How Does This Homebuilder Operate?
D.R. Horton is a U.S. homebuilder focused on constructing and selling residential homes. The company’s core activity is delivering completed homes to buyers, tying results to how efficiently it can convert land and building activity into closings. Its scale is substantial, with an equity value of about USD 39.9 billion, placing it among the larger publicly traded builders. The business model is straightforward: build, sell, and recycle capital into the next set of homes.
Are Revenues And Margins Holding Steady?
FundamentalsFor the year ended September 30, 2025, reported in USD, revenue was about USD 34.3 billion and net income was roughly USD 3.6 billion. Revenue declined 6.9% versus the prior annual period, while trailing profitability held at a 23.14% gross margin, a 12.68% operating margin, and a 9.51% net profit margin.
The balance sheet shows around USD 3.0 billion of cash against USD 6.0 billion of total debt. Depreciation and amortization was USD 101.3 million, and trailing ROE was 13.24%.
Is The Market Undervaluing These Earnings?
DCF / MultiplesAt USD 140.73, the stock trades below the DCF-derived fair value range, even under the weaker scenario. That setup is paired with a trailing P/E of 12.58 and EV/EBITDA of 10.27, levels that align more with a business priced for fragility than one sustaining double-digit operating margins.
Resilient Margins Suggest Mispricing
TakeawayThe pricing looks harsher than the current numbers justify. For this to work, margins and returns must stay resilient. The main risk is that revenue softness drags profits down. If durability holds, the gap to fair value looks like mispricing.