<div id="readability-page-1"><div><ul> <li>Assessing whether D.R. Horton stock still offers value at current levels, or whether the easy gains are behind it, starts with understanding how the price lines up against the fundamentals.</li> <li>The share price closed at US$137.49, with returns that fell 5.2% over the past week and 8.2% over the past month, while remaining up 11.3% over 1 year, 31.1% over 3 years, and 58.8% over 5 years.</li> <li>Recent market attention has focused on D.R. Horton in the context of the broader U.S. housing and construction sector, with investors weighing interest rate expectations and housing demand against current valuations. This has helped frame the stock as one where sentiment can shift quickly as new macro and sector headlines emerge.</li> <li>D.R. Horton currently has a valuation score of 3 out of 6. The next sections will walk through what that means across different valuation methods, before turning to a broader way of thinking about what the stock might be worth.</li> </ul> D.R. Horton delivered 11.3% returns over the last year. See how this stacks up to the rest of the Consumer Durables industry. <h3>Approach 1: D.R. Horton Discounted Cash Flow (DCF) Analysis</h3> A Discounted Cash Flow, or DCF, model takes estimates of the cash D.R. Horton could generate in the future and discounts those amounts back to today using a required return, giving an estimate of what the business might be worth now. For D.R. Horton, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flows in $. The latest twelve month free cash flow is about $3.5b. Analysts provide explicit forecasts out to 2027, with free cash flow in that year projected at $2.6b, and Simply Wall St extrapolates these out to 2035, with a 2035 projection of about $2.8b. After discounting each of these projected cash flows back to today and summing them, the DCF model arrives at an estimated intrinsic value of $145.53 per share, compared with the recent share price of $137.49. This implies the stock is trading at roughly a 5.5% discount to the model estimate, which is a relatively small gap. Result: ABOUT RIGHT D.R. Horton is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act. <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/a16e0f30-6cb4-4635-9b12-6b91b8ba8a51/chart/dcf/query-ZGF0ZT0yMDI2LTA1LTE5?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/a16e0f30-6cb4-4635-9b12-6b91b8ba8a51/chart/dcf/query-ZGF0ZT0yMDI2LTA1LTE5"/><figcaption>DHI Discounted Cash Flow as at May 2026</figcaption></figure> Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for D.R. Horton. <h3>Approach 2: D.R. Horton Price vs Earnings</h3> For a profitable company like D.R. Horton, the P/E ratio is a useful way to gauge how much you are paying for each dollar of current earnings. Investors typically accept a higher P/E if they expect stronger earnings growth or see the business as lower risk, and look for a lower P/E when growth expectations or perceived risk are more modest. D.R. Horton currently trades on a P/E of 12.3x. This sits above the Consumer Durables industry average of 11.3x and above the peer group average of 10.8x, which suggests the stock is priced at a premium compared with many direct comparisons. Simply Wall St’s Fair Ratio for D.R. Horton is 24.9x. This is a proprietary estimate of what a “normal” P/E might look like, given factors such as the company’s earnings growth profile, industry, profit margins, market cap and specific risks. Because it incorporates these company specific drivers, the Fair Ratio can be more informative than a simple peer or industry comparison, which treats very different businesses as if they should trade on the same multiple. On this view, D.R. Horton’s current 12.3x P/E sits well below the 24.9x Fair Ratio, which indicates the stock may be undervalued on this metric. Result: UNDERVALUED <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/a16e0f30-6cb4-4635-9b12-6b91b8ba8a51/chart/pe-multiple-vs-industry/query-ZGF0ZT0yMDI2LTA1LTE5?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/a16e0f30-6cb4-4635-9b12-6b91b8ba8a51/chart/pe-multiple-vs-industry/query-ZGF0ZT0yMDI2LTA1LTE5"/><figcaption>NYSE:DHI P/E Ratio as at May 2026</figcaption></figure> P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 18 top founder-led companies. <h3>Upgrade Your Decision Making: Choose your D.R. Horton Narrative</h3> Earlier it was mentioned that there is an even better way to understand valuation, so Narratives are introduced here as a simple way for you to attach a story about D.R. Horton to concrete numbers like expected revenue, earnings, margins and a fair value, then compare that fair value to the current price to decide whether the stock looks attractive or expensive. On Simply Wall St’s Community page, you can pick or build a Narrative that connects what you think is happening at the company to a full forecast and valuation. This may look closer to a cautious view with a Fair Value of US$123.0 or a more optimistic view with a Fair Value of US$193.0. You can then see in real time how that gap between Fair Value and price changes as new earnings, news, or guidance arrive. For D.R. Horton however we'll make it really easy for you with previews of two leading D.R. Horton Narratives: Start with a constructive view if you think the current price is not fully reflecting longer term housing demand, margin potential, and capital returns. 🐂 D.R. Horton Bull Case Fair Value: US$160.50 per share Current discount to this Fair Value: about 14.3% below the narrative estimate Revenue growth assumption: 6.47% a year <ul> <li>Analysts in this camp anchor on structural U.S. housing demand, demographic trends, and D.R. Horton's entry level focus as support for ongoing volume and revenue growth through the cycle.</li> <li>They highlight vertical integration, balance sheet discipline, and share buybacks as tools that can support margins, returns on equity, and earnings per share even as conditions shift.</li> <li>Risks center on affordability pressure, land and lot cost inflation, and exposure to first time buyers, but the view is that these are manageable within the forecast ranges that lead to a Fair Value close to US$160.50.</li> </ul> If you are more cautious and worry that current conditions and policy risks are not fully reflected in the price, you can stress test your view against a lower Fair Value anchored to more conservative assumptions. 🐻 D.R. Horton Bear Case Fair Value: US$123.00 per share Current premium to this Fair Value: about 11.8% above the narrative estimate Revenue growth assumption: 5.46% a year <ul> <li>This narrative leans on affordability constraints, higher rate sensitivity, and potential antitrust scrutiny as reasons why revenue growth and margins might trend closer to the low end of analyst ranges.</li> <li>It assumes lower profit margins and a more modest P/E multiple in a few years time, which together pull the Fair Value down to US$123.00 even though earnings are still expected to grow.</li> <li>The key challenge to this view is that long term housing demand, undersupply, and D.R. Horton's scale and cash generation could prove more supportive than these cautious assumptions allow for.</li> </ul> Seen side by side, these Narratives frame a reasonable band for what D.R. Horton could be worth if the next few years lean more toward the constructive case, or toward the cautious case, rather than relying on a single point estimate. If you want to see the full reasoning, numbers, and fair value paths behind these stories in one place, See what the community is saying about D.R. Horton Do you think there's more to the story for D.R. Horton? Head over to our Community to see what others are saying! <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/a16e0f30-6cb4-4635-9b12-6b91b8ba8a51/chart/quote-price/query-ZGF0ZT0yMDI2LTA1LTE5?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/a16e0f30-6cb4-4635-9b12-6b91b8ba8a51/chart/quote-price/query-ZGF0ZT0yMDI2LTA1LTE5"/><figcaption>NYSE:DHI 1-Year Stock Price Chart</figcaption></figure> This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.<div><h3>New: Manage All Your Stock Portfolios in One Place</h3>We've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency • Be alerted to new Warning Signs or Risks via email or mobile • Track the Fair Value of your stocks Try a Demo Portfolio for Free</div></div></div>

NAIL

D.R. Horton (DHI) shares closed at $137.49, experiencing a 5.2% decline over the past week. Despite this, the stock has risen 11.3% over the last year. A Discounted Cash Flow analysis suggests an intrinsic value of $145.53, indicating the stock is fairly valued. However, with a P/E ratio of 12.3x, above industry averages, it may also be seen as undervalued. Investors are advised to monitor market conditions as sentiment can shift rapidly.

Is It Too Late To Reassess D.R. Horton (DHI) After Recent Share Price Pullback