Value
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.8 |
| P/S | 9.4 |
| EV/EBITDA | 4.5 |
| Fwd P/E | 8.4 |
| PEG | 5.4 |
| Analyst target | 3.0 |
- ▸Forward P/E: 13.8x
- ▸PEG: 1.39
DHI · Why this verdict
Why D.R. Horton (DHI) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score4.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
D.R. Horton concentrates roughly 92% of its revenue in homebuilding and channels approximately 71% of its mortgage originations through Fannie Mae, Freddie Mac, and Ginnie Mae, creating layered concentration risk that could amplify a housing-cycle downturn; revenue is already in modest decline, the stock trades within 1.3% of near-term resistance, and the risk/reward is unfavorable despite an undemanding forward valuation.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Approximately 71% of the company's mortgage originations flow through Fannie Mae, Freddie Mac, and Ginnie Mae, concentrating the business on a single set of government-sponsored buyers and exposing it materially to any shift in their purchasing mandates or credit standards. Bear case | GSE purchase concentration falls below 60% of total mortgage volume within 4 quarters as private-label or portfolio channels expand. | →Stable |
| CounterGovernment-sponsored enterprise participation provides a stable, liquid bid for mortgages across market cycles; the concentration that looks like risk in a stress scenario is also the pricing certainty that allows the company to compete effectively on home sales. | ||
Homebuilding accounts for roughly 92% of revenue, leaving the company almost entirely exposed to residential construction demand with little diversification into adjacent businesses that could buffer a housing downturn. Bear case | Non-homebuilding revenue grows to represent more than 15% of total revenue within 4 quarters. | →Stable |
| CounterDeep focus on a single business can drive superior execution; the company has retained an industry growth leader ranking despite the concentration, suggesting the narrow focus has not impaired its competitive position. | ||
Revenue declined approximately 2% year-over-year in the most recent period, suggesting that demand or pricing headwinds are beginning to crimp the top line before any full cyclical downturn has materialized. Growth breakdown | Revenue growth turns positive above 5% year-over-year for 2 consecutive quarters. | →Stable |
| CounterA 2% revenue dip may reflect deliberate inventory or community-count management rather than demand weakness; the company retained its industry growth leader peer ranking despite the modest decline. | ||
The stock trades within 1.3% of its near-term resistance target with an unfavorable risk/reward profile, offering minimal reward against the concentration and cycle risks that characterize this business at current levels. Price targets | Price breaks and sustains above $160 for more than 10 consecutive trading days, opening meaningful technical headroom. | →Stable |
| CounterA forward price-to-earnings multiple of 12.9 times and a price-to-earnings-to-growth ratio of 1.29 are genuinely undemanding for a residential construction leader; a valuation re-rating could drive the stock well above the current resistance level. | ||
Approximately 71% of the company's mortgage originations flow through Fannie Mae, Freddie Mac, and Ginnie Mae, concentrating the business on a single set of government-sponsored buyers and exposing it materially to any shift in their purchasing mandates or credit standards.
→StableBear case
- Expectation
- GSE purchase concentration falls below 60% of total mortgage volume within 4 quarters as private-label or portfolio channels expand.
CounterGovernment-sponsored enterprise participation provides a stable, liquid bid for mortgages across market cycles; the concentration that looks like risk in a stress scenario is also the pricing certainty that allows the company to compete effectively on home sales.
Homebuilding accounts for roughly 92% of revenue, leaving the company almost entirely exposed to residential construction demand with little diversification into adjacent businesses that could buffer a housing downturn.
→StableBear case
- Expectation
- Non-homebuilding revenue grows to represent more than 15% of total revenue within 4 quarters.
CounterDeep focus on a single business can drive superior execution; the company has retained an industry growth leader ranking despite the concentration, suggesting the narrow focus has not impaired its competitive position.
Revenue declined approximately 2% year-over-year in the most recent period, suggesting that demand or pricing headwinds are beginning to crimp the top line before any full cyclical downturn has materialized.
→StableGrowth breakdown
- Expectation
- Revenue growth turns positive above 5% year-over-year for 2 consecutive quarters.
CounterA 2% revenue dip may reflect deliberate inventory or community-count management rather than demand weakness; the company retained its industry growth leader peer ranking despite the modest decline.
The stock trades within 1.3% of its near-term resistance target with an unfavorable risk/reward profile, offering minimal reward against the concentration and cycle risks that characterize this business at current levels.
→StablePrice targets
- Expectation
- Price breaks and sustains above $160 for more than 10 consecutive trading days, opening meaningful technical headroom.
CounterA forward price-to-earnings multiple of 12.9 times and a price-to-earnings-to-growth ratio of 1.29 are genuinely undemanding for a residential construction leader; a valuation re-rating could drive the stock well above the current resistance level.
Per-dimension breakdown
Quality
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.4 |
| ROA | 4.9 |
| Gross margin | 0.3 |
| Op margin | 4.5 |
| Net margin | 4.8 |
| Current ratio | 6.6 |
| FCF quality | 6.5 |
| Moat | 5.1 |
| Piotroski F | 6.7 |
- ▸No competitive moat
Growth
0.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.9 |
| EPS growth | 0.0 |
- ▸Declining revenue: -2%
Momentum
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.3 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 74)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.4 |
| Analyst rating | 5.0 |
| Price target | 4.9 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.4 |
| quality rank | 5.9 |
| growth rank | 8.1 |
- ▸Industry growth leader
Technical
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.7 |
| 52w position | 8.5 |
| gap | 5.0 |
Risk (lower is worse)
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.0 |
| days to cover | 5.1 |
| volatility | 4.1 |
| put call | 8.6 |
| implied vol | 4.7 |
| max pain risk | 3.0 |
| beta | 5.5 |
| debt equity | 8.9 |
- ▸Above max pain $85
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 5.0 |
| dividend safety | 7.0 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 108.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +2 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+2Passed (7)
- MOMENTUM:6.5>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.9=NEGATIVE
Warning (1)
- DEATH_CROSS:momentum=6.5>=5.0 recovering
Reward-to-Risk
-0.89
Upside
-13.4%
Downside
15.0%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 74
EdgeCATALYST — Earnings in 26d with 3/4 beat streak
SuitabilityAGGRESSIVE — Beta 1.38>1.3
Investment implication
The F-path SELL output reflects an overall score of 4.7 below the 5.4 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Momentum at 6.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.9=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.89 — supplementary context, not the trigger for this path.
The strongest dimensions are Momentum at 6.5, Value at 6.3, and Catalyst at 6.1; the weakest are Growth at 0.9, Technical at 3.5, and Peer rank at 4.4. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.89 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Approximately 71% of the company's mortgage originations flow through Fannie Mae, Freddie Mac, and Ginnie Mae, concentrating the business on a single set of government-sponsored buyers and exposing it materially to any shift in their purchasing mandates or credit standards.
Trip ifGSE purchase concentration falls below 60% of total mortgage volume for 2 consecutive quarters.
- P2Homebuilding accounts for roughly 92% of revenue, leaving the company almost entirely exposed to residential construction demand with little diversification into adjacent businesses that could buffer a housing downturn.
Trip ifNon-homebuilding revenue grows above 15% of total revenue for 2 consecutive quarters.
- P3Revenue declined approximately 2% year-over-year in the most recent period, suggesting that demand or pricing headwinds are beginning to crimp the top line before any full cyclical downturn has materialized.
Trip ifRevenue growth exceeds 5% year-over-year for 2 consecutive quarters.
- P4The stock trades within 1.3% of its near-term resistance target with an unfavorable risk/reward profile, offering minimal reward against the concentration and cycle risks that characterize this business at current levels.
Trip ifStock price breaks and closes above $160 for more than 10 consecutive trading days.