Intrinsic value of D.R. Horton - DHI

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$32.89

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$32.89

 
Intrinsic value

$140.89

 
Up/down potential

+328%

 
Rating

str. buy

 
Value-price divergence* premium content

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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of DHI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 12.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  12.32
  20.20
  18.68
  17.31
  16.08
  14.97
  13.98
  13.08
  12.27
  11.54
  10.89
  10.30
  9.77
  9.29
  8.86
  8.48
  8.13
  7.82
  7.53
  7.28
  7.05
  6.85
  6.66
  6.50
  6.35
  6.21
  6.09
  5.98
  5.88
  5.80
  5.72
Revenue, $m
  12,157
  14,613
  17,342
  20,345
  23,616
  27,152
  30,947
  34,994
  39,288
  43,823
  48,595
  53,600
  58,837
  64,304
  70,004
  75,938
  82,112
  88,530
  95,201
  102,133
  109,337
  116,824
  124,608
  132,704
  141,127
  149,894
  159,025
  168,538
  178,454
  188,796
  199,588
Variable operating expenses, $m
 
  12,083
  14,339
  16,820
  19,523
  22,445
  25,581
  28,925
  32,473
  36,221
  40,164
  44,292
  48,619
  53,137
  57,847
  62,751
  67,853
  73,156
  78,669
  84,397
  90,350
  96,537
  102,969
  109,659
  116,619
  123,864
  131,409
  139,270
  147,464
  156,010
  164,928
Fixed operating expenses, $m
 
  783
  803
  823
  843
  864
  886
  908
  931
  954
  978
  1,002
  1,027
  1,053
  1,080
  1,106
  1,134
  1,163
  1,192
  1,221
  1,252
  1,283
  1,315
  1,348
  1,382
  1,416
  1,452
  1,488
  1,525
  1,563
  1,603
Total operating expenses, $m
  10,804
  12,866
  15,142
  17,643
  20,366
  23,309
  26,467
  29,833
  33,404
  37,175
  41,142
  45,294
  49,646
  54,190
  58,927
  63,857
  68,987
  74,319
  79,861
  85,618
  91,602
  97,820
  104,284
  111,007
  118,001
  125,280
  132,861
  140,758
  148,989
  157,573
  166,531
Operating income, $m
  1,354
  1,747
  2,201
  2,702
  3,250
  3,843
  4,480
  5,161
  5,884
  6,648
  7,453
  8,306
  9,190
  10,114
  11,077
  12,081
  13,125
  14,211
  15,341
  16,515
  17,735
  19,004
  20,324
  21,697
  23,126
  24,614
  26,164
  27,780
  29,465
  31,223
  33,057
EBITDA, $m
  1,415
  1,795
  2,258
  2,767
  3,324
  3,927
  4,575
  5,267
  6,002
  6,779
  7,597
  8,456
  9,355
  10,294
  11,273
  12,293
  13,355
  14,459
  15,607
  16,801
  18,041
  19,331
  20,673
  22,068
  23,521
  25,034
  26,609
  28,252
  29,964
  31,751
  33,616
Interest expense (income), $m
  0
  114
  148
  186
  227
  272
  321
  373
  428
  487
  550
  615
  684
  756
  831
  909
  991
  1,075
  1,164
  1,255
  1,350
  1,449
  1,552
  1,659
  1,770
  1,886
  2,006
  2,132
  2,262
  2,399
  2,541
Earnings before tax, $m
  1,354
  1,632
  2,053
  2,516
  3,023
  3,571
  4,160
  4,788
  5,456
  6,161
  6,903
  7,691
  8,506
  9,358
  10,246
  11,172
  12,135
  13,136
  14,177
  15,260
  16,385
  17,555
  18,772
  20,038
  21,356
  22,728
  24,158
  25,648
  27,202
  28,824
  30,517
Tax expense, $m
  468
  441
  554
  679
  816
  964
  1,123
  1,293
  1,473
  1,663
  1,864
  2,076
  2,297
  2,527
  2,767
  3,016
  3,276
  3,547
  3,828
  4,120
  4,424
  4,740
  5,068
  5,410
  5,766
  6,137
  6,523
  6,925
  7,345
  7,782
  8,240
Net income, $m
  886
  1,191
  1,498
  1,837
  2,207
  2,607
  3,036
  3,495
  3,983
  4,497
  5,039
  5,614
  6,209
  6,831
  7,480
  8,155
  8,858
  9,589
  10,349
  11,140
  11,961
  12,815
  13,703
  14,628
  15,590
  16,591
  17,635
  18,723
  19,858
  21,041
  22,277

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,303
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  11,559
  12,331
  14,635
  17,169
  19,929
  22,913
  26,116
  29,531
  33,154
  36,981
  41,008
  45,232
  49,651
  54,265
  59,075
  64,083
  69,293
  74,709
  80,338
  86,188
  92,267
  98,586
  105,155
  111,986
  119,094
  126,493
  134,198
  142,226
  150,594
  159,322
  168,429
Adjusted assets (=assets-cash), $m
  10,256
  12,331
  14,635
  17,169
  19,929
  22,913
  26,116
  29,531
  33,154
  36,981
  41,008
  45,232
  49,651
  54,265
  59,075
  64,083
  69,293
  74,709
  80,338
  86,188
  92,267
  98,586
  105,155
  111,986
  119,094
  126,493
  134,198
  142,226
  150,594
  159,322
  168,429
Revenue / Adjusted assets
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
  1.185
Average production assets, $m
  171
  205
  243
  285
  331
  380
  433
  490
  550
  614
  680
  750
  824
  900
  980
  1,063
  1,150
  1,239
  1,333
  1,430
  1,531
  1,636
  1,745
  1,858
  1,976
  2,099
  2,226
  2,360
  2,498
  2,643
  2,794
Working capital, $m
  0
  -1,564
  -1,856
  -2,177
  -2,527
  -2,905
  -3,311
  -3,744
  -4,204
  -4,689
  -5,200
  -5,735
  -6,296
  -6,881
  -7,490
  -8,125
  -8,786
  -9,473
  -10,187
  -10,928
  -11,699
  -12,500
  -13,333
  -14,199
  -15,101
  -16,039
  -17,016
  -18,034
  -19,095
  -20,201
  -21,356
Total debt, $m
  3,271
  4,239
  5,310
  6,488
  7,772
  9,160
  10,649
  12,237
  13,922
  15,701
  17,574
  19,538
  21,593
  23,738
  25,975
  28,304
  30,726
  33,245
  35,862
  38,582
  41,409
  44,347
  47,402
  50,579
  53,884
  57,324
  60,907
  64,640
  68,531
  72,590
  76,824
Total liabilities, $m
  4,766
  5,734
  6,805
  7,983
  9,267
  10,655
  12,144
  13,732
  15,417
  17,196
  19,069
  21,033
  23,088
  25,233
  27,470
  29,799
  32,221
  34,740
  37,357
  40,077
  42,904
  45,842
  48,897
  52,074
  55,379
  58,819
  62,402
  66,135
  70,026
  74,085
  78,319
Total equity, $m
  6,793
  6,597
  7,830
  9,185
  10,662
  12,259
  13,972
  15,799
  17,738
  19,785
  21,939
  24,199
  26,563
  29,032
  31,605
  34,284
  37,072
  39,969
  42,981
  46,111
  49,363
  52,743
  56,258
  59,913
  63,715
  67,674
  71,796
  76,091
  80,568
  85,237
  90,109
Total liabilities and equity, $m
  11,559
  12,331
  14,635
  17,168
  19,929
  22,914
  26,116
  29,531
  33,155
  36,981
  41,008
  45,232
  49,651
  54,265
  59,075
  64,083
  69,293
  74,709
  80,338
  86,188
  92,267
  98,585
  105,155
  111,987
  119,094
  126,493
  134,198
  142,226
  150,594
  159,322
  168,428
Debt-to-equity ratio
  0.482
  0.640
  0.680
  0.710
  0.730
  0.750
  0.760
  0.770
  0.780
  0.790
  0.800
  0.810
  0.810
  0.820
  0.820
  0.830
  0.830
  0.830
  0.830
  0.840
  0.840
  0.840
  0.840
  0.840
  0.850
  0.850
  0.850
  0.850
  0.850
  0.850
  0.850
Adjusted equity ratio
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  886
  1,191
  1,498
  1,837
  2,207
  2,607
  3,036
  3,495
  3,983
  4,497
  5,039
  5,614
  6,209
  6,831
  7,480
  8,155
  8,858
  9,589
  10,349
  11,140
  11,961
  12,815
  13,703
  14,628
  15,590
  16,591
  17,635
  18,723
  19,858
  21,041
  22,277
Depreciation, amort., depletion, $m
  61
  49
  57
  65
  74
  84
  95
  106
  118
  131
  144
  150
  165
  180
  196
  213
  230
  248
  267
  286
  306
  327
  349
  372
  395
  420
  445
  472
  500
  529
  559
Funds from operations, $m
  135
  1,240
  1,555
  1,902
  2,281
  2,691
  3,131
  3,601
  4,101
  4,628
  5,184
  5,764
  6,374
  7,011
  7,676
  8,368
  9,088
  9,837
  10,616
  11,426
  12,267
  13,142
  14,052
  14,999
  15,985
  17,011
  18,080
  19,195
  20,357
  21,570
  22,836
Change in working capital, $m
  -483
  -263
  -292
  -321
  -350
  -378
  -406
  -433
  -459
  -485
  -511
  -536
  -560
  -585
  -610
  -635
  -661
  -687
  -714
  -742
  -771
  -801
  -833
  -866
  -901
  -938
  -977
  -1,018
  -1,061
  -1,107
  -1,155
Cash from operations, $m
  618
  1,527
  1,847
  2,223
  2,631
  3,069
  3,537
  4,034
  4,560
  5,113
  5,694
  6,300
  6,935
  7,596
  8,286
  9,003
  9,749
  10,524
  11,330
  12,167
  13,038
  13,943
  14,885
  15,865
  16,886
  17,949
  19,057
  20,213
  21,418
  22,677
  23,991
Maintenance CAPEX, $m
  0
  -34
  -41
  -49
  -57
  -66
  -76
  -87
  -98
  -110
  -123
  -136
  -150
  -165
  -180
  -196
  -213
  -230
  -248
  -267
  -286
  -306
  -327
  -349
  -372
  -395
  -420
  -445
  -472
  -500
  -529
New CAPEX, $m
  -86
  -34
  -38
  -42
  -46
  -50
  -53
  -57
  -60
  -63
  -67
  -70
  -73
  -77
  -80
  -83
  -86
  -90
  -93
  -97
  -101
  -105
  -109
  -113
  -118
  -123
  -128
  -133
  -139
  -145
  -151
Cash from investing activities, $m
  -113
  -68
  -79
  -91
  -103
  -116
  -129
  -144
  -158
  -173
  -190
  -206
  -223
  -242
  -260
  -279
  -299
  -320
  -341
  -364
  -387
  -411
  -436
  -462
  -490
  -518
  -548
  -578
  -611
  -645
  -680
Free cash flow, $m
  505
  1,459
  1,768
  2,133
  2,528
  2,953
  3,408
  3,891
  4,402
  4,940
  5,505
  6,094
  6,711
  7,355
  8,026
  8,724
  9,450
  10,204
  10,988
  11,804
  12,651
  13,532
  14,449
  15,403
  16,397
  17,431
  18,510
  19,634
  20,808
  22,032
  23,311
Issuance/(repayment) of debt, $m
  -550
  968
  1,071
  1,178
  1,284
  1,388
  1,489
  1,588
  1,685
  1,780
  1,872
  1,964
  2,055
  2,146
  2,237
  2,329
  2,422
  2,519
  2,618
  2,720
  2,827
  2,938
  3,055
  3,177
  3,305
  3,440
  3,583
  3,733
  3,891
  4,058
  4,235
Issuance/(repurchase) of shares, $m
  72
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -467
  968
  1,071
  1,178
  1,284
  1,388
  1,489
  1,588
  1,685
  1,780
  1,872
  1,964
  2,055
  2,146
  2,237
  2,329
  2,422
  2,519
  2,618
  2,720
  2,827
  2,938
  3,055
  3,177
  3,305
  3,440
  3,583
  3,733
  3,891
  4,058
  4,235
Total cash flow (excl. dividends), $m
  38
  2,427
  2,839
  3,311
  3,812
  4,341
  4,897
  5,479
  6,087
  6,719
  7,377
  8,058
  8,766
  9,501
  10,263
  11,053
  11,872
  12,723
  13,606
  14,524
  15,478
  16,470
  17,504
  18,580
  19,702
  20,872
  22,093
  23,367
  24,699
  26,091
  27,546
Retained Cash Flow (-), $m
  -899
  -1,107
  -1,232
  -1,355
  -1,477
  -1,596
  -1,713
  -1,827
  -1,939
  -2,047
  -2,154
  -2,260
  -2,364
  -2,469
  -2,573
  -2,679
  -2,787
  -2,898
  -3,012
  -3,130
  -3,252
  -3,380
  -3,514
  -3,655
  -3,803
  -3,958
  -4,122
  -4,295
  -4,477
  -4,669
  -4,872
Prev. year cash balance distribution, $m
 
  1,303
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  2,623
  1,607
  1,955
  2,335
  2,745
  3,184
  3,652
  4,148
  4,672
  5,223
  5,798
  6,402
  7,032
  7,689
  8,373
  9,085
  9,825
  10,594
  11,394
  12,226
  13,090
  13,989
  14,925
  15,899
  16,913
  17,970
  19,072
  20,222
  21,421
  22,674
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  2,515
  1,471
  1,702
  1,922
  2,127
  2,311
  2,467
  2,593
  2,684
  2,738
  2,753
  2,732
  2,674
  2,581
  2,458
  2,309
  2,138
  1,951
  1,754
  1,553
  1,354
  1,161
  978
  810
  658
  524
  409
  313
  234
  171
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

D.R. Horton, Inc. operates as a homebuilding company. It engages in the acquisition and development of land; and construction and sale of homes in 26 states and 78 markets in the United States under the names of D.R. Horton, America’s Builder, Express Homes, Emerald Homes, Regent Homes, Crown Communities, and Pacific Ridge Homes. The company constructs and sells single-family detached homes; and attached homes, such as town homes, duplexes, triplexes, and condominiums. It is also involved in the origination and sale of mortgages; and provision of title insurance policies, and examination and closing services. The company primarily serves title insurance agents, homebuyers, and homebuilding customers. D.R. Horton, Inc. was founded in 1978 and is headquartered in Fort Worth, Texas.

FINANCIAL RATIOS  of  D.R. Horton (DHI)

Valuation Ratios
P/E Ratio 13.8
Price to Sales 1
Price to Book 1.8
Price to Tangible Book
Price to Cash Flow 19.8
Price to Free Cash Flow 23.1
Growth Rates
Sales Growth Rate 12.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 53.6%
Cap. Spend. - 3 Yr. Gr. Rate 8.2%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 48.2%
Total Debt to Equity 48.2%
Interest Coverage 0
Management Effectiveness
Return On Assets 7.8%
Ret/ On Assets - 3 Yr. Avg. 6.8%
Return On Total Capital 9%
Ret/ On T. Cap. - 3 Yr. Avg. 7.9%
Return On Equity 14%
Return On Equity - 3 Yr. Avg. 13.1%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 21.9%
Gross Margin - 3 Yr. Avg. 21.7%
EBITDA Margin 11.6%
EBITDA Margin - 3 Yr. Avg. 11%
Operating Margin 11.1%
Oper. Margin - 3 Yr. Avg. 10.5%
Pre-Tax Margin 11.1%
Pre-Tax Margin - 3 Yr. Avg. 10.6%
Net Profit Margin 7.3%
Net Profit Margin - 3 Yr. Avg. 7%
Effective Tax Rate 34.6%
Eff/ Tax Rate - 3 Yr. Avg. 34%
Payout Ratio 13.4%

DHI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DHI stock intrinsic value calculation we used $12157 million for the last fiscal year's total revenue generated by D.R. Horton. The default revenue input number comes from 2016 income statement of D.R. Horton. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DHI stock valuation model: a) initial revenue growth rate of 20.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for DHI is calculated based on our internal credit rating of D.R. Horton, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of D.R. Horton.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DHI stock the variable cost ratio is equal to 82.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $764 million in the base year in the intrinsic value calculation for DHI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for D.R. Horton.

Corporate tax rate of 27% is the nominal tax rate for D.R. Horton. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DHI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DHI are equal to 1.4%.

Life of production assets of 4.2 years is the average useful life of capital assets used in D.R. Horton operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DHI is equal to -10.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $6793 million for D.R. Horton - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 371.96 million for D.R. Horton is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of D.R. Horton at the current share price and the inputted number of shares is $12.2 billion.


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COMPANY NEWS

▶ ETFs with exposure to D.R. Horton, Inc. : April 28, 2017   [Apr-28-17 03:50PM  Capital Cube]
▶ 10 Best Home Builders in California   [Apr-26-17 06:20PM  Insider Monkey]
▶ Trump's Lumber War Vs. Canada Hammers U.S. Homebuilders   [Apr-25-17 04:10PM  Investor's Business Daily]
▶ D.R. Horton: Down, But Not Out?   [Apr-21-17 10:48AM  Barrons.com]
▶ D.R. Horton Reverses From Buy Point Despite Strong Earnings, Guidance   [Apr-20-17 04:32PM  Investor's Business Daily]
▶ Are Homebuilders Topping Out?   [11:15AM  Investopedia]
▶ D.R. Horton beats Street 2Q forecasts   [07:04AM  Associated Press]
▶ What Not to Miss in D.R. Horton's Earnings Report   [Apr-19-17 06:29PM  Bloomberg Video]
▶ Aurora HOA wins $13.5 million award in dispute with Texas homebuilder   [Apr-11-17 03:55PM  American City Business Journals]
▶ Housing Could Be Ready to Explode: 5 Top Stocks to Buy Now   [Apr-05-17 10:35AM  24/7 Wall St.]
▶ 8 Stocks With Rising Revenue and EPS   [Apr-03-17 05:11PM  GuruFocus.com]
▶ This Homebuilder Is Now Rated Among The Top 4% Of All Stocks   [Mar-30-17 11:34AM  Investor's Business Daily]
▶ [$$] After a Strong 2016, Our Namesake ETF Reshuffles   [Mar-18-17 01:21AM  at Barrons.com]
▶ Homebuilders: Oops, I Did It Again?   [12:56PM  at Barrons.com]
▶ [$$] Millennials Delay the Homeownership Move   [Mar-04-17 02:12AM  at Barrons.com]
▶ [$$] Three Picks in Home Builders for Liquidity   [Mar-02-17 05:27PM  at Barrons.com]
▶ New 91-home development coming to McLeansville   [Feb-06-17 01:00PM  at bizjournals.com]
Stock chart of DHI Financial statements of DHI
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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