Meritage (MTH)
NYSE:MTH
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Meritage
(NYSE:MTH)
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Rating:68Neutral
Price Target:
$75.00
▲(10.18% Upside)
Action:ReiteratedDate:04/23/26
The score is driven mainly by solid-but-cooling fundamentals (margin/ROE compression and uneven cash-flow conversion) and a balanced earnings outlook (flat 2026 guidance with strong capital returns but notable near-term margin/EPS pressure). Valuation is a clear positive with a low P/E and a meaningful dividend, while technicals are only modestly supportive.
Positive Factors
Community Expansion
A record 345 active communities increases Meritage’s capacity to scale deliveries and diversifies geographic exposure, creating a structural platform for revenue recovery as markets normalize. More communities raise potential closings and amortize fixed overhead, supporting medium-term margin recovery if demand resumes.
Negative Factors
Margin Compression
A 400bp margin decline driven by higher incentives, lot costs and lost operating leverage is a structural profitability threat. Management expects relief only toward late 2027, implying prolonged earnings pressure that reduces cash available for reinvestment and complicates attainment of long-term gross-margin targets.
Read all positive and negative factors
Positive Factors
Negative Factors
Community Expansion
A record 345 active communities increases Meritage’s capacity to scale deliveries and diversifies geographic exposure, creating a structural platform for revenue recovery as markets normalize. More communities raise potential closings and amortize fixed overhead, supporting medium-term margin recovery if demand resumes.
Read all positive factors
Meritage (MTH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.47B
Dividend Yield2.62%
Average Volume (3M)979.15K
Price to Earnings (P/E)18.8
Beta (1Y)0.73
Revenue Growth-10.63%
EPS Growth-45.01%
CountryUS
Employees1,898
SectorConsumer Cyclical
Sector Strength84
IndustryResidential Construction
Share Statistics
EPS (TTM)0.82
Shares Outstanding66,702,430
10 Day Avg. Volume836,845
30 Day Avg. Volume979,154
Financial Highlights & Ratios
PEG Ratio-0.25
Price to Book (P/B)0.90
Price to Sales (P/S)0.80
P/FCF Ratio50.34
Enterprise Value/Market Cap1.23
Enterprise Value/Revenue0.98
Enterprise Value/Gross Profit5.26
Enterprise Value/Ebitda10.95
Forecast
1Y Price Target
$75.57Price Target Upside11.02% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)5.02
Revenue Forecast (FY)$5.49B
Meritage Business Overview & Revenue Model
Company Description
Meritage Homes Corporation, together with its subsidiaries, designs and builds single-family homes in the United States. The company operates through two segments, Homebuilding and Financial Services. It acquires and develops land; and constructs,...
How the Company Makes Money
Meritage makes money primarily by building and selling newly constructed homes to homebuyers. Revenue is recognized from home sales when closings occur, and the company’s profitability is driven by the difference between the selling price of homes...
Meritage Earnings Call Summary
Earnings Call Date:Apr 22, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Neutral
The call presents a balanced picture: Meritage reported operational and financial headwinds in Q1 including top-line, margin and EPS declines driven by lower volume, increased incentives and lingering elevated land basis. Offsetting these weaknesses are several strategic and financial strengths — record community count, very strong backlog conversion, meaningful cost savings, substantial liquidity, disciplined land controls and an aggressive capital return program. Management is cautiously optimistic, scaling community expansion while prioritizing balance sheet strength and margin discipline. Near-term performance is pressured, but the company outlined a clear pathway (store count growth, lower finished-spec supply, direct cost improvements and automation) to recover margins and volume over time.Positive Updates
Record Community Count and Expansion
Ended Q1 with 345 active communities, a company record, up 19% year-over-year (from 290) and up 3% sequentially; added 40 new communities in the quarter and reiterated full-year community count growth target of 5%–10%.
Negative Updates
Revenue and Volume Decline
Q1 home closing revenue of $1.1 billion was down 17% year-over-year due to 13% lower closing volume and a 5% decline in ASP on closings; orders totaled 3,664, down 5% year-over-year.
Read all updates
Q1-2026 Updates
Positive
Negative
Record Community Count and Expansion
Ended Q1 with 345 active communities, a company record, up 19% year-over-year (from 290) and up 3% sequentially; added 40 new communities in the quarter and reiterated full-year community count growth target of 5%–10%.
Read all positive updates
Company Guidance
Meritage updated full‑year 2026 guidance to expect closings and revenue to be at or within ±5% of full‑year 2025, and provided Q2 guidance of 3,650–3,900 home closings, $1.37–$1.47 billion of home closing revenue, roughly 18% home closing gross margin, a 24.5–25% effective tax rate and $1.18–$1.46 diluted EPS; they also reiterated 2026 land acquisition and development spend of up to $2.0 billion. Management plans programmatic buybacks of ~$100 million per remaining quarter (Q1 repurchases were $130 million; $384 million remains available), raised the quarterly dividend ~12% to $0.48 per share, and returned $162 million to shareholders in Q1; balance sheet highlights include $767 million cash and a net debt‑to‑capital ratio of 17.4% (ceiling mid‑20s). Longer‑term targets reiterated include normalized gross margin of 22.5%–23.5%, SG&A around 9.5%, and a backlog conversion target of 175%–200%, with inventory and lot metrics (≈6,600 spec+backlog units, ~4,700 specs, ~75,500 lots = ~5.2 years of supply) positioned to support the plan.Meritage Financial Statement Overview
Summary
Income Statement
68
Positive
Balance Sheet
74
Positive
Cash Flow
57
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.62B | 5.86B | 6.40B | 6.14B | 6.29B | 5.14B |
| Gross Profit | 1.05B | 1.15B | 1.60B | 1.52B | 1.80B | 1.44B |
| EBITDA | 503.61M | 562.76M | 984.30M | 927.72M | 1.31B | 996.82M |
| Net Income | 385.52M | 453.01M | 786.19M | 738.75M | 992.19M | 737.44M |
Balance Sheet | ||||||
| Total Assets | 7.55B | 7.65B | 7.16B | 6.35B | 5.77B | 4.82B |
| Cash, Cash Equivalents and Short-Term Investments | 766.63M | 775.16M | 651.55M | 921.23M | 861.56M | 618.34M |
| Total Debt | 1.81B | 1.89B | 1.39B | 1.06B | 1.17B | 1.19B |
| Total Liabilities | 2.46B | 2.46B | 2.02B | 1.74B | 1.82B | 1.76B |
| Stockholders Equity | 5.09B | 5.20B | 5.14B | 4.61B | 3.95B | 3.04B |
Cash Flow | ||||||
| Free Cash Flow | 237.74M | 92.57M | -256.23M | 317.38M | 378.30M | -177.76M |
| Operating Cash Flow | 262.17M | 118.29M | -227.58M | 355.57M | 405.27M | -152.09M |
| Investing Cash Flow | -54.02M | -57.70M | -44.07M | -43.62M | -32.29M | -26.82M |
| Financing Cash Flow | -453.18M | 63.01M | 1.98M | -252.28M | -129.76M | 51.63M |
Meritage Technical Analysis
Positive
68.07
Price Trends
68.23
Negative
69.30
Negative
70.18
Negative
Market Momentum
0.03
Negative
58.92
Neutral
71.09
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MTH, the sentiment is Positive. The current price of 68.07 is above the 20-day moving average (MA) of 63.11, below the 50-day MA of 68.23, and below the 200-day MA of 70.18, indicating a neutral trend. The MACD of 0.03 indicates Negative momentum. The RSI at 58.92 is Neutral, neither overbought nor oversold. The STOCH value of 71.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MTH.
Meritage Risk Analysis
Meritage disclosed 32 risk factors in its most recent earnings report. Meritage reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Meritage Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $5.67B | 13.92 | 10.85% | ― | -8.99% | -22.26% | |
72 Outperform | $7.67B | 26.29 | 39.12% | 1.20% | 1.00% | 6.71% | |
70 Outperform | $3.99B | 11.14 | 7.29% | ― | -22.75% | -43.96% | |
68 Neutral | $4.47B | 18.83 | 8.65% | 2.62% | -10.63% | -45.01% | |
68 Neutral | $3.33B | 11.74 | 10.14% | ― | -1.83% | -30.18% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $3.28B | 29.80 | 9.01% | 1.76% | -13.61% | -37.18% |
* Consumer Cyclical Sector Average
MTH
Meritage
67.02
0.63
0.95%
KBH
KB Home
52.30
-0.81
-1.53%
MHO
M/I Homes
129.99
23.31
21.85%
TPH
Tri Pointe
46.82
16.07
52.26%
TMHC
Taylor Morrison
60.66
3.31
5.77%
IBP
Installed Building Products
284.55
120.86
73.84%
Meritage Corporate Events
Executive/Board Changes
Meritage Homes Updates Executive Compensation and Incentive Structure
Neutral
Mar 26, 2026
On March 23, 2026, Meritage Homes Corporation’s Executive Compensation Committee approved increases to certain compensation components for Chief Executive Officer Phillippe Lord, Chief Financial Officer Hilla Sferruzza, General Counsel Malis...
Executive/Board Changes
Meritage Board Member Resignation Prompts Director Count Reduction
Neutral
Feb 19, 2026
On February 17, 2026, Meritage Homes Corporation announced that board member Dennis V. Arriola would step down from the Board of Directors, effective March 31, 2026, with the company stating that his resignation was not due to any disagreement. Fo...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.