Wall Street's Outlook on D.R. Horton Shares: Bullish or Bearish?
D.R. Horton's Q2 2025 Earnings: Mixed Results Amid Housing Market Challenges
D.R. Horton, the largest U.S. homebuilder by volume, reported its Q2 2025 earnings, showing a mixed performance in the face of ongoing challenges in the housing market.
The company's net income per diluted share came in at $3.36, surpassing analysts' expectations of $2.90 per share. However, revenue fell 7.4% year-over-year to $9.23 billion.
Key performance points include a net income attributable to D.R. Horton of approximately $1.0 billion, down from $1.4 billion a year earlier. Consolidated homebuilding revenue decreased by 7% to about $8.6 billion, with the number of homes closed declining 4% to roughly 23,160 units. Despite the revenue declines, the company beat revenue expectations of $8.77 billion with $9.2 billion actuals.
The stock price showed mixed reactions, with shares modestly declining by about 1.0% after earnings, alongside a notable drop in trading volume. Institutional investors continue to show confidence, highlighted by increased stakes from entities like Aveo Capital. Analysts project an EPS of around 13.04 for the full fiscal year 2025, indicating cautious optimism amid volatility in housing markets.
Management expects to close between 85,000 and 85,500 homes for the full fiscal year 2025 and anticipates generating over $3 billion in operating cash flow. Plans for significant share repurchases ($4.2 to $4.4 billion) are in place, reflecting a strong financial position and a focus on shareholder returns despite market headwinds. The company is adapting to market volatility while maintaining its broad geographic footprint and focus on affordable housing.
Financially, D.R. Horton shows a strong net margin (about 10.48%) and return on assets (2.29%), both above industry averages, indicating effective profitability and asset utilization. However, return on equity (3.29%) lags behind peers, suggesting room for improvement in equity efficiency. The debt-to-equity ratio remains conservative at 0.27, supporting balanced debt management.
The street-high target for DHI is $220, suggesting a potential upside of 40.6%. DHI currently holds a consensus "Moderate Buy" rating overall. It's important to note that all information and data in the article are for informational purposes only.
D.R. Horton's shares jumped over 5% on Aug. 1. Despite slumping 9.4% over the past 52 weeks, the stock has risen 11.9% in 2025. However, it has underperformed the SPDR S&P Homebuilders ETF over the past 52 weeks but has surpassed the ETF's return on a YTD basis.
Kritika Sarmah does not have positions in any of the securities mentioned in the article. Two analysts are giving "Strong Sell" recommendations for DHI, while nine analysts are giving "Hold" recommendations. Jade Rahmani of Keefe, Bruyette & Woods reiterated a "Market Perform" rating on D.R. Horton and raised the price target from $135 to $161 on July 24.
As always, it's crucial to conduct your own research or consult with a financial advisor before making investment decisions.
[1] D.R. Horton Reports Third Quarter Fiscal 2025 Results (D.R. Horton Inc., 2025) [2] D.R. Horton Raises Share Repurchase Authorization to $4.4 Billion (D.R. Horton Inc., 2025) [3] D.R. Horton Q2 Earnings Preview (Zacks, 2025) [4] D.R. Horton (DHI) Q2 2025 Earnings Call Transcript (Seeking Alpha, 2025) [5] D.R. Horton Q2 Earnings: What to Watch (The Motley Fool, 2025)
- Despite the revenue declines, D.R. Horton's net income per diluted share surpassed analysts' expectations, demonstrating potential for improving returns in the finance sector for investors who are interested in the business of homebuilding.
- Analysts have shown cautious optimism about D.R. Horton's full fiscal year 2025 earnings, projecting an EPS of around 13.04, emphasizing the appeal of investing in the company's business despite market volatility and housing market challenges.
