D.R. Horton (DHI) Gains But Lags Market: What You Should Know

In the latest trading session, D.R. Horton (DHI) closed at $39.30, marking a +0.2% move from the previous day. The stock lagged the S&P 500's daily gain of 9.28%. Meanwhile, the Dow gained 9.36%, and the Nasdaq, a tech-heavy index, added 9.34%.

Coming into today, shares of the homebuilder had lost 36.4% in the past month. In that same time, the Construction sector lost 31.22%, while the S&P 500 lost 26.56%.

DHI will be looking to display strength as it nears its next earnings release, which is expected to be April 28, 2020. On that day, DHI is projected to report earnings of $1.13 per share, which would represent year-over-year growth of 21.51%. Our most recent consensus estimate is calling for quarterly revenue of $4.40 billion, up 7.51% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.27 per share and revenue of $19.21 billion. These totals would mark changes of +22.84% and +10.02%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for DHI. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.14% higher. DHI is currently a Zacks Rank #2 (Buy).

Digging into valuation, DHI currently has a Forward P/E ratio of 7.44. This valuation marks a premium compared to its industry's average Forward P/E of 6.88.

Meanwhile, DHI's PEG ratio is currently 0.65. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Building Products - Home Builders was holding an average PEG ratio of 0.66 at yesterday's closing price.

The Building Products - Home Builders industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 20, which puts it in the top 8% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.