D.R. Horton, Inc. (DHI) Fair Value & PE Analysis
Residential Construction · NYSE
Current Price
$154.09
PE Ratio (TTM)
14.0x
Intrinsic Value
$129.93
-18.6% margin of safety
What Is D.R. Horton, Inc.'s Fair Value?
As of 2026-06-12, applying a 14.0x earnings multiple to D.R. Horton, Inc.'s (DHI) earnings per share of $11.02 yields a fair value estimate of $129.93 per share, versus a market price of $154.09.
Fair value from earnings multiples is sensitive to the multiple you choose. Across the sensitivity grid the estimate spans $101.65 to $162.97. This is a relative estimate anchored to earnings, not a statement of fact. For a cash flow based view, see the intrinsic value estimate on the DCF page.
How our PE model works · Recalculate in PE mode · DHI intrinsic value (DCF view)
Is D.R. Horton, Inc. (DHI) Overvalued?
At $154.09, DHI trades above its PE-based fair value estimate, meaning the market pays a premium over the applied earnings multiple. By this model the stock looks expensive unless earnings grow into the price.
COMPETITIVE MOAT
↑Scale and Geographic Diversification
D.R. Horton's extensive national footprint across numerous markets provides significant operational efficiencies and reduces reliance on any single region. This broad reach allows them to capitalize on diverse housing demands.
↑Cost Leadership and Efficiency
The company's focus on standardized building processes and bulk purchasing of materials enables them to achieve lower costs than many competitors. This cost advantage is crucial in a price-sensitive industry.
↑Brand Recognition and Trust
D.R. Horton has established a strong reputation for reliability and value over decades of operation. This brand equity can translate into customer preference and a degree of pricing power.
INVESTMENT RISKS
↓Interest Rate Sensitivity
The 'lock-in effect' of higher interest rates directly impacts affordability for new homebuyers. Sustained high rates can significantly dampen demand and pressure sales volumes.
↓Economic Downturn and Housing Cycles
The residential construction industry is highly cyclical and sensitive to broader economic conditions. A recession or significant job losses could lead to a sharp decline in housing demand and prices.
↓Regulatory and Land Development Hurdles
Navigating complex zoning laws, environmental regulations, and securing suitable land for development can be time-consuming and costly. Delays or denials can impede growth plans.
Base case
DHI base case PE valuation
Intrinsic Value
$129.93
Margin of safety
-18.6%
Expected annual return
-3.4%
Base case assumptions: -1.3% annual earnings growth, 14x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the DHI PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for D.R. Horton, Inc. respond.
Open PE Calculator for DHICompany Overview
Established in Arlington, Texas, in 1978, D.R. Horton, Inc. operates as a prominent residential construction enterprise. The company's core business involves acquiring and preparing land, then constructing and marketing homes across a substantial portion of the United States. Its operations span 31 states and 98 distinct markets, covering the East, North, Southeast, South Central, Southwest, and Northwest regions. Under several well-known brand names, including D.R. Horton, America's Builder, Express Homes, Emerald Homes, and Freedom Homes, the firm develops diverse housing types. This includes both individual detached houses and attached residences such as townhomes, duplexes, and triplexes. Beyond its primary homebuilding activities, D.R. Horton offers a range of complementary services. These encompass providing mortgage financing to its clientele, as well as furnishing title insurance, examination, and closing services. The company is also engaged in the development of residential lots. Additionally, D.R. Horton's portfolio extends to the creation, ownership, leasing, and sale of multi-family and single-family rental properties. It also holds non-residential real estate, such as ranch land and related facilities, and manages assets within the energy sector. The company primarily caters to individuals purchasing new homes.
Financial Metrics — DHI PE Stock Valuation Data
PE Ratio (TTM)
14.0x
PEG Ratio
n/m
Earnings Yield
7.15%
ROE (TTM)
13.2%
Revenue/Share (TTM)
$115.83
Dividend Yield
1.14%
Debt/Equity
0.28x
Frequently Asked Questions
What is the PE ratio of DHI?
The trailing twelve-month PE ratio of DHI reflects how much investors pay per dollar of D.R. Horton, Inc.'s earnings. This metric is most useful when compared to Residential Construction peers and the company's own historical range.
Is DHI overvalued based on PE ratio?
DHI's PE of 14.0x combined with a PEG ratio of -0.72 provides a growth-adjusted perspective. DHI has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Residential Construction, a DCF analysis may be more appropriate.
How do I value DHI stock using PE ratio?
To value D.R. Horton, Inc. using PE: (1) Compare the current PE (14.0x) against the Residential Construction median to assess relative pricing, (2) check the PEG ratio (-0.72) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of DHI?
DHI's PEG ratio is -0.72, calculated by dividing the PE ratio (14.0x) by the expected earnings growth rate. Because DHI has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for DHI stock valuation?
PE ratio gives a quick relative read — how DHI is priced versus Residential Construction peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See DHI DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Consumer Cyclical valuationsP/E and DCF value DHI with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.