The company has been hit this year with rising mortgage rates and increasing home prices lowering consumer demand. Last quarter, D.R. Horton resorted to discounting in order to boost sales.
Analysts expect the Fort Worth, TX-based company to report fourth quarter earnings of 48 cents per share, compared to the 40 cents per share it reported in the same quarter of last year.
Analysts also expect revenue of $2.38 billion for the fourth quarter, higher than the $1.8 billion in sales from a year ago.
Shares of D.R. Horton are slightly down 0.13% to $23.40 in after-hours trading Monday.
Separately, TheStreet Ratings team rates D R HORTON INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate D R HORTON INC (DHI) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 7.2%. Since the same quarter one year prior, revenues rose by 26.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.69, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- D R HORTON INC's earnings per share declined by 23.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, D R HORTON INC reported lower earnings of $1.34 versus $2.74 in the prior year. This year, the market expects an improvement in earnings ($1.53 versus $1.34).
- You can view the full analysis from the report here: DHI Ratings Report