InvestorsObserver gives D. R. Horton Inc (DHI) a strong valuation score of 86 from its analysis. The proprietary scoring system considers the underlying health of a company by analyzing its stock price, earnings, and growth rate. DHI currently holds a better value than 86% of stocks based on these metrics. Long term investors focused on buying-and-holding should find the valuation ranking system most relevant when making investment decisions.
Metrics Analysis
DHI has a trailing twelve month Price to Earnings (PE) ratio of 10.7. The historical average of roughly 15 shows a average value for DHI stock as investors are paying fair share prices relative to the company's earnings. DHI's average trailing PE ratio shows that the firm has been trading around its fair market value recently. Its trailing 12-month earnings per share (EPS) of 8.63 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 0.8. Markets are undervaluing DHI in relation to its projected growth as its PEG ratio is currently below the fair market value of 1. 8.63000011'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
DHI's valuation metrics are adequate at its current price due to a fairly valued PEG ratio despite strong growth. DHI's PE and PEG are around the market average resulting in a average valuation score.
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