Value
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.2 |
| P/S | 9.5 |
| EV/EBITDA | 5.2 |
| Fwd P/E | 8.9 |
| PEG | 6.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 12.4x
- ▸PEG: 1.25
- ▸Attractively valued
DHI · Why this verdict
Why D.R. Horton (DHI) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score5.2/10
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. | ↓Deteriorating |
| 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. | ↓Deteriorating |
| 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. | ↑Improving |
| 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.
↓DeterioratingBear 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.
↓DeterioratingBear 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.
↑ImprovingPrice 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
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 10.0 |
| vol acceleration | 3.0 |
- ▸Capitulation risk (RSI 26, below 200MA)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -1.5%/30d — confirmed downtrend
- ▸Volume surge (2.0x avg) on selloff
Sentiment
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 5.0 |
| Price target | 7.2 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.0 |
| quality rank | 6.3 |
| growth rank | 8.4 |
- ▸Industry growth leader
Technical
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.1 |
| support resistance | 9.7 |
| 52w position | 5.8 |
Risk (lower is worse)
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.4 |
| days to cover | 5.6 |
| volatility | 3.6 |
| put call | 4.6 |
| implied vol | 2.1 |
| beta | 5.6 |
| debt equity | 8.9 |
- ▸High IV: 68%
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 5.0 |
| dividend safety | 8.5 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 1 days
- ▸Dividend aristocrat: 1.2% yield
How the verdict was assembled
Engine trigger
Earnings in 1 day. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|ENTRY_STICKY:WITHIN_BANDPassed (4)
- INSIDER:OK
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (4)
- MOMENTUM:3.0<4.5
- ASYMMETRY:0.1<1.5@spot
- DEATH_CROSS:HARD_BLOCK
- EARNINGS_PROXIMITY:1d<=7d
Warning (0)
none
Reward-to-Risk
0.13
Upside
+0.9%
Downside
7.1%
Sizing output
STARTER
SetupOversold Bounce — Oversold RSI 26, near Bollinger lower, volume surge
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.36>1.3
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings in 1 day. Wait until post-earnings. The 10-dimension scores remain Technical at 8.2 (strongest), but MOMENTUM:3.0<4.5 also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Technical at 8.2, Insider at 7.3, and Value at 7.0; the weakest are Growth at 0.9, Momentum at 3.0, and Quality at 4.9. The V9 engine flagged 4 failed gates, producing an asymmetric reward-to-risk of 0.13 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Gse Customer Concentration
Trip ifGSE purchase concentration falls below 60% of total mortgage volume for 2 consecutive quarters.
- P2Homebuilding Product Concentration
Trip ifNon-homebuilding revenue grows above 15% of total revenue for 2 consecutive quarters.
- P3Revenue In Modest Decline
Trip ifRevenue growth exceeds 5% year-over-year for 2 consecutive quarters.
- P4Limited Upside At Resistance
Trip ifStock price breaks and closes above $160 for more than 10 consecutive trading days.