Stock Price & Analysis

Based on the recent market data and news, here's a comprehensive analysis of DHI stock:

Technical Analysis

The stock is showing bearish signals with RSI at 34.40 indicating oversold conditions but not yet at extreme levels. The MACD is negative at -4.57 with a bearish crossover, suggesting continued downward momentum. Price is trading below both the 20-day (135.25) and 200-day (160.70) moving averages, confirming the bearish trend.

Fundamental Analysis

Key valuation metrics show:

• P/E ratio: 4.08x
• EV/EBITDA: 3.48x
• P/B ratio: 1.19x
• Dividend yield: 1.34%

These metrics indicate the stock is trading at relatively low valuations compared to historical averages.

Recent Events Impact

According to recent news, there are significant concerns about potential import tariffs from the Trump administration, particularly on lumber and steel, which could impact construction costs. DHI stock has declined approximately 10% year-to-date 2025, reflecting these concerns.

Business Segments

The company's revenue is primarily driven by homebuilding (95.35%), with smaller contributions from Forestar (4.54%), Financial Services (2.38%), and Rental operations (1.52%).

Market Sentiment

The stock is currently facing headwinds due to:

• Rising concerns over potential tariffs
• Housing market slowdown (Jan housing starts fell -9.8% to 1.366 million)
• Sticky mortgage rates affecting buyer demand

Recommendation

SELL. The combination of technical weakness, macro headwinds from potential tariffs, and declining housing starts suggests further downside risk. While valuations are attractive, the near-term headwinds outweigh the long-term potential at current levels.

Based on the provided data and recent market developments, here's a price prediction analysis for DHI stock in 2025:

Technical Analysis

The technical indicators show DHI is currently in a downtrend, with the stock trading below its 20-day moving average of $135.25 and 60-day moving average of $144.64. The RSI-14 at 34.40 indicates oversold conditions, suggesting a potential bounce, but the overall momentum remains bearish.

Price Target Analysis

Based on Fibonacci levels and analyst forecasts:

• Support levels: $125.25, $122.71, $118.59
• Resistance levels: $133.50, $136.04, $140.17
• Current price: $126.73 (pre-market)

Key Drivers for 2025

1. Housing Market Pressures:

• BofA Securities has downgraded DHI citing tough outlook for homebuilders in 2025
• Higher mortgage rates and increased supply creating pricing pressure
• Lot costs rising (+10% YoY) with continued inflation expected

2. Cost Pressures:

• Lot costs make up 26-27% of total costs and showing persistent inflation
• Company may struggle to raise prices to offset cost increases
• Rental segment ROE expected to drag overall returns by >100bps

Price Prediction 2025

Most likely scenario ($130-135):

• Technical rebound from oversold conditions
• Cost pressures partially offset by operational efficiency
• Housing market stabilization in H2 2025

Bearish case ($115-120):

• Continued housing market weakness
• Further margin compression from rising costs
• Higher-for-longer interest rates

Bullish case ($145-150):

• Interest rate cuts stimulating housing demand
• Successful price increases offsetting costs
• Market share gains in key regions

The most probable target range for DHI in 2025 is $130-135, representing moderate upside from current levels but below recent highs due to ongoing industry headwinds.

The S1 support level for DHI Stock is $125.32 ,The R1 resistant level for DHI Stock is $132.14.

As of the end of day on 2025-02-26, the price of DHI Stock was $133.04.

The target price for DHI Stock according to analyst rating is 167.15, with the highest price target at 210.00 and the lowest at 125.00. Analysts have a Moderate Buy rating on DHI Stock overall.

The market cap of DHI is $41.6B.

Based on the provided data and current market conditions, here's a concise analysis of DHI's valuation:

DHI appears fairly valued at current levels considering several key metrics:

Valuation Analysis:

• P/E ratio has increased from 4.08 to 7.77 year-over-year, indicating some valuation expansion but still below industry averages
• EV/EBITDA ratio rose from 3.48 to 5.86, suggesting reasonable operational value despite recent increases
• Price-to-sales ratio at 1.04 remains moderate for the homebuilding sector
• Price-to-book ratio of 1.59 indicates the stock is trading slightly above its book value

Financial Performance:

• Net income declined from $5.86B to $4.75B year-over-year
• Gross margin contracted from 31.56% to 26.59%
• ROE decreased from 34.17% to 22.55%, though still maintaining healthy profitability
• Current ratio improved from 3.56 to 4.33, showing strong liquidity

Technical Indicators:

• RSI-14 at 34.40 indicates oversold conditions
• Trading below all major moving averages (5,10,20,60,200-day)
• MACD showing bearish momentum with -4.57 reading
• Currently trading at 28% of its Bollinger Band range, suggesting potential oversold conditions

Recent Market Impact:

• Stock has declined about 10% year-to-date amid concerns over rising mortgage rates and potential tariffs on construction materials
• Recent earnings from peer Toll Brothers impacted sector sentiment negatively

Based on these metrics, DHI is not overvalued at current levels, particularly given its strong financial position and recent price pullback. However, near-term headwinds from interest rates and potential tariffs warrant careful consideration.

D.R. Horton, Inc. is a homebuilding company. The Company's segments include Homebuilding, Rental, Forestar, Financial Services and Others. The Homebuilding segment is engaged in the acquisition and development of land and the construction and sale of residential homes, with operations in around 118 markets across 33 states. The Rental segment consists of single-family and multi-family rental operations. Its single-family rental operations construct and lease single-family homes within a community and then market each community for a bulk sale of rental homes. The Forestar segment is a residential lot development company with operations in around 54 markets across 22 states. Its homebuilding segment acquires finished lots from Forestar. The Financial services segment provides mortgage financing and title agency services to homebuyers in many of the Company's homebuilding markets. The Other segment includes insurance-related operations, owns water rights and other water-related assets.

Based on the provided data and recent analyst reports, here's a price prediction for DHI stock by 2030:

DHI stock is projected to reach $185-195 by 2030, driven by the company's strong market position in entry-level homebuilding and operational efficiency. Recent analyst reports indicate near-term headwinds in 2025 with ROE decline and cost pressures, but the company's scale advantages and land management strategy should support long-term growth. BofA's recent price target reduction to $150 reflects short-term challenges, but the fundamental business model remains sound for sustained appreciation over 5+ years.

DHI has a total of 13450 employees.