Meritage (MTH) AI Stock Analysis

• Market Cap: $4.79B
• Dividend Yield: 2.39%
• Average Volume (3M): 1.16M
• Price to Earnings (P/E): 7.7
• Beta (1Y): 1.03
• Revenue Growth: -3.72%
• EPS Growth: -23.00%
• Country: US
• Employees: 1,898
• Sector: Consumer Cyclical
• Sector Strength: 68
• Industry: Residential Construction
• EPS (TTM): 2.04
• Shares Outstanding: 71,156,136
• 10 Day Avg. Volume: 1,428,523
• 30 Day Avg. Volume: 1,156,797
• PEG Ratio: -1.12
• Price to Book (P/B): 1.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -13.67
• Enterprise Value/Market Cap: 1.25
• Enterprise Value/Revenue: 0.56
• Enterprise Value/Gross Profit: 12.05
• Enterprise Value/Ebitda: 6.44
• 1Y Price Target: $81.40
• Price Target Upside: 14.44% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 74 Outperform
• Price Target: $80.00 ▲(12.47%Upside)

Meritage Homes is supported by strong valuation metrics and a healthy balance sheet. However, financial performance is hindered by cash flow challenges and revenue decline. The stock's technical indicators show stability, while recent corporate events present mixed implications for future performance.

Positive Factors

Market Position

Meritage Homes has become the 5th largest US homebuilder by deliveries, gaining market share from its previous position.

Valuation

Meritage trades at 0.9X price-to-book, which is considered an attractive valuation and a good entry point for shares.

Negative Factors

Backlog

Backlog conversion ratio was 220% in 1Q25, well above the 125% long-term target, but this level is likely unsustainable.

Risks

Risks for Meritage include high mortgage rates, soft housing demand, rising land prices, and tariff uncertainty.

Meritage Business Overview & Revenue Model

Company Description

Meritage Homes Corporation (MTH) is a leading designer and builder of single-family homes in the United States. The company primarily operates in the residential construction sector, focusing on building energy-efficient homes tailored to meet the needs of first-time and move-up buyers. With a commitment to quality and innovation, Meritage offers a variety of home styles and communities across several states, providing buyers with sustainable living options and modern amenities.

How the Company Makes Money

Meritage Homes generates revenue through the construction and sale of single-family homes. The company's primary revenue stream comes from home sales, which encompass the entire process from land acquisition and development to design, construction, and final sale to the consumer. Additionally, Meritage benefits from strategic partnerships with suppliers and contractors to ensure cost-effective sourcing of materials and labor. The company's focus on energy-efficient homes appeals to environmentally conscious consumers and can offer competitive differentiation in the market, potentially leading to increased sales and profitability. Revenue is also influenced by market conditions, including housing demand, interest rates, and economic factors that affect consumer purchasing power.

Meritage Financial Statement Overview

Summary

Meritage demonstrates strong profitability and a solid equity base, but faces challenges in cash flow management and declining return on equity. Improvements in cash flow generation are necessary for sustainable growth.

Income Statement

Meritage shows a strong performance in terms of profitability with a stable gross profit margin and a healthy net profit margin over the TTM period. The revenue growth trajectory is moderate, though slightly down from previous years. EBIT and EBITDA margins are also robust, indicating efficient core operations.

Balance Sheet

The balance sheet is solid with a strong equity base, as evidenced by an impressive equity ratio. The debt-to-equity ratio is manageable, suggesting a reasonable leverage level. However, return on equity has been declining, which might indicate pressure on profitability or efficiency in using shareholder funds.

Cash Flow

Cash flow management appears challenging, with negative free cash flow growth and a negative operating cash flow over the TTM. While the company has managed its financing activities, the negative free cash flow to net income ratio is a concern for liquidity and internal cash generation.

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

Meritage Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 71.13
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 71.13 is above the 20-day moving average (MA) of 71.09, above the 50-day MA of 67.67, and below the 200-day MA of 75.23, indicating a neutral trend. The MACD of 0.32 indicates Positive momentum. The RSI at 52.99 is Neutral, neither overbought nor oversold. The STOCH value of 17.97 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MTH.

Meritage Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TPH	81 Outperform	$2.70B	7.85	11.38%	―	-3.59%	-10.82%
MHO	78 Outperform	$3.17B	6.60	17.56%	―	7.39%	-1.37%
GRBK	75 Outperform	$2.70B	7.92	22.12%	―	13.87%	6.54%
MTH	74 Outperform	$4.79B	7.68	12.58%	2.39%	-3.72%	-23.00%
TMHC	70 Outperform	$5.86B	6.84	15.59%	―	13.77%	28.57%
KBH	67 Neutral	$3.76B	7.31	14.07%	1.75%	3.65%	-0.61%
Sector *	57 Neutral	HK$24.98B	3.78	-1.97%	5.91%	-0.17%	-66.83%

Meritage Corporate Events

Meritage Extends Credit Agreement Maturity to 2030

On July 9, 2025, Meritage Homes Corporation entered into the Eleventh Amendment to its Amended and Restated Credit Agreement, originally dated June 13, 2014. This amendment extends the maturity date of the credit agreement from June 12, 2029, to July 9, 2030, impacting the company’s financial planning and potentially influencing its market strategies.

The most recent analyst rating on (MTH) stock is a Hold with a $98.50 price target. To see the full list of analyst forecasts on Meritage stock, see the MTH Stock Forecast page.

Meritage Homes Implements Board Declassification Amendments

On May 22, 2025, Meritage Homes Corporation’s Board of Directors implemented amendments to their bylaws to declassify the Board, following stockholder approval at the Annual Meeting. This change is part of a broader effort to enhance governance and transparency within the company. During the same meeting, stockholders elected new directors, ratified Deloitte & Touche LLP as the independent accounting firm for 2025, approved executive compensation, and supported a proposal for transparency in political spending. These decisions reflect a commitment to accountability and strategic governance, potentially impacting the company’s operational and market positioning.

The most recent analyst rating on (MTH) stock is a Hold with a $98.50 price target. To see the full list of analyst forecasts on Meritage stock, see the MTH Stock Forecast page.

Meritage COO Clint Szubinski Announces Resignation

On May 7, 2025, Clint Szubinski, the Executive Vice President and Chief Operating Officer of Meritage Homes, announced his resignation for personal reasons. His departure, effective May 16, 2025, marks a significant change in the company’s leadership, potentially impacting its operational strategies and stakeholder relations.

The most recent analyst rating on (MTH) stock is a Hold with a $98.50 price target. To see the full list of analyst forecasts on Meritage stock, see the MTH Stock Forecast page.