Abstract
D.R. Horton will release fiscal quarterly results on January 20, 2026 Pre-Market. The preview evaluates last quarter’s performance, the company’s current-quarter outlook across core homebuilding and financial services operations, and consensus expectations for revenue, margins, net income, and adjusted EPS, alongside the prevailing institutional stance.
Market Forecast
Consensus for D.R. Horton’s current quarter points to revenue of USD 6.60 billion, adjusted EPS of USD 1.93, and EBIT of USD 0.76 billion, implying year-over-year declines of 06.77%, 17.97%, and 23.04%, respectively; margin commentary suggests a normalization from last year’s elevated levels. Homebuilding remains the highlight with broad demand resilience, while financial services provides incremental stability; the most promising segment is homebuilding sales revenue of USD 8.54 billion last quarter, with pricing and volume mix indicating a moderate YoY pullback in units but stable backlog conversion.
Last Quarter Review
D.R. Horton reported revenue of USD 9.68 billion, a gross profit margin of 20.78%, GAAP net profit attributable to the parent of USD 0.91 billion, a net profit margin of 09.35%, and adjusted EPS of USD 3.04, reflecting year-over-year declines in EPS and EBIT but a revenue result above prior estimates. A notable highlight was outperformance versus revenue consensus by USD 0.26 billion despite softer profitability and a quarter-on-quarter net profit change of -11.64%. Main business highlights: homebuilding (new home sales) revenue was USD 8.54 billion, rental revenue was USD 0.81 billion, financial services contributed USD 0.22 billion, and land/lot and other revenue was USD 0.11 billion, with homebuilding as the primary growth engine on the latest mix.
Current Quarter Outlook
Main Homebuilding Operations
D.R. Horton’s core homebuilding operations drive the company’s top line and operating earnings through community count, sales pace, and pricing discipline. The forecast for this quarter indicates revenue normalization to USD 6.60 billion and adjusted EPS of USD 1.93, consistent with seasonal moderation and fewer closings relative to the prior quarter’s peak. Margin sensitivity is expected from input costs that are still above pre-pandemic baselines and promotional activity aimed at sustaining absorption rates. Backlog conversion remains the near-term lever, with cycle-time management and build-to-order dynamics helping offset affordability pressures. The company’s geographic diversity supports volume stability, while targeted incentives preserve traffic; yet the model assumes slightly lower average selling prices and cautious gross margin relative to last quarter’s 20.78%.
Most Promising Business Area
Homebuilding is positioned as the most promising driver, given scale advantages, broad lot positions, and community breadth that enhance market capture when mortgage rates and buyer sentiment stabilize. Last quarter’s USD 8.54 billion in homebuilding revenue underscores capacity to convert demand across entry-level and move-up segments. The current quarter’s forecast implies a lower closing cadence but a path to sustained profitability through controlled spec inventory, optimized construction cycles, and selective land takedowns. If rates ease modestly or incentives effectively bridge affordability gaps, homebuilding volume could outperform the YoY decline implied in revenue and EPS expectations, even if gross margin edges lower than the 20.78% level. The segment’s backlog health will be central to pacing this quarter’s closings, supported by streamlined builds and community count actions.
Key Stock Price Drivers This Quarter
Investor focus will likely center on the trajectory of gross profit margin and net profit margin versus last quarter’s 20.78% and 09.35%, respectively, alongside adjusted EPS execution relative to the USD 1.93 forecast. Order trends and cancellation rates will be closely watched as indicators of demand durability under current mortgage rate conditions, while any commentary on incentives, price discipline, and build costs will frame margin expectations. Guidance around community count, spec inventory levels, and land acquisition cadence can influence sentiment, as it signals confidence in demand visibility and capital deployment. Management’s outlook for backlog conversion and cycle times will be important to bridge the implied YoY decline in revenue and EBIT. Financial services performance can smooth earnings variability through capture rates and mortgage operations efficiencies, but the stock’s near-term moves will likely be driven by homebuilding volume and margin prints versus consensus.
Analyst Opinions
The prevailing institutional stance skews positive, with a majority of recent previews highlighting D.R. Horton’s scale and operational flexibility as advantages for navigating affordability crosswinds and potential rate shifts. Analysts point to disciplined spec management, broad product offerings, and diversified geographic exposure as supportive of maintaining absorption rates even as the current quarter’s forecasts imply lower revenue and EPS. Several well-followed institutions emphasize backlog stability and efficient cycle-time management as mitigating factors for margin compression risks, with commentary suggesting that price incentives are targeted rather than broad-based. The bullish view contends that, within expected near-term normalization, D.R. Horton’s execution can deliver results that align with or modestly exceed the revenue estimate of USD 6.60 billion and adjusted EPS of USD 1.93, especially if orders and cancellations trend favorably through January. The supportive case also stresses that operating leverage from scale, land positions, and community breadth provides a buffer against input cost variability, keeping EBIT close to the USD 0.76 billion expectation with potential upside if gross margin holds better than anticipated.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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