Taylor Morrison (TMHC) AI Stock Analysis

• Market Cap: $5.60B
• Dividend Yield: N/A
• Average Volume (3M): 1.14M
• Price to Earnings (P/E): 8.2
• Beta (1Y): 0.81
• Revenue Growth: 6.98%
• EPS Growth: 9.74%
• Country: US
• Employees: 3,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Residential Construction
• EPS (TTM): 1.76
• Shares Outstanding: 96,333,670
• 10 Day Avg. Volume: 1,079,781
• 30 Day Avg. Volume: 1,141,856
• PEG Ratio: -1.19
• Price to Book (P/B): 0.92
• Price to Sales (P/S): 0.72
• P/FCF Ratio: 7.22
• Enterprise Value/Market Cap: 1.27
• Enterprise Value/Revenue: 0.87
• Enterprise Value/Gross Profit: 3.77
• Enterprise Value/Ebitda: 6.12
• 1Y Price Target: $74.00
• Price Target Upside: 27.28% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 5.31
• Revenue Forecast (FY): $6.67B

• Rating: 77 Outperform
• Price Target: $68.00 ▲(16.96% Upside)
• Action: Reiterated Date: 02/19/26
• Date: Action: Reiterated 02/19/26

TMHC scores well on solid financial footing (improved leverage, resilient profitability despite margin pressure) and supportive technical momentum, with valuation a clear positive given the low P/E. The main offset is the earnings outlook’s near-term margin and demand/backlog risk tied to elevated spec inventory.

Positive Factors

Improved leverage / stronger balance sheet

Material deleveraging meaningfully reduces financial risk and raises flexibility. Lower leverage supports continued land investment, capacity to withstand housing-cycle swings, and funds capital returns (buybacks/dividends) without stressing liquidity over the next several quarters.

High free-cash-flow conversion

Consistently strong FCF conversion versus reported earnings indicates high earnings quality and internal funding capacity. This durable cash generation enables land buys, debt repayment and shareholder returns even if revenue fluctuates across quarters.

Scale in build-to-rent / land partnership

A large, partnered BTR land bank diversifies revenue exposure beyond for-sale closings and secures long-duration growth optionality. The scale and partnership reduce single-cycle lot risk and create a structural recurring-development pipeline over multiple years.

Negative Factors

Elevated unsold/spec inventory

A large unsold/spec stock ties up capital, increases carrying and holding costs, and pressures realized margins as management discounts or incentives sales. Clearing this inventory will constrain cash conversion and margins until absorption improves over several quarters.

Lower-than-normal backlog

A thin backlog reduces near-term revenue visibility and makes deliveries dependent on future selling seasons. That increases execution risk for full-year unit targets and leaves performance more exposed to demand swings in the coming 2-6 months.

Margin pressure from rising costs and interest

Rising interest and lot costs are structural headwinds that compress gross and net margins unless fully passed to buyers. Combined with elevated spec sales, these cost pressures can sustain multi-quarter margin weakness and limit cash available for reinvestment or returns.

Taylor Morrison Business Overview & Revenue Model

Company Description

Taylor Morrison Home Corporation, together with its subsidiaries, operates as a public homebuilder in the United States. The company designs, builds, and sells single and multi-family detached and attached homes; and develops lifestyle and master-planned communities. It also develops and constructs multi-use properties consisting of commercial space, retail, and multi-family properties under the Urban Form brand name; and offers title insurance and closing settlement services, as well as financial services. In addition, the company operates under the Taylor Morrison, William Lyon Signature, and Darling Homes brand names in Arizona, California, Colorado, Florida, Georgia, Nevada, North and South Carolina, Oregon, Texas, and Washington. Taylor Morrison Home Corporation was founded in 1936 and is headquartered in Scottsdale, Arizona.

How the Company Makes Money

Taylor Morrison makes money primarily by building and selling homes. Its largest revenue stream is homebuilding revenue recognized when a home is delivered/closed with the buyer; this reflects the contracted sales price of the home and typically includes revenue from optional upgrades and structural/design selections chosen by the buyer. Profitability in this segment is driven by the spread between the home’s selling price and the company’s costs (land acquisition and development, construction materials and labor, and overhead), and it is influenced by factors such as local housing demand, pricing power, sales incentives, construction cycle times, and interest-rate conditions that affect affordability. A secondary revenue stream comes from its financial services operations, which primarily generate income from originating residential mortgage loans for buyers of Taylor Morrison homes and earning associated origination fees and related revenue. This segment’s earnings are tied to the volume of home closings, the attach rate of buyers using its mortgage services, and prevailing mortgage-market conditions. The company’s earnings are also affected by its ability to source and control finished lots/land positions for future communities, manage build costs and supply chains, and operate efficiently across its geographic footprint. Information on any specific partnerships that materially contribute to earnings is null.

Taylor Morrison Financial Statement Overview

Summary

Solid overall fundamentals with improved leverage (debt-to-equity down to ~0.37) and healthy profitability, but recent margin compression (gross and net) and choppy revenue keep performance below top-tier; cash generation is generally strong versus net income but operating cash flow is notably volatile.

Income Statement

Revenue has been relatively stable but choppy, with a slight decline in 2025 (annual) after modest growth in 2024 and a dip in 2023. Profitability remains solid for the industry, but margins have compressed from the 2022 peak (gross margin ~25.7% to ~23.0% in 2025; net margin ~12.8% to ~9.6%), and net income also stepped down in 2025 versus 2024. Overall: good earnings power, but a weaker recent trajectory and margin pressure keep the score below top-tier.

Balance Sheet

Leverage looks manageable and improved versus earlier years: debt-to-equity has come down meaningfully from ~0.86 in 2020–2021 to ~0.37 in 2024–2025, alongside steady equity growth. Returns on equity remain healthy (mid-teens in 2023–2024, ~12% in 2025), though they have cooled from the 2022 high. Overall: strengthening balance sheet and moderate leverage, with some normalization in returns recently.

Cash Flow

Free cash flow conversion is consistently strong versus net income (generally ~0.83–0.97), indicating earnings quality is solid. However, operating cash flow is volatile year-to-year (very low in 2024, then strong in 2025), which is a key risk in a homebuilder given working-capital swings. The sharp rebound in 2025 (including strong free cash flow growth) is a positive, but variability prevents a higher score.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	8.12B	8.17B	7.42B	8.22B	7.50B
Gross Profit	1.87B	2.01B	1.79B	2.12B	1.56B
EBITDA	1.14B	1.28B	1.13B	1.51B	894.79M
Net Income	782.50M	883.31M	768.93M	1.05B	663.03M
Balance Sheet
Total Assets	9.84B	9.30B	8.67B	8.47B	8.73B
Cash, Cash Equivalents and Short-Term Investments	851.23M	487.15M	798.57M	724.49M	832.82M
Total Debt	2.36B	2.20B	2.10B	2.58B	3.40B
Total Liabilities	3.53B	3.42B	3.34B	3.82B	4.76B
Stockholders Equity	6.31B	5.87B	5.31B	4.63B	3.93B
Cash Flow
Free Cash Flow	807.37M	173.75M	772.74M	1.08B	355.45M
Operating Cash Flow	847.75M	210.08M	806.17M	1.11B	376.65M
Investing Cash Flow	-185.17M	-136.44M	-97.19M	-14.88M	-74.26M
Financing Cash Flow	-298.51M	-393.57M	-628.51M	-1.20B	-155.00K

Taylor Morrison Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 58.14
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TMHC, the sentiment is Negative. The current price of 58.14 is below the 20-day moving average (MA) of 62.87, below the 50-day MA of 63.39, and below the 200-day MA of 62.95, indicating a bearish trend. The MACD of -1.50 indicates Positive momentum. The RSI at 30.51 is Neutral, neither overbought nor oversold. The STOCH value of 27.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TMHC.

Taylor Morrison Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TMHC	77 Outperform	$5.60B	8.21	12.83%	―	6.98%	9.74%
PHM	76 Outperform	$22.50B	10.46	17.51%	0.78%	1.76%	-4.24%
NVR	75 Outperform	$18.11B	15.79	34.29%	―	3.61%	-6.94%
DHI	73 Outperform	$39.76B	17.70	13.81%	1.14%	-6.93%	-19.41%
TOL	69 Neutral	$12.97B	16.39	16.86%	0.70%	1.11%	-10.03%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
LEN	57 Neutral	$23.28B	30.47	8.04%	1.91%	-3.78%	-44.21%

Taylor Morrison Corporate Events

Taylor Morrison Announces Board Streamlining After Director Retirement

On March 11, 2026, Taylor Morrison director David Merritt notified the company that he would retire from the board effective at the 2026 Annual Meeting of Stockholders, with the company noting that his departure did not stem from any disagreement over its operations, policies or practices. In conjunction with his planned retirement, the board approved a reduction in its size from nine to eight members, signaling a modest streamlining of governance structure without indicating broader strategic or operational shifts for stakeholders.

The change in board composition, formalized in a filing signed on March 17, 2026 by Executive Vice President and Chief Legal Officer Todd Merrill, reflects a routine transition rather than a response to controversy or performance issues. While the move slightly concentrates board responsibilities among fewer directors, the company has presented it as an orderly succession step consistent with stable corporate governance practices.

The most recent analyst rating on (TMHC) stock is a Buy with a $69.00 price target. To see the full list of analyst forecasts on Taylor Morrison stock, see the TMHC Stock Forecast page.

Taylor Morrison Secures New $1 Billion Revolving Credit Facility

On December 22, 2025, Taylor Morrison Communities, Inc. amended and restated its existing revolving credit agreement, securing a $1 billion unsecured revolving loan facility with an uncommitted accordion feature of up to an additional $400 million and a five-year maturity from the closing date. The updated credit agreement sets interest rates and commitment fees tied to the company’s capitalization ratio and investment-grade ratings, introduces financial covenants including a maximum capitalization ratio and minimum consolidated tangible net worth, and maintains customary restrictive covenants and events of default, shaping the company’s liquidity profile and leverage discipline while preserving operational flexibility through voluntary prepayments and the absence of scheduled amortization.

The most recent analyst rating on (TMHC) stock is a Buy with a $70.00 price target. To see the full list of analyst forecasts on Taylor Morrison stock, see the TMHC Stock Forecast page.