What Happened?
Shares of homebuilder D.R. Horton (NYSE:DHI) jumped 14% in the morning session after the company reported fiscal third-quarter results that surpassed Wall Street's expectations. The nation's largest homebuilder announced earnings of $3.36 per share on revenue of $9.23 billion. These figures comfortably beat the consensus analyst estimates, which called for earnings of approximately $2.90 per share and revenue of $8.78 billion. Although total revenue and net income declined year-over-year, investors focused on the better-than-expected performance in a challenging housing market characterized by affordability issues. The company's net sales orders for new homes also topped forecasts, coming in at 23,071 units against an expected 22,114. While the company slightly lowered the midpoint of its full-year revenue guidance, the strong quarterly beat provided a significant boost to investor confidence.
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What Is The Market Telling Us
D.R. Horton’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. Moves this big are rare for D.R. Horton and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 12.5% on the news that the company reported weak third-quarter earnings results. Its full-year revenue guidance missed, and its EBITDA fell short of Wall Street's estimates. DHI highlighted macro challenges similar to some of the housing stocks that have reported this season. Management added "We believe that rate volatility and uncertainty are causing some buyers to stay on the sidelines in the near term." Overall, this was a softer quarter.
D.R. Horton is up 9.5% since the beginning of the year, but at $150.71 per share, it is still trading 23.5% below its 52-week high of $197.06 from September 2024. Investors who bought $1,000 worth of D.R. Horton’s shares 5 years ago would now be looking at an investment worth $2,326.
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