Intrinsic value of D.R. Horton - DHI

Previous Close

$36.83

  Intrinsic Value

$116.35

stock screener

  Rating & Target

str. buy

+216%

  Value-price divergence*

+294%

Previous close

$36.83

 
Intrinsic value

$116.35

 
Up/down potential

+216%

 
Rating

str. buy

 
Value-price divergence*

+294%

*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 13.7

 

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
  17.40
  16.16
  15.04
  14.04
  13.14
  12.32
  11.59
  10.93
  10.34
  9.80
  9.32
  8.89
  8.50
  8.15
  7.84
  7.55
  7.30
  7.07
  6.86
  6.68
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
Revenue, $m
  12,157
  14,272
  16,579
  19,073
  21,751
  24,608
  27,640
  30,843
  34,215
  37,752
  41,453
  45,318
  49,347
  53,543
  57,907
  62,446
  67,162
  72,063
  77,157
  82,451
  87,954
  93,678
  99,633
  105,831
  112,286
  119,011
  126,021
  133,331
  140,959
  148,922
  157,238
Variable operating expenses, $m
 
  11,802
  13,708
  15,769
  17,981
  20,342
  22,848
  25,495
  28,281
  31,204
  34,262
  37,448
  40,778
  44,245
  47,851
  51,601
  55,499
  59,549
  63,758
  68,132
  72,680
  77,410
  82,331
  87,453
  92,786
  98,344
  104,136
  110,177
  116,481
  123,060
  129,932
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
  12,585
  14,511
  16,592
  18,824
  21,206
  23,734
  26,403
  29,212
  32,158
  35,240
  38,450
  41,805
  45,298
  48,931
  52,707
  56,633
  60,712
  64,950
  69,353
  73,932
  78,693
  83,646
  88,801
  94,168
  99,760
  105,588
  111,665
  118,006
  124,623
  131,535
Operating income, $m
  1,354
  1,687
  2,068
  2,481
  2,926
  3,401
  3,906
  4,440
  5,003
  5,594
  6,213
  6,867
  7,542
  8,245
  8,977
  9,738
  10,529
  11,352
  12,207
  13,097
  14,022
  14,985
  15,987
  17,030
  18,117
  19,251
  20,433
  21,666
  22,953
  24,298
  25,703
EBITDA, $m
  1,415
  1,715
  2,100
  2,516
  2,964
  3,443
  3,953
  4,491
  5,059
  5,655
  6,279
  6,931
  7,611
  8,320
  9,058
  9,825
  10,623
  11,453
  12,315
  13,212
  14,145
  15,116
  16,126
  17,178
  18,275
  19,417
  20,609
  21,853
  23,151
  24,507
  25,923
Interest expense (income), $m
  0
  114
  144
  175
  210
  246
  286
  327
  371
  418
  466
  517
  570
  625
  683
  743
  805
  870
  937
  1,007
  1,080
  1,156
  1,234
  1,316
  1,401
  1,490
  1,582
  1,678
  1,779
  1,884
  1,993
Earnings before tax, $m
  1,354
  1,573
  1,925
  2,306
  2,716
  3,155
  3,620
  4,113
  4,632
  5,176
  5,746
  6,350
  6,972
  7,620
  8,294
  8,995
  9,724
  10,482
  11,270
  12,089
  12,942
  13,829
  14,753
  15,714
  16,716
  17,761
  18,850
  19,987
  21,175
  22,414
  23,710
Tax expense, $m
  468
  425
  520
  623
  733
  852
  977
  1,110
  1,251
  1,398
  1,552
  1,715
  1,882
  2,057
  2,239
  2,429
  2,625
  2,830
  3,043
  3,264
  3,494
  3,734
  3,983
  4,243
  4,513
  4,795
  5,090
  5,397
  5,717
  6,052
  6,402
Net income, $m
  886
  1,148
  1,405
  1,683
  1,983
  2,303
  2,643
  3,002
  3,381
  3,779
  4,195
  4,636
  5,090
  5,562
  6,054
  6,566
  7,098
  7,652
  8,227
  8,825
  9,448
  10,095
  10,769
  11,471
  12,203
  12,965
  13,761
  14,591
  15,457
  16,363
  17,308

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
  12,044
  13,990
  16,095
  18,355
  20,766
  23,325
  26,028
  28,873
  31,858
  34,981
  38,243
  41,643
  45,184
  48,867
  52,697
  56,677
  60,813
  65,111
  69,579
  74,223
  79,053
  84,078
  89,309
  94,756
  100,431
  106,347
  112,516
  118,953
  125,673
  132,690
Adjusted assets (=assets-cash), $m
  10,256
  12,044
  13,990
  16,095
  18,355
  20,766
  23,325
  26,028
  28,873
  31,858
  34,981
  38,243
  41,643
  45,184
  48,867
  52,697
  56,677
  60,813
  65,111
  69,579
  74,223
  79,053
  84,078
  89,309
  94,756
  100,431
  106,347
  112,516
  118,953
  125,673
  132,690
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
  200
  232
  267
  305
  345
  387
  432
  479
  529
  580
  634
  691
  750
  811
  874
  940
  1,009
  1,080
  1,154
  1,231
  1,311
  1,395
  1,482
  1,572
  1,666
  1,764
  1,867
  1,973
  2,085
  2,201
Working capital, $m
  0
  -1,427
  -1,658
  -1,907
  -2,175
  -2,461
  -2,764
  -3,084
  -3,421
  -3,775
  -4,145
  -4,532
  -4,935
  -5,354
  -5,791
  -6,245
  -6,716
  -7,206
  -7,716
  -8,245
  -8,795
  -9,368
  -9,963
  -10,583
  -11,229
  -11,901
  -12,602
  -13,333
  -14,096
  -14,892
  -15,724
Total debt, $m
  3,271
  4,106
  5,011
  5,989
  7,040
  8,161
  9,351
  10,608
  11,931
  13,319
  14,771
  16,288
  17,869
  19,515
  21,228
  23,009
  24,860
  26,783
  28,782
  30,859
  33,019
  35,265
  37,601
  40,034
  42,567
  45,205
  47,956
  50,825
  53,818
  56,943
  60,206
Total liabilities, $m
  4,766
  5,601
  6,506
  7,484
  8,535
  9,656
  10,846
  12,103
  13,426
  14,814
  16,266
  17,783
  19,364
  21,010
  22,723
  24,504
  26,355
  28,278
  30,277
  32,354
  34,514
  36,760
  39,096
  41,529
  44,062
  46,700
  49,451
  52,320
  55,313
  58,438
  61,701
Total equity, $m
  6,793
  6,444
  7,485
  8,611
  9,820
  11,110
  12,479
  13,925
  15,447
  17,044
  18,715
  20,460
  22,279
  24,173
  26,144
  28,193
  30,322
  32,535
  34,834
  37,225
  39,709
  42,293
  44,982
  47,780
  50,694
  53,731
  56,895
  60,196
  63,640
  67,235
  70,989
Total liabilities and equity, $m
  11,559
  12,045
  13,991
  16,095
  18,355
  20,766
  23,325
  26,028
  28,873
  31,858
  34,981
  38,243
  41,643
  45,183
  48,867
  52,697
  56,677
  60,813
  65,111
  69,579
  74,223
  79,053
  84,078
  89,309
  94,756
  100,431
  106,346
  112,516
  118,953
  125,673
  132,690
Debt-to-equity ratio
  0.482
  0.640
  0.670
  0.700
  0.720
  0.730
  0.750
  0.760
  0.770
  0.780
  0.790
  0.800
  0.800
  0.810
  0.810
  0.820
  0.820
  0.820
  0.830
  0.830
  0.830
  0.830
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  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
  1,148
  1,405
  1,683
  1,983
  2,303
  2,643
  3,002
  3,381
  3,779
  4,195
  4,636
  5,090
  5,562
  6,054
  6,566
  7,098
  7,652
  8,227
  8,825
  9,448
  10,095
  10,769
  11,471
  12,203
  12,965
  13,761
  14,591
  15,457
  16,363
  17,308
Depreciation, amort., depletion, $m
  61
  28
  31
  35
  38
  42
  47
  51
  56
  61
  66
  63
  69
  75
  81
  87
  94
  101
  108
  115
  123
  131
  139
  148
  157
  167
  176
  187
  197
  208
  220
Funds from operations, $m
  135
  1,176
  1,436
  1,718
  2,021
  2,345
  2,689
  3,053
  3,437
  3,839
  4,261
  4,699
  5,159
  5,637
  6,135
  6,654
  7,192
  7,753
  8,335
  8,941
  9,571
  10,226
  10,909
  11,620
  12,360
  13,132
  13,937
  14,778
  15,655
  16,571
  17,528
Change in working capital, $m
  -483
  -212
  -231
  -249
  -268
  -286
  -303
  -320
  -337
  -354
  -370
  -386
  -403
  -420
  -436
  -454
  -472
  -490
  -509
  -529
  -550
  -572
  -595
  -620
  -645
  -672
  -701
  -731
  -763
  -796
  -832
Cash from operations, $m
  618
  1,388
  1,667
  1,968
  2,289
  2,631
  2,993
  3,374
  3,774
  4,193
  4,631
  5,086
  5,562
  6,057
  6,572
  7,107
  7,664
  8,243
  8,844
  9,470
  10,121
  10,799
  11,504
  12,239
  13,006
  13,805
  14,638
  15,509
  16,418
  17,367
  18,360
Maintenance CAPEX, $m
  0
  -17
  -20
  -23
  -27
  -30
  -34
  -39
  -43
  -48
  -53
  -58
  -63
  -69
  -75
  -81
  -87
  -94
  -101
  -108
  -115
  -123
  -131
  -139
  -148
  -157
  -167
  -176
  -187
  -197
  -208
New CAPEX, $m
  -86
  -29
  -32
  -35
  -37
  -40
  -42
  -45
  -47
  -50
  -52
  -54
  -56
  -59
  -61
  -64
  -66
  -69
  -71
  -74
  -77
  -80
  -83
  -87
  -90
  -94
  -98
  -102
  -107
  -111
  -116
Cash from investing activities, $m
  -113
  -46
  -52
  -58
  -64
  -70
  -76
  -84
  -90
  -98
  -105
  -112
  -119
  -128
  -136
  -145
  -153
  -163
  -172
  -182
  -192
  -203
  -214
  -226
  -238
  -251
  -265
  -278
  -294
  -308
  -324
Free cash flow, $m
  505
  1,342
  1,615
  1,909
  2,225
  2,561
  2,916
  3,290
  3,684
  4,096
  4,526
  4,974
  5,442
  5,929
  6,436
  6,963
  7,511
  8,080
  8,672
  9,288
  9,929
  10,595
  11,290
  12,013
  12,767
  13,553
  14,374
  15,230
  16,124
  17,058
  18,035
Issuance/(repayment) of debt, $m
  -550
  835
  905
  979
  1,051
  1,121
  1,190
  1,257
  1,323
  1,388
  1,452
  1,517
  1,581
  1,646
  1,713
  1,781
  1,851
  1,923
  1,999
  2,077
  2,160
  2,246
  2,337
  2,432
  2,533
  2,639
  2,751
  2,869
  2,993
  3,125
  3,263
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
  835
  905
  979
  1,051
  1,121
  1,190
  1,257
  1,323
  1,388
  1,452
  1,517
  1,581
  1,646
  1,713
  1,781
  1,851
  1,923
  1,999
  2,077
  2,160
  2,246
  2,337
  2,432
  2,533
  2,639
  2,751
  2,869
  2,993
  3,125
  3,263
Total cash flow (excl. dividends), $m
  38
  2,176
  2,520
  2,888
  3,276
  3,682
  4,106
  4,547
  5,007
  5,484
  5,979
  6,490
  7,023
  7,575
  8,149
  8,743
  9,361
  10,003
  10,671
  11,365
  12,088
  12,841
  13,627
  14,445
  15,300
  16,192
  17,124
  18,099
  19,117
  20,183
  21,298
Retained Cash Flow (-), $m
  -899
  -954
  -1,041
  -1,126
  -1,209
  -1,290
  -1,369
  -1,446
  -1,522
  -1,597
  -1,671
  -1,745
  -1,819
  -1,894
  -1,971
  -2,049
  -2,129
  -2,213
  -2,300
  -2,390
  -2,485
  -2,584
  -2,689
  -2,798
  -2,914
  -3,036
  -3,165
  -3,301
  -3,444
  -3,595
  -3,754
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
 
  2,526
  1,478
  1,762
  2,067
  2,392
  2,737
  3,101
  3,485
  3,887
  4,308
  4,745
  5,204
  5,681
  6,178
  6,695
  7,232
  7,791
  8,371
  8,975
  9,604
  10,257
  10,938
  11,647
  12,386
  13,156
  13,959
  14,798
  15,673
  16,588
  17,544
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
 
  2,422
  1,353
  1,533
  1,702
  1,854
  1,986
  2,095
  2,178
  2,233
  2,258
  2,253
  2,221
  2,160
  2,074
  1,965
  1,838
  1,695
  1,542
  1,382
  1,220
  1,061
  908
  763
  631
  512
  407
  318
  242
  181
  132
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 15.5
Price to Sales 1.1
Price to Book 2
Price to Tangible Book
Price to Cash Flow 22.2
Price to Free Cash Flow 25.8
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 17.4% 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 10 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%. 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 373.006 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 $13.7 billion.

RELATED COMPANIES Price Int.Val. Rating
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TMHC Taylor Morriso 22.11 84.17  str.buy
LGIH LGI Homes 46.81 35.36  hold
CHCI Comstock Holdi 1.99 5.74  str.buy
TOL Toll Brothers 39.70 77.40  str.buy
UCP UCP Cl A 11.44 93.48  str.buy
PICO PICO Holdings 16.45 68.01  str.buy
KBH KB Home 23.59 65.01  str.buy
LEN Lennar Cl A 54.09 119.06  str.buy

COMPANY NEWS

▶ July Housing Starts Weaker Than Expected   [07:14AM  Investor's Business Daily]
▶ ETFs with exposure to D.R. Horton, Inc. : August 11, 2017   [Aug-11-17 05:16PM  Capital Cube]
▶ D.R. Horton Is Building Toward the $50 Mark   [Aug-03-17 04:01PM  TheStreet.com]
▶ As Homebuilders Wrap Up Earnings Season, 3 Key Names Yet To Report   [Jul-31-17 07:00PM  Investor's Business Daily]
▶ New Home Sales Up in June   [Jul-27-17 06:38PM  GuruFocus.com]
▶ D.R. Horton tops Street 3Q forecasts   [Jul-26-17 09:55PM  Associated Press]
▶ Top-Rated Stock In Top-10 Group Just Beat Earnings Views   [04:24PM  Investor's Business Daily]
▶ U.S. home sales stumble as prices hit record high   [Jul-24-17 12:57PM  Reuters]
▶ Don't Be Greedy! Take What The Market Will Give You   [Jul-21-17 03:40PM  Investor's Business Daily]
▶ National homebuilder to pay Miami-Dade condo association $11M in settlement   [Jul-13-17 12:43PM  American City Business Journals]
▶ No. 2-Ranked Homebuilder Constructs Successful Breakout   [Jul-11-17 04:27PM  Investor's Business Daily]
▶ This Top-Ranked Industry Just Got A Slew Of Stock Rating Upgrades   [Jul-10-17 04:26PM  Investor's Business Daily]
▶ The Hot Stock: D.R. Horton Gains 3.8%   [Jul-07-17 05:00PM  Barrons.com]
▶ These 2 Stocks With 95+ Composite Ratings Enter Buy Zones   [04:24PM  Investor's Business Daily]
▶ As Homebuilders Show Strength, This Breakout Stock Gets Upgraded   [Jul-03-17 12:32PM  Investor's Business Daily]
▶ D.R. Horton, Forestar Group to merge under new $560M agreement by year's end   [Jun-29-17 12:10PM  American City Business Journals]
▶ KB Home Uptrend Accelerates After Positive Earnings   [Jun-28-17 11:04AM  Investopedia]
▶ KB Home Earnings, Revenue Beat As These 4 Builders Near Buy Points   [Jun-27-17 04:54PM  Investor's Business Daily]
▶ D.R. Horton ups bid for Forestar, emerges with inside track on buyout   [Jun-23-17 03:49PM  American City Business Journals]
▶ D.R. Horton ups the ante to land Forestar in key acquisition deal   [02:45PM  American City Business Journals]
▶ Starwood raises bid for Austin's Forestar   [Jun-22-17 11:20AM  American City Business Journals]
▶ Homebuilder Stocks To Watch And Housing Market & Real Estate News   [Jun-21-17 10:30AM  Investor's Business Daily]
▶ Housing Industry Stock Outlook - June 2017   [Jun-15-17 05:43PM  Zacks]
▶ Beazer Homes: Time To Hit The Buy Button?   [09:54AM  Barrons.com]
▶ Breakout Watch: Top Homebuilder Stock Still Just With Buy Range   [Jun-14-17 04:40PM  Investor's Business Daily]
▶ Forestar reverses course, warms up to D.R. Horton's $520M takeover bid   [09:50AM  American City Business Journals]
▶ Stock Market News for June 06, 2017   [Jun-06-17 09:58AM  Zacks]
▶ Why Forestar Shares Are Making a Run   [10:45AM  24/7 Wall St.]
▶ Story Stocks from Briefing.com   [09:59AM  Briefing.com]
▶ Stocks to Watch: Apple, Snap, Herbalife   [09:43AM  The Wall Street Journal]
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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