As you might know, D.R. Horton, Inc. (NYSE:DHI) just kicked off its latest quarterly results with some very strong numbers. Results were good overall, with revenues beating analyst predictions by 3.8% to hit US$10.0b. Statutory earnings per share (EPS) came in at US$4.10, some 8.2% above whatthe analysts had expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on D.R. Horton after the latest results.
Following the latest results, D.R. Horton's 17 analysts are now forecasting revenues of US$39.5b in 2025. This would be a reasonable 5.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 4.8% to US$16.02. Before this earnings report, the analysts had been forecasting revenues of US$39.4b and earnings per share (EPS) of US$15.54 in 2025. So the consensus seems to have become somewhat more optimistic on D.R. Horton's earnings potential following these results.
The consensus price target rose 13% to US$190, suggesting that higher earnings estimates flow through to the stock's valuation as well. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on D.R. Horton, with the most bullish analyst valuing it at US$218 and the most bearish at US$130 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await D.R. Horton shareholders.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that D.R. Horton's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.7% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.0% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than D.R. Horton.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around D.R. Horton's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple D.R. Horton analysts - going out to 2026, and you can see them free on our platform here.
It might also be worth considering whether D.R. Horton's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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