D.R. Horton Inc (DHI, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $161.86, D.R. Horton Inc has witnessed a daily gain of 2.07%, marked against a three-month change of 7.57%. A thorough analysis, underlined by the GF Score, suggests that D.R. Horton Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 7/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 3/10
- Momentum rank: 9/10
Each one of these components is ranked and the ranks also have positive correlation with the long-term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in financial strength, profitability, and growth, but a lower GF Value rank, GuruFocus assigned D.R. Horton Inc the GF Score of 93 out of 100, which signals the highest outperformance potential.
Understanding D.R. Horton Inc's Business
D.R. Horton Inc is a leading homebuilder in the United States with operations in 118 markets across 33 states. D.R. Horton mainly builds single-family detached homes (over 90% of home sales revenue) and offers products to entry-level, move-up, luxury buyers, and active adults. The company offers homebuyers mortgage financing and title agency services through its financial services segment. D.R. Horton's headquarters are in Arlington, Texas, and it manages six regional segments across the United States. With a market cap of $53.71 billion and sales of $35.93 billion, the company's operating margin stands at 16.82%, reflecting its operational efficiency.
Financial Strength Breakdown
According to the Financial Strength rating, D.R. Horton Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. With an Altman Z-Score of 7, D.R. Horton Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.15, D.R. Horton Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows D.R. Horton Inc's impressive standing among its peers in generating profit. D.R. Horton Inc's Operating Margin has increased significantly over the past five years, with the latest figure standing at 17.21%. Furthermore, the company's Gross Margin has also seen a consistent rise, indicating growing proficiency in transforming revenue into profit. D.R. Horton Inc's strong Predictability Rank of 5.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, D.R. Horton Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 23.5%, which outperforms 88.12% of companies in the Homebuilding & Construction industry. Moreover, D.R. Horton Inc has seen a robust increase in its EBITDA over the past few years, with a three-year growth rate of 30.9%, accentuating the company's capability to drive growth.
Conclusion: D.R. Horton Inc's Position for Outperformance
Considering D.R. Horton Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. The company's strategic approach to financial management, consistent profitability, and impressive growth trajectory make it a compelling choice for investors seeking long-term value. With a GF Score of 93, D.R. Horton Inc stands out as a strong contender in the market, poised for continued success.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
