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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#2043
Positioning
Market Dominance
Construction
Construction
$42.1B
David V. Auld
D.R. Horton, Inc. operates as a homebuilding company in East, North, Southeast, South Central, Southwest, and Northwest regions. The company constructs and sells single-family detached homes; and attached homes, such as town homes, duplexes, and triplexes. It also provides mortgage financing services; and title insurance policies, and examination and closing services.
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Dates updated upon official exchange announcement.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = DHI ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$FER Ferrovial SE | 76 | 89 | 94 | 72 | - | - | 162.2% | 12.2% | 87.8% | 88.9% | 38.1% | 0.5% | 2.1% | - | $30.3B | VS | |
$CX CEMEX SAB DE CV | 74 | 81 | 87 | 87 | - | - | 7.8% | 3.5% | 33.6% | 11.2% | 5.9% | -2.1% | 1.1% | 60.0x | $32.6B | VS | |
$MWA Mueller Water Products, Inc. | 69 | 85 | 87 | 57 | 17.9x | 11.0x | 21.4% | 11.0% | 36.1% | 18.2% | 13.4% | 8.8% | 1.1% | 46.0x | $4.0B | VS | |
$TOL Toll Brothers, Inc. | 69 | 83 | 92 | 63 | 7.9x | 5.6x | 16.9% | 9.7% | 25.1% | 15.7% | 12.3% | 1.1% | 0.7% | 34.0x | $13.0B | VS | |
$GFF GRIFFON CORP | 68 | 86 | 82 | 60 | - | - | 34.2% | 2.3% | 42.0% | 8.2% | 2.0% | -4.0% | 0.9% | 1909.0x | $3.5B | VS | |
$FIX COMFORT SYSTEMS USA INC | 68 | 80 | 43 | 97 | 25.0x | 18.1x | 52.7% | 19.4% | 24.8% | 15.5% | 11.9% | 35.2% | 0.2% | 6.0x | $29.1B | VS | |
$BBU Brookfield Business Partners L.P. | 66 | 63 | 94 | 68 | - | - | 5.0% | 1.1% | 14.1% | 7.2% | 2.2% | -26.2% | 1.1% | 1081.0x | $1.7B | VS | |
$PHOE Phoenix Asia Holdings Ltd | 64 | 95 | 97 | 40 | - | - | 42.6% | 22.6% | 29.5% | 17.6% | 13.9% | 28.1% | 0.0% | 0.0x | $6M | VS | |
$EME EMCOR Group, Inc. | 64 | 75 | 42 | 80 | 24.6x | 16.0x | 36.5% | 14.0% | 19.4% | 9.4% | 6.9% | 16.4% | 0.1% | 3.0x | $29.1B | VS | |
$DY DYCOM INDUSTRIES INC | 64 | 68 | 58 | 89 | 19.9x | 9.7x | 29.4% | 11.8% | 22.1% | 10.4% | 7.3% | 14.1% | 0.0% | 63.0x | $8.5B | VS | |
$DHI HORTON D R INC /DE/ | 50 | 36 | 55 | 53 | 14.4x | 11.0x | 13.5% | 9.5% | 24.2% | 13.7% | 10.4% | -30.9% | 1.1% | 41.0x | $42.1B | ||
| SECTOR BENCH | - | - | - | - | - | 19.1x | 10.7x | 14.2% | 5.9% | 23.7% | 7.3% | 5.4% | 1.9% | 0.0% | 0.4x | - | REF |
HORTON D R INC /DE/ (DHI) receives a "Reduce" rating with a composite score of 49.7/100. It ranks #2043 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
David V. Auld
Chief Executive Officer
Labor Force
13,200
36
52
74
Audit Verdict: Average governance indicators based on financial metrics.
No recent insider transactions available for DHI
In-line with peers — no strong momentum signal
Fair valuation relative to peers
Average quality profile
Low volatility — smoother ride and historically better risk-adjusted returns
Moderate investment profile
Mid-range overall rating
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Relative valuation derived from Construction sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for DHI.
View All RatingsMaterial decline in asset turnover efficiency detected
| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 36 | 31 | +5NEUTRAL |
| MOMENTUM | 53 | 55 | -2NEUTRAL |
| VALUATION | 55 | 59 | -4NEUTRAL |
| INVESTMENT | 52 | 92 | -40DRAG |
| STABILITY | 74 | 83 | -9DRAG |
| SHORT INT | 36 | 26 | +10ALPHA |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROE proxy 13.5% (sector 14.2%)
GM 24% vs sector 24%, OM 14% vs sector 7%
Capital turnover N/A
Rev growth -31%, 11yr history
Interest coverage N/A
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
HORTON D R INC /DE/ receives a Reduce rating from our analysis, with a composite score of 49.7/100 and 2 out of 5 stars, ranking #2043 out of 7,333 stocks. DHI's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
DHI's quality score of 36/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of 13.5% (sector avg: 14.2%), gross margins of 24.2% (sector avg: 23.7%), net margins of 10.4% (sector avg: 5.4%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
DHI's value score of 55/100 indicates the stock is fairly valued based on its current fundamentals. Key valuation metrics include a P/E ratio of 14.38x, an EV/EBITDA of 10.97x, a P/B ratio of 1.94x. At this level, neither a clear bargain nor overpriced, the stock's attractiveness depends more on forward growth expectations and qualitative factors.
With an investment score of 52/100, DHI exhibits moderate growth-oriented spending. Key growth metrics include revenue growth of -30.9% vs. a sector average of 1.9% and a return on assets of 9.5% (sector: 5.9%). The company appears to be balancing growth investments with capital returns, though the pace of investment may not be enough to accelerate top-line growth meaningfully.
DHI demonstrates moderate momentum with a score of 53/100, suggesting a neutral price trend without strong directional conviction. Revenue growth stands at -30.9% year-over-year, while a beta of 0.50 reflects its sensitivity to broader market moves. Moderate momentum may indicate the stock is consolidating or transitioning between trends, warranting close monitoring of upcoming catalysts.
DHI shows good financial stability with a score of 74/100. Key stability metrics include a beta of 0.50 and a debt-to-equity ratio of 41.00x (sector avg: 0.4x). This suggests manageable leverage and moderate price volatility, making it appropriate for investors seeking a balance between growth potential and capital preservation.
HORTON D R INC /DE/'s short interest score of 36/100 reveals significant bearish positioning, suggesting institutional investors are actively betting against the stock. Specific risk factors include elevated leverage (D/E: 41.00x). At $42.1B (large-cap), DHI carries meaningful risk and is best suited for investors with high risk tolerance who have thoroughly evaluated the bear thesis.
DHI offers a modest dividend yield of 1.1%. While the income contribution is relatively small, even a small dividend signals management's commitment to shareholder returns and can serve as a signal of financial discipline.
HORTON D R INC /DE/ is a large-cap company in the Construction sector, ranked #0 of 50 in its sector (100th percentile) and #2043 of 7,333 overall (72nd percentile). Key comparisons include ROE of 13.5% trailing the 14.2% sector median and operating margins of 13.7% above the 7.3% sector average. This top-quartile standing reflects exceptional competitive strength relative to Construction peers.
While DHI currently exhibits a REDUCE profile, superior opportunities exist within the CONSTRUCTION sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
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Improvement in Quality (36) would have the largest impact on the composite score.
EV/EBITDA IN LINE WITH SECTOR BENCHMARKS
ROE IN LINE WITH SECTOR BENCHMARKS
Gross Margin IN LINE WITH SECTOR BENCHMARKS
AUDIT DATA AS OF DEC 31, 2025 (Q3 FY2025)
We rate HORTON D R INC /DE/ (DHI) as a Reduce with a composite score of 49.7/100 at a current price of $163.04. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.
The rating is primarily driven by strength in stability (74th percentile) and value (55th percentile), which together account for the majority of the composite score. Offsetting weakness in quality (36th percentile) and investment (52th percentile) tempers our overall conviction. We assign a Narrow Moat rating (43/100), Low uncertainty, and Standard capital allocation.
Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
HORTON D R INC /DE/ holds a top-quartile position (#0 of 50) within the Construction sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 49.7/100 places it at rank #2043 in our full 7,333-stock universe. With a $42.1B market capitalization, HORTON D R INC /DE/ operates at meaningful scale within the Construction sector, providing competitive advantages in distribution, procurement, and customer reach.
Revenue contraction of -31% combined with momentum at the 53th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.
The margin cascade tells an important story: gross margins of 24% (+0.5pp vs sector) narrow to operating margins of 14% (+6.3pp vs sector) and net margins of 10.4%, yielding a gross-to-net conversion rate of 43%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.
At a current price of $163.04, HORTON D R INC /DE/ is trading near fair value based on current fundamentals. Our value factor score of 55/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.
The stock currently trades at a P/E of 14.4x (a 25% discount to the sector median of 19.1x), EV/EBITDA of 11.0x (near the sector median), P/B of 1.9x, P/S of 1.5x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.
Return on assets of 9.5% indicates efficient deployment of the full asset base, not just equity capital.
The Reduce rating (composite 49.7/100) reflects multi-factor weakness, and historically, stocks in this scoring range have underperformed the market by a meaningful margin.
Revenue decline of -31% signals business deterioration — declining revenues make it difficult to grow into the current valuation and often precede further negative revisions.
We assign a Low uncertainty rating to HORTON D R INC /DE/. The company exhibits strong financial stability with a beta of 0.50, conservative leverage (41% D/E), and a stability factor in the 74th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.
Specific risk factors that inform our assessment include: low beta of 0.50 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 74th percentile and quality factor at the 36th percentile provide a quantitative summary of the overall risk landscape.
Key risk mitigants include: above-average stability (74th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.
We rate HORTON D R INC /DE/'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 13.5%, and the balance sheet is managed within acceptable parameters (D/E: 41%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; HORTON D R INC /DE/ falls short on at least one dimension.
There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 1.15% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.
In summary, HORTON D R INC /DE/ receives a Reduce rating with a composite score of 49.7/100 (rank #2043 of 7,333). Our quantitative framework assigns a Narrow Moat (43/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 54/100.
Our analysis does not support a constructive view on HORTON D R INC /DE/ at this time. The combination of the current quantitative profile, low uncertainty, and standard capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We assign HORTON D R INC /DE/ a Narrow Moat rating with a composite moat score of 43/100. The company possesses identifiable competitive advantages, though they are less entrenched than those of wide-moat peers. Our analysis indicates that HORTON D R INC /DE/ can sustain above-average returns on invested capital for at least 10 years, with the strongest contributor being margin superiority at 13.9/20.
The strongest moat sources are margin superiority (13.9/20) and growth durability (12.7/20). GM 24% vs sector 24%, OM 14% vs sector 7%. Rev growth -31%, 11yr history. These pillars form the core of HORTON D R INC /DE/'s competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include reinvestment efficiency (0/20) and financial resilience (8.1/20). Capital turnover N/A. Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect HORTON D R INC /DE/'s moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include operating margins of 14% reflecting effective cost management, declining revenues (-31%) that pressure the earnings outlook. The margin cascade from 24% gross to 14% operating to 10.4% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that profit quality raises some durability concerns, with the quality factor at the 36th percentile.
The margin profile shows gross margins of 24%, operating margins of 14%, net margins of 10.4%. Return metrics include ROE of 13.5% and ROA of 9.5%. Relative to the Construction sector, gross margins are 0.5 percentage points above the sector median of 24%, and ROE of 13.5% compares to a sector median of 14.2%.
The balance sheet reflects moderate leverage with D/E of 41%, a dividend yield of 1.15%, revenue growth of -31%. The sector median D/E is 0%, putting HORTON D R INC /DE/ at higher leverage than the typical peer. The combination of low leverage and healthy profitability provides significant financial resilience and strategic optionality.
Above 50MA
37.18%
Net New Highs
+51081
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