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Meritage
(NYSE:MTH)
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Rating:66Neutral
Price Target:
$92.00
▲(35.15% Upside)
Action:Reiterated
Date:06/30/26
The score is driven primarily by a still-solid but weakening financial profile—profitability and leverage remain acceptable, but revenues, margins, and ROE have cooled and cash-flow conversion has been uneven. Valuation and the earnings-call capital return plan provide support, while technical signals could not be assessed due to missing indicator data; the credit facility expansion is a modest positive for liquidity.
Positive Factors
Balance sheet liquidity
Substantial cash balances, low net leverage and unused credit capacity give Meritage durable financial flexibility. This supports ongoing community openings, disciplined land purchases, and shareholder returns through downturns, reducing refinancing and liquidity risk over the medium term.
Negative Factors
Margin compression
Significant gross margin deterioration reflects higher incentives, elevated lot basis and lost operating leverage. Lower margins materially reduce profitability and return on equity; management expects margin relief only toward late 2027, implying prolonged margin pressure through the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance sheet liquidity
Substantial cash balances, low net leverage and unused credit capacity give Meritage durable financial flexibility. This supports ongoing community openings, disciplined land purchases, and shareholder returns through downturns, reducing refinancing and liquidity risk over the medium term.
Read all positive factors
Meritage (MTH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.46B
Dividend Yield2.62%
Average Volume (3M)843.95K
Price to Earnings (P/E)14.9
Beta (1Y)0.63
Revenue Growth-10.63%
EPS Growth-45.01%
CountryUS
Employees1,898
SectorConsumer Cyclical
Sector Strength84
IndustryResidential Construction
Share Statistics
EPS (TTM)5.48
Shares Outstanding66,702,430
10 Day Avg. Volume1,114,904
30 Day Avg. Volume843,949
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 Cap1.08
Enterprise Value/Revenue1.05
Enterprise Value/Gross Profit5.60
Enterprise Value/Ebitda11.26
Forecast
1Y Price Target
$75.57Price Target Upside11.02% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
EPS Forecast (FY)4.99
Revenue Forecast (FY)$5.48B
Meritage Business Overview & Revenue Model
Company Description
Meritage Homes Corporation, alongside its associated companies, focuses on the design and construction of single-family residences throughout the United States. The enterprise operates primarily through two distinct divisions: home construction an...
How the Company Makes Money
Meritage primarily makes money by selling newly constructed homes. Revenue is generated when a home sale closes, typically consisting of the base home price plus any buyer-selected upgrades and options, and it is recognized at closing under standa...
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 | 522.26M | 609.88M | 1.03B | 974.76M | 1.31B | 981.40M |
| 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
69.30
Positive
68.43
Positive
68.87
Positive
Market Momentum
4.39
Negative
66.62
Neutral
74.93
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 below the 20-day moving average (MA) of 76.01, below the 50-day MA of 69.30, and below the 200-day MA of 68.87, indicating a bullish trend. The MACD of 4.39 indicates Negative momentum. The RSI at 66.62 is Neutral, neither overbought nor oversold. The STOCH value of 74.93 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 | $6.61B | 10.55 | 10.85% | ― | -8.99% | -22.26% | |
70 Outperform | $4.01B | 11.55 | 11.42% | ― | -1.83% | -30.18% | |
69 Neutral | $3.83B | 14.56 | 9.01% | 1.76% | -17.52% | -45.75% | |
66 Neutral | $5.46B | 14.94 | 7.40% | 2.62% | -10.63% | -45.01% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
55 Neutral | $6.15B | 24.21 | 37.46% | 1.20% | 0.45% | 6.77% |
* Consumer Cyclical Sector Average
MTH
Meritage
81.86
14.97
22.37%
KBH
KB Home
61.16
9.30
17.92%
MHO
M/I Homes
156.84
44.93
40.15%
TMHC
Taylor Morrison
71.86
9.27
14.81%
IBP
Installed Building Products
228.26
38.96
20.58%
Meritage Corporate Events
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
Meritage Expands Revolving Credit Facility and Extends Maturity
Positive
Jun 29, 2026
On June 24, 2026, Meritage Homes Corporation executed a Twelfth Amendment to its Amended and Restated Credit Agreement, expanding its revolving credit facility to $980 million and enhancing the accordion feature to allow potential increases up to ...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Meritage Homes Stockholders Approve Directors and Governance Changes
Neutral
May 21, 2026
On May 21, 2026, Meritage Homes Corporation held its Annual Meeting of Stockholders in a virtual-only format, where shareholders elected six individuals as Class I directors to the board and ratified Deloitte Touche LLP as the independent registe...
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.