stock from the same industry, Lennar (LEN - Free Report) , closed the last trading session 0.6% lower at $154.13. Over the past month, LEN has returned 4.5%.

For Lennar, the consensus EPS estimate for the upcoming report has changed -0.1% over the past month to $2.21. This represents a change of +4.3% from what the company reported a year ago. Lennar currently has a Zacks Rank of #3 (Hold).


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