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Saturday, October 24, 2020

D.R. Horton Inc. (NYSE:DHI) is Waving the Bull Flag

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D.R. Horton Inc. (DHI) shares are trading at higher $78.09 and the avg recommendation for the stock is Moderate Buy, while the current analyst price target stands at $78.59.

To add more color to this target, the company’s high over the last year is $78.78 and the low is $25.51. Over the last 52 weeks, DHI is up 48.74% while the S&P 500 is up 18.28%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, DHI reported a profit of $1.31 billion. D.R. Horton Inc. also saw revenues increase to $5.39 billion. In addition, DHI has free cash flow of $368.5 million as of 06-2020. The company’s EBITDA came in at $798.4 million which compares well with its peers.

DHI booked profit margins of 10.80%, its Return on Equity (ROE) is 19.60%, and its Return on Assets is 12.20%. All told, it is clear that, DHI needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. DHI has a short ratio of 1.46 and outstanding shares of 363.80M.

Company Outlook

DHI has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 2.8 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 5.52. D.R. Horton Inc. DHI also noted assets of $17.97 billion at the end of the last quarter. Investors should also keep an eye on sector updates as DHI has historically followed its peers on positive news.

All told, D.R. Horton Inc. DHI has strung together solid data and demonstrated underlying fundamentals. At its current valuation, DHI represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

D.R. Horton Inc. DHI is now commanding a market cap of 28.26B and a float of 332.77M. DHI is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of DHI stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in DHI, either long or short, and we have not been compensated for this article.

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