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In the last quarter, the company’s earnings and revenues beat the Zacks Consensus Estimates by 7% and 0.5%, respectively. On a year-over-year basis, earnings declined 4.8%, while revenues increased marginally.
Markedly, D.R. Horton reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 1.9%.
How Are Estimates Placed for D.R. Horton Stock?
The Zacks Consensus Estimate for the quarter’s earnings per share (EPS) has been unchanged at $3.03 over the past 30 days. The estimated figure indicates a decline of 0.3% from the year-ago reported EPS of $3.04.
The consensus mark for revenues is $9.04 billion, indicating a 6.6% year-over-year decline.
Factors Likely to Shape DHI’s Q4 Results
Revenues
D.R. Horton’s fourth-quarter fiscal 2026 revenues are expected to have declined year over year, reflecting continued pressure on housing demand and affordability. Elevated mortgage rates, higher homeownership costs and cautious consumer sentiment are likely to have weighed on home sales. The company expects sales incentives to have remained elevated during the quarter, with incentive levels depending on demand, mortgage rates and broader market conditions. These incentives might have helped support sales but could limit revenue growth.
Elevated sales incentives and affordability-focused pricing are also likely to have continued pressuring average selling prices (ASPs), limiting revenue growth despite its efforts to support demand. The company’s broad geographic footprint and focus on entry-level homes might have helped it respond to local market conditions, but affordability constraints remain a key challenge.
For the fourth quarter of fiscal 2026, D.R. Horton expects consolidated revenues of $8.8 billion to $9.3 billion and homebuilding closings of 22,500 to 23,000 homes. These targets reflect the company’s expectations under current market conditions. Affordability constraints and elevated incentives are likely to have remained key factors affecting performance.
Under the Homebuilding segment (which contributed 92% to the fiscal 2025 total revenues), the Zacks Consensus Estimate for DHI’s home sales is pegged at $8.26 billion for the fiscal fourth quarter, indicating a fall from the $8.54 billion reported a year ago. The consensus mark for the ASPs for homes delivered is expected to be $364,000.
Rental Property revenues (which contributed 4.8% to the total revenues in fiscal 2025) are expected to be $453 million, which implies a decline from the year-ago reported level of $805 million.
Conversely, Forestar revenues (which contributed 4.9% to the total revenues in fiscal 2025) are likely to be $624 million, which indicates a decline from the year-ago reported level of $671 million. The Financial Services segment’s revenues (which contributed 2.5% to the total revenues in fiscal 2025) are expected to be $212 million, which indicates a decline from the year-ago reported level of $218 million.
Margins & Bottom Line
D.R. Horton’s earnings are expected to have declined year over year, with profitability likely to have remained under pressure from elevated sales incentives and pricing pressure. However, lower construction costs and improved construction efficiency might have partly offset these pressures. The company expects fiscal fourth-quarter home sales gross margin to range from 20.5% to 21%, indicating relatively stable margins sequentially.
Lower revenues and persistent pricing pressure are also likely to have weighed on operating leverage. Homebuilding SG&A expenses might have remained high relative to revenues if sales growth and average selling prices do not improve.
For the fiscal fourth quarter, D.R. Horton expects a consolidated pretax profit margin of 12.3% to 12.8%.
Orders & Backlog
For the fiscal fourth quarter, the consensus estimate suggests that net sales orders will decline 1% year over year to 19,874 units. The same for backlog is pegged at 13,095 units, which indicates 21.4% growth from that recorded a year ago. The value of the backlog is expected to be $5.02 billion, implying growth from the $4.12 billion reported a year ago.
What the Zacks Model Unveils for DHI
Our proven model does not conclusively predict an earnings beat for D.R. Horton this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.
Earnings ESP: DHI has an Earnings ESP of +0.15% at present. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank of 4 (Sell).
Stocks to Consider
Here are some companies in the Zacks Construction sector, which, according to our model, have the right combination of elements to post an earnings beat.
With the average surprise being 44.2%, Argan’s earnings beat estimates in each of the past four quarters. Argan’s is expected to register a 53.9% increase in earnings for the to-be-reported quarter.
Sterling Infrastructure, Inc. (STRL - Free Report) currently has an Earnings ESP of +0.80% and a Zacks Rank of 2.
With the average surprise being 27.2%, Sterling’s earnings beat estimates in each of the last four quarters. Sterling is expected to register a 74.4% increase in earnings for the to-be-reported quarter.
Quanta Services (PWR - Free Report) has an Earnings ESP of +2.66% and a Zacks Rank of 3.
With the average surprise being 17%, Quanta Services’ earnings beat estimates in each of the last four quarters. Quanta Services is expected to register a 50.5% increase in earnings for the to-be-reported quarter.
View the Zacks #1 Rank List
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D.R. Horton's Q4 Earnings Preview: What Investors Must Know Now?
Key Takeaways
D.R. Horton Inc. (DHI - Free Report) is slated to report results for the fourth quarter of fiscal 2026 (ended Sept. 30) on Oct. 29, before the opening bell.
In the last quarter, the company’s earnings and revenues beat the Zacks Consensus Estimates by 7% and 0.5%, respectively. On a year-over-year basis, earnings declined 4.8%, while revenues increased marginally.
Markedly, D.R. Horton reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 1.9%.
How Are Estimates Placed for D.R. Horton Stock?
The Zacks Consensus Estimate for the quarter’s earnings per share (EPS) has been unchanged at $3.03 over the past 30 days. The estimated figure indicates a decline of 0.3% from the year-ago reported EPS of $3.04.
D.R. Horton, Inc. Price and EPS Surprise
D.R. Horton, Inc. price-eps-surprise | D.R. Horton, Inc. Quote
The consensus mark for revenues is $9.04 billion, indicating a 6.6% year-over-year decline.
Factors Likely to Shape DHI’s Q4 Results
Revenues
D.R. Horton’s fourth-quarter fiscal 2026 revenues are expected to have declined year over year, reflecting continued pressure on housing demand and affordability. Elevated mortgage rates, higher homeownership costs and cautious consumer sentiment are likely to have weighed on home sales. The company expects sales incentives to have remained elevated during the quarter, with incentive levels depending on demand, mortgage rates and broader market conditions. These incentives might have helped support sales but could limit revenue growth.
Elevated sales incentives and affordability-focused pricing are also likely to have continued pressuring average selling prices (ASPs), limiting revenue growth despite its efforts to support demand. The company’s broad geographic footprint and focus on entry-level homes might have helped it respond to local market conditions, but affordability constraints remain a key challenge.
For the fourth quarter of fiscal 2026, D.R. Horton expects consolidated revenues of $8.8 billion to $9.3 billion and homebuilding closings of 22,500 to 23,000 homes. These targets reflect the company’s expectations under current market conditions. Affordability constraints and elevated incentives are likely to have remained key factors affecting performance.
Under the Homebuilding segment (which contributed 92% to the fiscal 2025 total revenues), the Zacks Consensus Estimate for DHI’s home sales is pegged at $8.26 billion for the fiscal fourth quarter, indicating a fall from the $8.54 billion reported a year ago. The consensus mark for the ASPs for homes delivered is expected to be $364,000.
Rental Property revenues (which contributed 4.8% to the total revenues in fiscal 2025) are expected to be $453 million, which implies a decline from the year-ago reported level of $805 million.
Conversely, Forestar revenues (which contributed 4.9% to the total revenues in fiscal 2025) are likely to be $624 million, which indicates a decline from the year-ago reported level of $671 million. The Financial Services segment’s revenues (which contributed 2.5% to the total revenues in fiscal 2025) are expected to be $212 million, which indicates a decline from the year-ago reported level of $218 million.
Margins & Bottom Line
D.R. Horton’s earnings are expected to have declined year over year, with profitability likely to have remained under pressure from elevated sales incentives and pricing pressure. However, lower construction costs and improved construction efficiency might have partly offset these pressures. The company expects fiscal fourth-quarter home sales gross margin to range from 20.5% to 21%, indicating relatively stable margins sequentially.
Lower revenues and persistent pricing pressure are also likely to have weighed on operating leverage. Homebuilding SG&A expenses might have remained high relative to revenues if sales growth and average selling prices do not improve.
For the fiscal fourth quarter, D.R. Horton expects a consolidated pretax profit margin of 12.3% to 12.8%.
Orders & Backlog
For the fiscal fourth quarter, the consensus estimate suggests that net sales orders will decline 1% year over year to 19,874 units. The same for backlog is pegged at 13,095 units, which indicates 21.4% growth from that recorded a year ago. The value of the backlog is expected to be $5.02 billion, implying growth from the $4.12 billion reported a year ago.
What the Zacks Model Unveils for DHI
Our proven model does not conclusively predict an earnings beat for D.R. Horton this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.
Earnings ESP: DHI has an Earnings ESP of +0.15% at present. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank of 4 (Sell).
Stocks to Consider
Here are some companies in the Zacks Construction sector, which, according to our model, have the right combination of elements to post an earnings beat.
Argan, Inc. (AGX - Free Report) has an Earnings ESP of +4.79% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
With the average surprise being 44.2%, Argan’s earnings beat estimates in each of the past four quarters. Argan’s is expected to register a 53.9% increase in earnings for the to-be-reported quarter.
Sterling Infrastructure, Inc. (STRL - Free Report) currently has an Earnings ESP of +0.80% and a Zacks Rank of 2.
With the average surprise being 27.2%, Sterling’s earnings beat estimates in each of the last four quarters. Sterling is expected to register a 74.4% increase in earnings for the to-be-reported quarter.
Quanta Services (PWR - Free Report) has an Earnings ESP of +2.66% and a Zacks Rank of 3.
With the average surprise being 17%, Quanta Services’ earnings beat estimates in each of the last four quarters. Quanta Services is expected to register a 50.5% increase in earnings for the to-be-reported quarter.