DHI/LEN Web Scrape Analysis — Updated Builder Perspective into Q2 EPS

Research evidence excerpt

DHI/LEN Web Scrape Analysis — Updated Builder Perspective into Q2 EPS

ay’s modest decline, while LEN $/

sf declined another -0.5% m/m... though the pace of decline moderated meaningfully vs. May’s sharp

-2.2% m/m pullback. Exhibit 3 breaks things down in heat map form. A few observations:

• For DHI, this increases our conviction that risk-reward into FQ3 skews slightly more positive vs.

neutral. Simply put, DHI appears to be behaving rationally; DHI took price m/m in June 2025

and did the same thing in June 2026 (Exhibits 3 & 7 below). This reads favorably for FQ4 margin

guide (when many of the homes in our scrape will close). To that end, we're taking our FQ4 GM%

assumption to 19.9% (in-line w/ Street, up from 19.5% prior). Why are we not recommending DHI

shares? Two reasons: 1) Our buyside convos suggest less overt negative positioning on near-term

DHI margin trends (setting a higher bar for shares); 2) Shares at close to 2x book screen expensive

for many buysiders we talk to; said differently, shares appear well priced at current levels. Exhibit 17

breaks out latest DHI earnings estimates.

• For LEN, lower m/m price per square foot data is modestly concerning, but a few caveats: 1)

LEN has been quietly reducing base price as best we can tell; this in turn is a key reason why

LEN incentive loads were lower in FQ2 (12.9%) vs. FQ1 (14.1%)... Said differently, reducing the

numerator = optically better incentive loads. 2) Most specialists we speak with are quite astute

and generally appreciate this incentive load slight of hand. To that end, lower LEN price data is

likely more optics (less need to discount if base price is lower) vs. deteriorating incentive backdrop.

Exhibit 18 breaks out latest LEN earnings estimates.

2 | Equity Research