Is D R Horton Inc (DHI) Stock Trading Below Fair Value?

D R Horton Inc (DHI) receives a strong valuation score of 79 from InvestorsObserver analysis. Our proprietary scoring system considers the overall health of the company by looking at the stock's price, earnings, and growth rate to determine if it represents a good value. DHI holds a better value than 79% of stocks at its current price. Investors who are focused on long-term growth through buy-and-hold investing will find the Valuation Rank especially relevant when allocating their assets.

DHI gets a 79 Valuation Rank today. Find out what this means to you and get the rest of the rankings on DHI!

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Metrics Analysis

DHI has a trailing twelve month Price to Earnings (PE) ratio of 8.5. The historical average of roughly 15 shows a good value for DHI stock as investors are paying lower share prices relative to the company's earnings. DHI's low trailing PE ratio shows that the firm has been trading below its fair market value recently. Its trailing 12-month earnings per share (EPS) of 9.97 more than justifies the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings. DHI has a 12 month forward PE to Growth (PEG) ratio of 0.71. Markets are overvaluing DHI in relation to its projected growth as its PEG ratio is currently above the fair market value of 1. 9.97000026's PEG comes from its forward price to earnings ratio being divided by its growth rate. PEG ratios are one of the most used valuation metrics due to its incorporation of more company fundamentals metrics and a focus on the firm's future rather than its past.

Summary

All together these valuation metrics paint a pretty strong picture for DHI at its current price due to a undervalued PEG ratio despite strong growth. The PE and PEG for DHI are better than the average of the market resulting in a valuation score of 79. Click Here to get the full Report on D R Horton Inc (DHI) stock.