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Dream Finders Homes (DFH) Surges 9.5%: Is This an Indication of Further Gains?

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Dream Finders Homes Inc. (DFH - Free Report) shares ended the last trading session 9.5% higher at $11. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 38.4% loss over the past four weeks.

The uptrend in the stock can primarily be attributable to its capital-light homebuilding model, which allows Dream Finders to consistently generate higher returns on equity than its peers.

This homebuilder is expected to post quarterly earnings of $0.48 per share in its upcoming report, which represents a year-over-year change of +54.8%. Revenues are expected to be $699.1 million, up 91.4% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Dream Finders Homes, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on DFH going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Dream Finders Homes belongs to the Zacks Building Products - Home Builders industry. Another stock from the same industry, M.D.C. Holdings, Inc. , closed the last trading session 7.2% higher at $30.81. Over the past month, MDC has returned -20.7%.

M.D.C. Holdings, Inc.'s consensus EPS estimate for the upcoming report has remained unchanged over the past month at $2.43. Compared to the company's year-ago EPS, this represents a change of +15.2%. M.D.C. Holdings, Inc. currently boasts a Zacks Rank of #3 (Hold).


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