Should you buy Dream Finders Homes stock? (June 2024)

Published first at Dream Finders Homes stock analysis. Ticker: $DFH US homebuilder DreamFinder Homes has experienced rapid growth over the last 10 years. But the stock has fallen 40% from its 52 week high. At the latest price, DreamFinder Homes has a market cap of 2.7 billion dollars. With 240 million of cash on its balance sheet and one billion of debt, the enterprise value is just under 3.5 billion. Revenue over the last 12 months comes to 3.8 billion with 300 million of net income and 157 million of free cash flow. So DreamFinder stock is valued at just 9 times earnings and 22 times free cash flow. DreamFinder Homes was started by CEO Patrick Zalupski in the aftermath of the financial crisis and it’s what’s known as an asset-light home builder. The company doesn’t purchase land until its found a buyer for the home it’s about to build. This keeps debt off the balance sheet and minimizes risk. It’s an approach that was popularized by market leader NVR which has been one of the best performing stocks of the last 20 years. DreamFinder has made no secret about copying NVR’s model and so far it’s worked exceptionally well. The company has grown from just 3 sold homes in 2009 to more than 8000 expected sales this year. Total revenues grew 50% in 2020, 70% in 2021, and 74% in 2022. Operating margins have also inflected higher. #investing #stocks #dfhstock #3mb