Wrapping up Q3 earnings, we look at the numbers and key takeaways for the home builders stocks, including D.R. Horton (NYSE: DHI) and its peers.

Traditionally, homebuilders have built competitive advantages with economies of scale that lead to advantaged purchasing and brand recognition among consumers. Aesthetic trends have always been important in the space, but more recently, energy efficiency and conservation are driving innovation. However, these companies are still at the whim of the macro, specifically interest rates that heavily impact new and existing home sales. In fact, homebuilders are one of the most cyclical subsectors within industrials.

The 11 home builders stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 2.8% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 1.3% on average since the latest earnings results.

D.R. Horton (NYSE: DHI)

One of the largest homebuilding companies in the U.S., D.R. Horton (NYSE: DHI) builds a variety of new construction homes across multiple markets.

D.R. Horton reported revenues of $9.68 billion, down 3.2% year on year. This print exceeded analysts’ expectations by 2.7%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ adjusted operating income estimates.

D.R. Horton scored the highest full-year guidance raise of the whole group. Still, the market seems discontent with the results. The stock is down 23% since reporting and currently trades at $146.04.

Read our full report on D.R. Horton here, it’s free for active Edge members.

Best Q3: Champion Homes (NYSE: SKY)

Founded in 1951, Champion Homes (NYSE: SKY) is a manufacturer of modular homes and buildings in North America.

Champion Homes reported revenues of $684.4 million, up 11% year on year, outperforming analysts’ expectations by 6.9%. The business had an incredible quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.

Champion Homes delivered the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 23% since reporting. It currently trades at $81.85.

Is now the time to buy Champion Homes? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Meritage Homes (NYSE: MTH)

Originally founded in 1985 in Arizona as Monterey Homes, Meritage Homes (NYSE: MTH) is a homebuilder specializing in designing and constructing energy-efficient and single-family homes in the US.

Meritage Homes reported revenues of $1.42 billion, down 10.8% year on year, falling short of analysts’ expectations by 3.4%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and adjusted operating income estimates.

Meritage Homes delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 1.9% since the results and currently trades at $69.69.

Read our full analysis of Meritage Homes’s results here.

Tri Pointe Homes (NYSE: TPH)

Established in 2009 in California, Tri Pointe Homes (NYSE: TPH) is a United States homebuilder recognized for its innovative and sustainable approach to creating premium, life-enhancing homes.

Tri Pointe Homes reported revenues of $854.7 million, down 25.3% year on year. This number topped analysts’ expectations by 15%. Overall, it was a strong quarter as it also logged a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ revenue estimates.

Tri Pointe Homes delivered the biggest analyst estimates beat among its peers. The stock is down 2% since reporting and currently trades at $32.18.

Read our full, actionable report on Tri Pointe Homes here, it’s free for active Edge members.

KB Home (NYSE: KBH)

The first homebuilder to be listed on the NYSE, KB Home (NYSE: KB) is a homebuilding company targeting the first-time home buyer and move-up buyer markets.

KB Home reported revenues of $1.62 billion, down 7.5% year on year. This result surpassed analysts’ expectations by 1.2%. Taking a step back, it was a slower quarter as it logged a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ backlog estimates.

KB Home had the weakest full-year guidance update among its peers. The stock is down 2.7% since reporting and currently trades at $61.53.

Read our full, actionable report on KB Home here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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