Based on the aggregated intelligence of 135,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, homebuilder D.R. Horton (NYSE:DHI) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at D.R. Horton's business and see what CAPS investors are saying about the stock right now.

D.R. Horton facts

Headquarters (founded)

Fort Worth, Texas (1978)

Market Cap

$3.77 billion


Residential construction

TTM Revenue

$4.41 billion


CEO Donald Tomnitz (since 1998)
CFO Bill Wheat (since 2003)

Return on Equity (average, last three years)


2-Month Return



Toll Brothers (NYSE:TOL)
Lennar (NYSE:LEN)

CAPS members bearish on DHI also bearish on

Pulte Homes (NYSE:PHM)

CAPS members bullish on DHI also bullish on

Bank of America (NYSE:BAC)
Citigroup (NYSE:C)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 301 of the 452 All-Star members who have rated D.R. Horton -- some 67% -- believe the stock will underperform the S&P 500 going forward. These bears include All-Stars ibarz and TSIF, both of whom are in the top 4% of our community.

Just last week, ibarz asked Fools a rather simple, yet profound, bearish question: "Who's going to buy new houses when there's a flood of existing foreclosures?"

In a pitch from one day later, TSIF builds on that bearishness:

Overall, loans are still hard for customers to acquire, inventory value is dropping, and consumers continue to receive bankruptcy letters. In some cases, some equities became undervalued in the March 9th selloff, but by my metrics most home builders are now nearly 2X above their real value. It will take years for them to recover to profitability. Some will be able to acquire assets very cheaply and recover sooner, but well behind the rest of the market. D.R. Horton with a negative 25% margin and a negative 36% ROE gets my red thumb for now. Its dependency on internal loan sourcing and reselling the loans places it in a risky position.

What do you think about D.R. Horton, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 135,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.