Horton Homes Faces Headwinds: Revenue Decline Amidst Market Challenges and Rising Competition

Performance Review

DHI Group's total operating revenue was US$7.734 billion as of March 31, 2025, down approximately 15.01% from US$9.107 billion as of March 31, 2024. This change indicates that the company faces pressure in terms of operating revenue, mainly due to the decline in market demand, increased competition, and rising costs.

Key Data in the Financial Report

1. Decline in Operating Revenue: From US$9.107 billion to US$7.734 billion, a decrease of approximately 15.01%.

2. Decline in Market Demand: The number of house orders in the first quarter decreased by 1.3% year-on-year and 6.3% quarter-on-quarter.

3. Interest Rate Impact: The rise in US interest rates has reduced the willingness of buyers to purchase homes, limiting market activity.

4. Competitive Environment: Competitors in the industry maintain stable revenue through market strategies or product innovation, putting DHI under significant pressure.

5. Future Outlook: DHI expects its sales to be US$36 billion to US$37.5 billion in 2025, remaining optimistic about market demand.

Peer Comparison

1. Industry-wide Analysis: The overall real estate industry faced challenges in 2025, with many companies experiencing a decline in revenue due to the rise in interest rates and economic slowdown, which reduced housing demand. The industry's operating revenue generally declined, indicating a deteriorating market environment.

2. Peer Evaluation Analysis: DHI's operating revenue decreased significantly, while other competitors such as United Homes Group and Hovnanian Enterprises performed actively in the market, indicating differentiation and competition within the industry, and DHI needs to re-examine its market positioning and sales strategies to enhance competitiveness.

Summary

DHI faces the main challenges of declining market demand and intensified competition, leading to a significant decline in operating revenue. Although its performance in the first quarter exceeded market expectations, the overall market environment remains unfavorable, and the outlook for the real estate industry depends on changes in the economic situation and policy regulation.

Opportunities

1. Market demand may gradually recover in the future, and if the economic situation improves, housing demand may recover, allowing DHI to capitalize on sales performance.

2. The company can find opportunities in a volatile market by optimizing cost control and increasing gross margin.

3. With the advancement of digital economy and new infrastructure, DHI can explore innovative products in smart and digitalization, enhancing market competitiveness.

4. Effective adjustment of sales strategies and increased product appeal may attract more buyers.

Risks

1. If US interest rates continue to rise, buyers' willingness to purchase homes may further decrease, affecting the company's sales performance.

2. Intensified competition may lead other competitors to adopt more competitive pricing and product strategies, further squeezing DHI's market share.

3. Economic uncertainty may lead to persistent market weakness, affecting the company's long-term development.

4. Rising costs may put pressure on pricing, affecting sales revenue and overall profitability.