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D.R. Horton (DHI) Gains But Lags Market: What You Should Know

In the latest trading session, D.R. Horton (DHI) closed at $106.16, marking a +0.43% move from the previous day.

This story originally appeared on Zacks

In the latest trading session, D.R. Horton (DHI) closed at $106.16, marking a +0.43% move from the previous day. This change lagged the S&P 500's 2.07% gain on the day. Meanwhile, the Dow gained 1.4%, and the Nasdaq, a tech-heavy index, added 0.49%.

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Heading into today, shares of the homebuilder had gained 14.01% over the past month, outpacing the Construction sector's gain of 3.02% and the S&P 500's loss of 2.08% in that time.

D.R. Horton will be looking to display strength as it nears its next earnings release. On that day, D.R. Horton is projected to report earnings of $2.83 per share, which would represent year-over-year growth of 32.24%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.89 billion, up 16.09% from the year-ago period.

DHI's full-year Zacks Consensus Estimates are calling for earnings of $14.24 per share and revenue of $33.77 billion. These results would represent year-over-year changes of +24.8% and +21.58%, respectively.

Investors should also note any recent changes to analyst estimates for D.R. Horton. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 7.13% higher. D.R. Horton is currently a Zacks Rank #3 (Hold).

Investors should also note D.R. Horton's current valuation metrics, including its Forward P/E ratio of 7.43. This valuation marks a premium compared to its industry's average Forward P/E of 6.96.

It is also worth noting that DHI currently has a PEG ratio of 0.73. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Building Products - Home Builders was holding an average PEG ratio of 0.32 at yesterday's closing price.

The Building Products - Home Builders industry is part of the Construction sector. This group has a Zacks Industry Rank of 73, putting it in the top 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow DHI in the coming trading sessions, be sure to utilize

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