Residential Construction · NYSE
Current Price
$135.01
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on D.R. Horton, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Open DCF Calculator for DHID.R. Horton, Inc. operates as a homebuilding company in East, North, Southeast, South Central, Southwest, and Northwest regions in the United States. It engages in the acquisition and development of land; and construction and sale of residential homes in 31 states and 98 markets under the names of D.R. Horton, America's Builder, Express Homes, Emerald Homes, and Freedom Homes. The company constructs and sells single-family detached homes; and attached homes, such as town homes, duplexes, and triplexes. It also provides mortgage financing services; and title insurance policies, and examination and closing services, as well as engages in the residential lot development business. In addition, the company develops, constructs, owns, leases, and sells multi-family and single-family rental properties; owns non-residential real estate, including ranch land and improvements; and owns and operates energy related assets. It primarily serves homebuyers. D.R. Horton, Inc. was founded in 1978 and is headquartered in Arlington, Texas.
ROIC (TTM)
9.7%
ROE (TTM)
13.2%
FCF Yield
9.13%
Based on trailing twelve-month data, DHI shows a free cash flow per share of N/A and a ROIC of 9.7%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 9.13% are important context metrics when evaluating DHI's stock valuation relative to peers.
The intrinsic value of DHI depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether DHI is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $135.01. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on D.R. Horton, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Residential Construction industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting DHI's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For D.R. Horton, Inc., this means projecting how much free cash flow the Residential Construction will produce over the next 5-10 years, then discounting those amounts to today's dollars. DHI's ROIC of 9.7% shows moderate capital returns.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For DHI, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
