Why D.R. Horton (DHI) Outpaced the Stock Market Today

D.R. Horton (DHI) closed at $144.41 in the latest trading session, marking a +1.51% move from the prior day. This move outpaced the S&P 500's daily gain of 1.06%. Meanwhile, the Dow experienced a rise of 1.18%, and the technology-dominated Nasdaq saw an increase of 1.4%.

The stock of homebuilder has fallen by 6.07% in the past month, lagging the Construction sector's loss of 5.68% and the S&P 500's gain of 2.46%.

Market participants will be closely following the financial results of D.R. Horton in its upcoming release. It is anticipated that the company will report an EPS of $3.07, marking a 0.99% rise compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $9.05 billion, down 6.52% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates are projecting earnings of $10.46 per share and revenue of $32.82 billion, which would represent changes of -9.59% and -4.18%, respectively, from the prior year.

Investors should also pay attention to any latest changes in analyst estimates for D.R Horton. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. D.R. Horton currently has a Zacks Rank of #3 (Hold).

From a valuation perspective, D.R. Horton is currently exchanging hands at a Forward P/E ratio of 13.6. Its industry sports an average Forward P/E of 13.6, so one might conclude that D.R. Horton is trading at no noticeable deviation comparatively.

Meanwhile, DHI's PEG ratio is currently 2.26. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Building Products - Home Builders was holding an average PEG ratio of 2.67 at yesterday's closing price.

The Building Products - Home Builders industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 98, which puts it in the top 40% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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