Thursday, July 7, 2022
HomeInvestmentD.R. Horton Posts Q1 Beat and Raised Guidance

D.R. Horton Posts Q1 Beat and Raised Guidance

D.R. Horton, Inc. (NYSE: DHI) reported stronger-than-expected fiscal Q1 results, topping both earnings and revenue estimates driven by robust housing market conditions. Furthermore, the company raised its revenues outlook for the fiscal year 2021 ahead of analyst expectations.

Likewise, shares of the Texas-based home construction company gained 1.6% on February 2 to close at $90.85.

Fiscal Q1 Beat

Notably, fiscal Q1 adjusted earnings of $3.17 per share grew 48% year-over-year and massively beat analysts’ expectations of $2.79 per share. The company reported earnings of $2.14 per share for the prior-year period.

Further, revenues jumped 19% year-over-year to $7.1 billion and exceeded consensus estimates of $6.71 billion. The increase in revenues reflected a 17% surge in homes closed to 21,522 homes worth $6.7 billion, and a 29% growth in net sales orders to $8.3 billion.

Additionally, pre-tax profit margin improved 380 basis points to 21.2%.

Updated Fiscal 2022 Guidance

Based on robust Q1 results as well as robust market conditions, management updated the financial guidance for FY2021.

The company now forecasts revenues to be in the range of $34.5 – $35.5 billion, versus the consensus estimate of $33.26 billion.

Management Weighs In

Company Chairman, Donald R. Horton, commented, “We remain focused on maximizing returns and improving capital efficiency in each of our communities while increasing our market share. Our strong balance sheet, liquidity and low leverage provide us with significant financial flexibility.”

He further added, “We plan to maintain our disciplined approach to investing capital to enhance the long-term value of our company, including returning capital to our shareholders through both dividends and share repurchases on a consistent basis.”

Wall Street’s Take

Following the results announcement, JMP Securities analyst Aaron Hecht reiterated a Buy rating on DR Horton with a price target of $120 (32.1% upside potential).

Overall, the stock has a Strong Buy consensus rating based on 12 Buys and 3 Holds. At the time of writing, the average DR Horton stock price projection was $123.69, which implies 36.2% upside potential to current levels.

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