D.R. Horton Inc. DHI is slated to report results for the second quarter of fiscal 2026 (ended March 31, 2026) on April 21, before the opening bell. The company’s second-quarter performance is expected to have reflected a mix of steady demand execution and ongoing affordability-driven pressures seen in the first quarter.
In the last quarter, the company’s earnings and revenues beat the Zacks Consensus Estimate by 4.1% and 2.9%, respectively. However, both metrics declined 22.2% and 9.5% from the year-ago figures.
Markedly, D.R. Horton reported better-than-expected earnings in two of the trailing four quarters and missed on two occasions, the average surprise being 2.3%.
How Are Estimates Placed for D.R. Horton Stock?
The Zacks Consensus Estimate for the quarter’s earnings per share (EPS) has declined to $2.15 from $2.16 over the past 60 days. The estimated figure indicates a decline of 16.7% from the year-ago EPS of $2.58.
The consensus mark for revenues is $7.66 billion, indicating a 1% year-over-year decline.
D.R. Horton, Inc. Price and EPS Surprise
D.R. Horton, Inc. price-eps-surprise | D.R. Horton, Inc. Quote
Factors Likely Influencing DHI’s Q2 Topline
A major overhang on the topline remains affordability constraints and cautious consumer sentiment. Management highlighted that new home demand continues to be impacted by elevated mortgage rates and higher ownership costs, which are limiting buyer activity despite stable traffic trends.
On the positive side, volumes are expected to improve sequentially, supported by higher home closings and community count growth. Management has guided for the fiscal second-quarter revenues in the range of $7.3-$7.8 billion with homes closed between 19,700 and 20,200 units. This indicates a recovery from the first quarter and suggests improved spring selling activity. The company’s focus on affordable homes, with pricing below national averages, continues to support demand from first-time buyers and helps sustain order trends.
Additionally, modest growth in net sales orders seen in the first quarter, along with increased housing starts and community expansion, is likely to have supported sequential revenue growth. Strong operational scale, national footprint and flexible lot sourcing also remain supportive of volumes.
However, on a year-over-year basis, top-line growth may remain under pressure. In the prior-year quarter, D.R. Horton reported revenues of $7.7 billion with 19,276 homes closed. The midpoint of current guidance implies relatively flat to slightly higher volumes but limited pricing power. Affordability constraints, elevated mortgage rates and cautious consumer sentiment continue to weigh on demand, leading to slower order growth and lower average selling prices.
Management has also highlighted that demand remains sensitive to interest rate movements and broader economic conditions. Under the Homebuilding segment (which contributed 92% of fiscal 2025 total revenues), the Zacks Consensus Estimate for DHI’s home sales is currently pegged at $19.96 billion for the fiscal second quarter compared with 19.28 billion reported a year ago. The consensus mark for the average selling prices (ASPs) for homes delivered is expected to be $362,000 compared with $373,000 reported a year ago.
Rental Property (which contributed 4.8% of total revenues in fiscal 2025) revenues are expected to be $170 million, which implies a decline from the year-ago level of $237 million.
On the other hand, Forestar (which contributed 4.9% of total revenues in fiscal 2025) revenues are likely to be $373 million, which indicates growth from the year-ago level of $351 million. The Financial Services segment’s (which contributed 2.5% of total revenues in fiscal 2025) revenues are expected to be $206 million, which indicates a decline from the year-ago level of $213 million.
Factors Likely Influencing DHI’s Margins & Bottom Line
Margins are likely to remain under pressure in the fiscal second quarter due to higher incentives and rising lot costs. Management expects home sales gross margin at 19–19.5%, down both sequentially and year over year, as incentives stay elevated to support demand amid affordability challenges.
While construction costs have stabilized, higher lot costs and limited SG&A leverage may weigh on profitability. Overall, results are expected to reflect steady volume growth offset by margin headwinds.
The Zacks Consensus Estimate for income before income taxes in the company’s Homebuilding segment is currently $736 million, down from $935 million reported a year ago.
Orders & Backlog
For the fiscal second quarter, the consensus estimate suggests net sales orders will rise 6.2% year over year to 23,826 units. The same for backlog is currently pegged at 15,307 units, which indicates 8.1% growth from a year ago. The value of the backlog is expected to be $5.73 billion, implying growth from $5.48 billion a year ago.
What the Zacks Model Unveils for DHI
Our proven model does not conclusively predict an earnings beat for D.R. Horton this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.
Earnings ESP: DHI has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank of 3.
Stocks Poised to Beat Earnings
Here are some companies in the Zacks Construction sector which, according to our model, have the right combination of elements to post an earnings beat this season.
Dycom Industries, Inc. DY has an Earnings ESP of +2.13% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dycom’s earnings beat estimates in each of the last four quarters, the average surprise being 17.1%. Dycom’s earnings for the to-be-reported quarter are expected to increase 30.1%.
EMCOR Group, Inc. EME has an Earnings ESP of +1.71% and a Zacks Rank of 3 at present.
For the quarter to be reported, EMCOR’s earnings are expected to increase 8.1%. EMCOR’s earnings beat estimates in three of the last four quarters and missed on one occasion, the average surprise being 10.8%.
Comfort Systems USA FIX currently has an Earnings ESP of +5.42% and a Zacks Rank of 1.
The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 35.2%. Comfort Systems’ earnings for the quarter are expected to increase 51.4%.
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