One-glance verdict
Undervalued
$229.62 our estimate vs market $9.79
96% below our estimate, below the bear case
Fundamentals snapshot
Dream Finders Homes, Inc.
DFH · NYQ · Consumer Cyclical · Residential Construction
Current price
$9.79
52-week range
$7.30 - $21.55
Market cap
$886.34M
Balance sheet
Stretched
8,423.56x Strong cushion
Net debt $1.75B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Returns 6.6% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Risk Forward P/E (12.5x) is higher than trailing (6.9x) - earnings are expected to drop.
- Risk Net debt grew 118.9% over 3 years.
What this company does
Dream Finders Homes, Inc.
Dream Finders Homes builds and sells houses across different regions of the United States, offering a variety of home types from starter homes to custom designs. Their money primarily comes from selling these homes, but they also make some from financial services like insurance and mortgages, which means they get paid both for the house and the associated services. This is important because having multiple ways to earn money can make the company more stable.
How the company got here
Dream Finders Homes was founded in 2008 by Patrick Zalupski in Jacksonville, Florida, during a challenging time for the U.S. housing market. This early experience likely shaped the company's focus on managing land commitments carefully and using capital efficiently. Over the years, Dream Finders expanded from its Florida base into other high-growth areas, growing both organically and by acquiring smaller regional builders. This strategy allowed them to enter new cities while bringing in local expertise. In 2021, Dream Finders became a public company through an initial public offering (IPO), which is when a private company first sells shares of stock to the public. The company's growth has been characterized by this consistent approach of entering attractive markets, adding new communities, and expanding through strategic acquisitions, all while aiming for a more efficient land management model compared to many competitors.
What it actually does
Dream Finders Homes designs, builds, and sells new single-family homes. They cater to a range of buyers, from those looking for their first home (entry-level) to those moving up to a larger or more luxurious home (first-time move-up, second-time move-up), and even active adults seeking specific lifestyle amenities. The company also sells homes to investors who plan to rent them out, known as "built-for-rent" contracts. Dream Finders markets its homes under several brands, including its flagship Dream Finders Homes, as well as DF Luxury, Reverie Active Adult Lifestyle, Craft Homes, and Coventry Homes, offering a variety of styles and price points.
Southeast
This segment represents Dream Finders Homes' operations in the southeastern United States. It includes homebuilding activities in major Florida cities like Jacksonville, Orlando, and Tampa, as well as along Florida's coasts. The segment also covers operations in Georgia, specifically Atlanta and Savannah, and in South Carolina, including Hilton Head and Bluffton. Additionally, it encompasses custom home building in northeast Florida. This geographic focus allows the company to leverage its understanding of regional housing markets and buyer preferences in these high-growth areas.
Mid-Atlantic
The Mid-Atlantic segment encompasses Dream Finders Homes' construction and sales activities in the mid-Atlantic region of the United States. While specific cities are not detailed for this segment in the provided information, it generally includes markets like those around the Washington, D.C. metropolitan area, encompassing Northern Virginia and Maryland. This region is characterized by significant population density and diverse housing demands, allowing Dream Finders to offer its range of home types to a broad customer base.
Midwest
This segment covers Dream Finders Homes' operations in the Midwest region of the United States. Although specific locations within the Midwest are not detailed, this segment contributes to the company's overall revenue and market presence. The company strategically selects geographic markets based on factors like population and employment growth, favorable migration patterns, and housing affordability, which are key considerations for success in any region, including the Midwest.
Financial Services
The Financial Services segment is an ancillary part of Dream Finders Homes' business, designed to support the homebuying process and generate additional revenue. This segment includes services such as mortgage banking solutions, where the company helps buyers secure financing for their homes. It also provides insurance agency services, including closing, escrow, and title insurance, which are essential for completing real estate transactions. By offering these services, Dream Finders aims to provide a more streamlined and convenient experience for its customers.
What management is betting on now
Dream Finders Homes' management is focused on expanding its community count in high-growth markets, which is a key driver of volume in the homebuilding industry. They are also committed to maintaining a capital-light lot strategy, meaning they aim to control land through options and land-banking agreements rather than owning large amounts of undeveloped land outright. This approach helps reduce the capital tied up in land and minimizes financial risk. Additionally, the company continues to grow through strategic acquisitions of regional builders, which allows them to quickly enter new markets and leverage existing local operating teams.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$-222.53M
FY2024 Q4
$302.55M
FY2025 Q1
$-47.88M
FY2025 Q2
$-78.79M
FY2025 Q3
$-135.73M
FY2025 Q4
$136.03M
FY2026 Q1
$-54.81M
FY2026 Q2
$-107.24M
Revenue
$1.06B
Net income
$27.72M
Diluted EPS
0.27
Operating cash flow
$-101.52M
Free cash flow
$-107.24M
Fetching…
Sources
Revenue
$887.84M
Net income
$13.26M
Diluted EPS
0.11
Operating cash flow
$-49.55M
Free cash flow
$-54.81M
Fetching…
Sources
Revenue
$1.21B
Net income
$58.72M
Diluted EPS
0.57
Operating cash flow
$143.61M
Free cash flow
$136.03M
Fetching…
Sources
Revenue
$969.80M
Net income
$47.00M
Diluted EPS
0.47
Operating cash flow
$-130.98M
Free cash flow
$-135.73M
Fetching…
Sources
Revenue
$1.15B
Net income
$56.58M
Diluted EPS
0.56
Operating cash flow
$-68.49M
Free cash flow
$-78.79M
Fetching…
Sources
Revenue
$989.87M
Net income
$54.90M
Diluted EPS
0.54
Operating cash flow
$-44.71M
Free cash flow
$-47.88M
Fetching…
Sources
Revenue
$1.56B
Net income
$129.25M
Diluted EPS
1.28
Operating cash flow
$306.45M
Free cash flow
$302.55M
Fetching…
Sources
Revenue
$1.01B
Net income
$70.65M
Diluted EPS
0.70
Operating cash flow
$-204.97M
Free cash flow
$-222.53M
Fetching…
Sources
Is it cheap or expensive?
Fair value $229.62 vs current price $9.79
Our most-likely fair value is $229.62 a share — about 2,245.5% above today's price of $9.79, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $1.8B. Interest coverage 8423.6x.
Net debt
$1.75B
Interest coverage
8,423.56x
Dream Finders Homes, Inc.'s profit covers its interest bill about 8423.6 times over. which is stronger than every peer shown here.
Stretched
Worse cushion
Baseline
Better cushion
DFH
BASELINE
Dream Finders Homes, Inc.
Total debt $2.00B Interest coverage 8,423.56x This is the baseline the peer rows are being compared against.
Total debt $68.71M Interest coverage 22.66x -100% vs DFH Carries about 371.7x less debt cushion than DFH.
What you should know
The case for and against DFH
3 Rewards
3 Risks
Rewards
-
Returns 6.6% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 4/10 years.
-
Trades at 6.9x P/E vs peer median 14.4x (52.0% cheaper).
Risks
-
Forward P/E (12.5x) is higher than trailing (6.9x) - earnings are expected to drop.
-
Net debt grew 118.9% over 3 years.
-
Operating margin compressed from 10.4% to 0.3% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
6.89x
Forward P/E
12.47x
P/B
0.62x
P/S
0.21x
EV/EBITDA
20.03x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
19.4%
Operating margin
0.3%
Net margin
2.6%
ROE
6.6%
ROA
1.9%
Health
Liquidity and balance-sheet strength
Debt / equity
1.19x
Current ratio
7.87x
Quick ratio
0.62x
Total debt
$2.00B
Total cash
$245.64M
Growth
How the business has been compounding
Revenue TTM
$4.13B
Revenue 5Y CAGR
22.4%
EPS TTM
1.42
EPS 5Y CAGR
-4.4%
Cash flow
How much cash the business throws off
Operating CF TTM
$-138.45M
Free CF TTM
$-126.37M
FCF margin
-3.1%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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