This week, the stocks of D.R. Horton (DHI) have been climbing higher due to their release of stronger-than-anticipated financial results in their Q3 fiscal report. Despite ongoing challenges in the housing market, low consumer confidence, and high mortgage rates, these figures exceeded expectations.
By Thursday at 1:10 p.m. Eastern Time, shares of D.R. Horton had climbed a noteworthy 10.1% over the course of the week, as per information provided by S&P Global Market Intelligence.
D.R Horton surprises the market
In today’s housing market, home builders could potentially hold an edge over real estate agencies because of the nationwide housing shortage, which has fueled a desire for newly constructed homes. However, despite this demand, the construction industry has faced significant hurdles in expansion, primarily due to elevated mortgage rates.
In this context, D.R. Horton experienced a 7% decrease in revenue to $9.2 billion, surpassing the estimated $8.8 billion. The number of homes closed decreased by 4% in the quarter to 23,160, which was more than they had anticipated, and sales orders remained steady compared to the previous year but increased 3% from the previous quarter, a promising trend.
Moving lower on their financial statement, the company disclosed a gross margin of 21.8% and earnings per share (EPS) of $3.36. However, this EPS figure represents a decrease from the previous year’s quarterly EPS of $4.10. This decrease was partially offset by a reduction in outstanding shares by 8%. Remarkably, this outcome surpassed the estimated EPS of $2.90.
The management team understands that persistent financial limitations and cautious consumer attitudes are influencing the market’s demand. To boost sales, they have kept their promotional offers at a high level, an action that has contributed to a dip in profitability.
What’s next for D.R. Horton?
It appears that interest rates aren’t expected to alter significantly in the short run, which could keep stressing the stock, yet these aspects appear to already be reflected in its current pricing.
For the entire year, the company has adjusted its projected revenue range to between $33.7 billion and $34.2 billion, and it aims to repurchase shares worth $4.2 billion to $4.4 billion. Given this rate of share buybacks, the stock appears to be a sensible investment, despite potential flat profits.
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2025-07-24 21:24