D.R. Horton, Inc. (DHI) DCF Valuation
TGM's two-stage DCF values D.R. Horton, Inc. (DHI) between $96.25 and $162.61 depending on assumptions, with a base case of $124.23. Growth is taken from the company's own record (5-year revenue CAGR (FCF growth too volatile to use)), fading to 2.5% long-run; the discount rate (10.9%) reflects its beta.
What would today's price require?
$156.33 is justified only if free cash flow grows about +12.1% a year (fading to 2.5% long-run) at a 10.9% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 3.7%/yr | 11.9% | $96.25 |
| Base case | 6.7%/yr | 10.9% | $124.23 |
| Optimistic | 9.7%/yr | 9.9% | $162.61 |
| Analyst DCF (FMP) | independent reference — different model | $126.05 | |
Current Price
$156.33
Market-Implied Growth
+12.1%/yr
vs +6.7% 5Y actual
Model Scenario Range
$96.25 – $162.61
model output — not a price target
DHI DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for DHI (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $2.7B · 0.28B shares · net debt $3.0B
Estimated Fair Value
$143.27
-8.4% vs $156.33
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 6.7%/yr FCF growth and 10-year horizon fixed. Green = above today's $156.33; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.9% | $178 | $186 | $196 | $207 | $220 |
| 9.9% | $153 | $159 | $166 | $173 | $182 |
| 10.9% | $134 | $139 | $143 | $149 | $155 |
| 11.9% | $119 | $122 | $126 | $130 | $134 |
| 12.9% | $106 | $109 | $111 | $114 | $118 |
About D.R. Horton, Inc.
Established in Arlington, Texas, in 1978, D.R. Horton, Inc. operates as a prominent residential construction enterprise. The company's core business involves acquiring and preparing land, then constructing and marketing homes across a substantial portion of the United States. Its operations span 31 states and 98 distinct markets, covering the East, North, Southeast, South Central, Southwest, and Northwest regions. Under several well-known brand names, including D.R. Horton, America's Builder, Express Homes, Emerald Homes, and Freedom Homes, the firm develops diverse housing types. This includes both individual detached houses and attached residences such as townhomes, duplexes, and triplexes. Beyond its primary homebuilding activities, D.R. Horton offers a range of complementary services. These encompass providing mortgage financing to its clientele, as well as furnishing title insurance, examination, and closing services. The company is also engaged in the development of residential lots. Additionally, D.R. Horton's portfolio extends to the creation, ownership, leasing, and sale of multi-family and single-family rental properties. It also holds non-residential real estate, such as ranch land and related facilities, and manages assets within the energy sector. The company primarily caters to individuals purchasing new homes.
- Sector
- Consumer Cyclical
- Industry
- Residential Construction
- CEO
- Paul J. Romanowski