D.R. Horton Reports Q4 Earnings Below Estimates Despite $9.4 Billion Revenue, Shares Fall 4.2%

Homebuilder and housing supplier stocks surged following the midterm elections. Lennar and PulteGroup rose over 7%, D.R. Horton over 8%, Home Depot 6.5%, and Lowe's 7.5%. The gains followed Democratic wins, with investors anticipating potential affordability policies. The sector has faced cost increases and a 4 million home shortfall, according to Realtor.com.

DR Horton (DHI) shares fell 5.01% to $145.26 after Raymond James downgraded the stock to Underperform, citing valuation concerns and a recent earnings miss. The stock is now 12.9% below its 52-week high and 10.3% above its low, but still up 1.7% year-to-date.

Raymond James downgraded D.R. Horton (NYSE:DHI) to Underperform due to valuation concerns, citing its higher earnings multiple and ROIC-adjusted price-to-book premium. The firm expects competitive market conditions and rising costs to pressure margins. D.R. Horton reported Q4 earnings below estimates but beat revenue projections, with management reducing housing starts and increasing share buybacks.

D.R. Horton reported Q4 2026 earnings of $2.67 per share, missing estimates, while revenue of $9.371 billion exceeded expectations. The company cited high mortgage rates and affordability pressures as factors in weaker demand, declining sales prices, and a higher cancellation rate. Management expects continued margin pressure in fiscal 2027 and forecasted revenue below analyst estimates. The board increased the quarterly dividend by 11% to $0.50 per share.

D.R. Horton reported Q4 home sales gross margin at 19.5%, down from prior quarter due to market conditions and litigation costs. The company expects Q1 fiscal 2027 margin of 18-18.5%, with elevated incentives. It reduced home starts by 45% sequentially to align inventory with demand. For fiscal 2027, D.R. Horton forecasts revenue of $30-32 billion, homebuilding closings of 79,000-84,000, and plans $3 billion in stock repurchases.

D.R. Horton (DHI) reported Q4 2026 earnings, with CEO Paul Romanowski noting elevated mortgage rates persist in their outlook. CFO Bill Wheat highlighted a 7% drop in orders but maintained full-year closings guidance due to increased community count. COO Mike Murray discussed balancing pace and margins. The company expects lower average selling prices and higher stick and brick costs. They plan $3B in buybacks and see consolidation opportunities in weaker markets.