Meritage (MTH) AI Stock Analysis

• Market Cap: $4.77B
• Dividend Yield: 2.48%
• Average Volume (3M): 816.91K
• Price to Earnings (P/E): 9.5
• Beta (1Y): 0.99
• Revenue Growth: -6.06%
• EPS Growth: -32.39%
• Country: US
• Employees: 1,898
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Residential Construction
• EPS (TTM): 1.39
• Shares Outstanding: 71,156,136
• 10 Day Avg. Volume: 724,715
• 30 Day Avg. Volume: 816,913
• PEG Ratio: 0.93
• Price to Book (P/B): 1.08
• Price to Sales (P/S): 0.87
• P/FCF Ratio: -21.75
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $86.20
• Price Target Upside: 28.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 69 Neutral
• Price Target: $78.00 ▲(16.28% Upside)

Meritage's overall stock score reflects a stable financial position and attractive valuation, offset by bearish technical indicators and challenges highlighted in the earnings call. The company's strong profitability and low P/E ratio are significant strengths, while the negative cash flows and market challenges present risks.

Positive Factors

Community Count Growth

The significant increase in community count enhances Meritage's market presence and potential revenue streams, indicating strategic expansion in high-demand areas.

Strong Backlog Conversion Rate

High backlog conversion rates suggest effective operational execution and strong demand fulfillment, supporting consistent revenue generation.

Healthy Balance Sheet

A strong balance sheet with low leverage provides financial stability and flexibility, enabling strategic investments and resilience in downturns.

Negative Factors

Decreased Revenue and Earnings

Declining revenue and earnings indicate potential challenges in market demand or pricing power, which could impact long-term profitability.

Increased Use of Incentives

Increased reliance on incentives may pressure margins and suggest underlying demand weaknesses, affecting long-term financial health.

Negative Cash Flow

Negative cash flow can limit the company's ability to fund operations and growth initiatives, posing a risk to financial sustainability.

Meritage Business Overview & Revenue Model

Company Description

Meritage (MTH) is a leading homebuilder based in the United States, specializing in the development and construction of single-family homes. The company operates primarily in high-demand markets across the country, focusing on providing innovative and sustainable housing solutions. Meritage is known for its commitment to energy-efficient homebuilding, offering a range of designs that cater to diverse consumer preferences and budgets. In addition to residential construction, the company is involved in land acquisition and development, enhancing its position within the housing sector.

How the Company Makes Money

Meritage generates revenue primarily through the sale of newly constructed homes. Its revenue model is centered around the construction and delivery of homes to homebuyers, which includes a mix of entry-level, move-up, and luxury homes. Key revenue streams include home sales, as well as ancillary services such as mortgage and title services provided through their in-house subsidiaries. Additionally, the company benefits from strategic partnerships with land developers and suppliers, which help optimize costs and enhance profitability. Factors contributing to its earnings include favorable market conditions, demand for new housing, and the company's focus on energy-efficient building practices that appeal to environmentally conscious consumers.

Meritage Financial Statement Overview

Summary

Meritage shows strong profitability with robust profit margins and a healthy balance sheet. However, challenges in cash flow and declining revenue suggest areas for improvement.

Income Statement

Meritage shows strong gross profit and net profit margins over the TTM, with a gross profit margin of 22.7% and a net profit margin of 13.0%. However, revenue has decreased slightly by 3.1% from the previous year. EBIT and EBITDA margins are robust at 15.7% and 16.5% respectively, indicating efficient cost management.

Balance Sheet

The company maintains a healthy debt-to-equity ratio of 0.34, suggesting prudent leverage use. ROE is solid at 15.3%, although it has declined compared to previous years. The equity ratio of 67.9% highlights a strong equity base relative to assets.

Cash Flow

Cash flow analysis shows a negative free cash flow growth rate, with free cash flow remaining negative in the TTM. The operating cash flow to net income ratio is negative, indicating cash flow challenges despite profitability, which is a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.04B	6.39B	6.14B	6.30B	5.15B	4.51B
Gross Profit	1.30B	1.60B	1.52B	1.80B	1.44B	976.00M
EBITDA	728.23M	1.03B	972.93M	1.31B	999.59M	566.79M
Net Income	541.63M	786.19M	738.75M	992.19M	737.44M	423.48M
Balance Sheet
Total Assets	7.76B	7.16B	6.35B	5.77B	4.81B	3.86B
Cash, Cash Equivalents and Short-Term Investments	728.94M	651.55M	921.23M	861.56M	618.34M	745.62M
Total Debt	1.80B	1.39B	1.06B	1.15B	1.16B	1.02B
Total Liabilities	2.47B	2.02B	1.74B	1.82B	1.76B	1.52B
Stockholders Equity	5.29B	5.14B	4.61B	3.95B	3.04B	2.35B
Cash Flow
Free Cash Flow	-252.58M	-256.23M	317.38M	378.30M	-177.76M	510.43M
Operating Cash Flow	-224.95M	-227.58M	355.57M	405.27M	-152.09M	530.36M
Investing Cash Flow	-53.68M	-44.07M	-43.62M	-32.29M	-26.82M	-18.23M
Financing Cash Flow	176.00M	1.98M	-252.28M	-129.76M	51.63M	-85.97M

Meritage Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 67.08
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MTH, the sentiment is Negative. The current price of 67.08 is below the 20-day moving average (MA) of 70.23, below the 50-day MA of 73.90, and below the 200-day MA of 70.94, indicating a bearish trend. The MACD of -0.90 indicates Negative momentum. The RSI at 34.85 is Neutral, neither overbought nor oversold. The STOCH value of 47.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MTH.

Meritage Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TPH	―	$2.74B	9.41	9.47%	―	-16.60%	-29.85%
IBP	―	$7.18B	29.97	37.03%	1.17%	3.44%	0.25%
KBH	―	$4.06B	8.95	13.04%	1.57%	-0.95%	-9.22%
TMHC	―	$5.77B	7.11	14.31%	―	6.98%	9.74%
MTH	―	$4.77B	9.49	10.50%	2.48%	-6.06%	-32.39%
MHO	―	$3.43B	7.69	15.76%	―	4.77%	-9.30%
Sector *	―	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Meritage Corporate Events

Meritage Homes Reports Q3 2025 Financial Results

Meritage Homes Corporation is a leading U.S. homebuilder known for its energy-efficient and affordable homes, operating across multiple states including Arizona, California, and Texas. In its third quarter of 2025, Meritage Homes reported a decrease in home closing revenue by 12% compared to the previous year, despite an increase in home orders by 4%. The company closed 3,685 homes in the quarter, generating $1.4 billion in revenue, though average sales prices and gross margins saw declines due to increased use of incentives and higher costs. The company also returned $85 million to shareholders through dividends and share repurchases. Despite challenges, Meritage Homes expanded its community count by 20% year-over-year and maintained a strong liquidity position with $729 million in cash. Looking forward, Meritage Homes remains focused on its strategy to navigate the evolving housing market, aiming for stable home closing volumes and revenue in the upcoming quarter.