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Taylor Morrison (TMHC)
NYSE:TMHC

Taylor Morrison (TMHC) AI Stock Analysis

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TMHC

Taylor Morrison

(NYSE:TMHC)

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Outperform 71 (OpenAI - 5.2)
Rating:71Outperform
Price Target:
$65.00
▲(2.41% Upside)
TMHC scores well overall due to strong financial health (profitability, very low leverage, improving cash flow) and an attractive low P/E valuation. The score is held back by weak technical momentum (below key moving averages with negative MACD) and earnings-call demand indicators (lower orders and materially reduced backlog), which introduce near-term revenue risk.
Positive Factors
Strong Financial Health
Taylor Morrison's robust financial health, characterized by strong profitability and low leverage, provides a solid foundation for long-term growth and resilience against market fluctuations.
Innovative Digital Initiatives
The introduction of an AI-powered digital assistant reflects Taylor Morrison's commitment to innovation, potentially enhancing customer engagement and operational efficiency, supporting long-term competitive advantage.
Liquidity and Financial Flexibility
The new $1 billion revolving credit facility enhances Taylor Morrison's liquidity and financial flexibility, enabling strategic investments and operational resilience over the long term.
Negative Factors
Decline in Net Orders
A decline in net orders indicates potential challenges in demand, which could impact future revenue growth and market share if not addressed.
Backlog Reduction
A significant reduction in backlog suggests potential revenue shortfalls in the near future, posing a risk to Taylor Morrison's growth trajectory and financial performance.
Challenging Market Conditions in Texas
Challenging market conditions in Texas, a key region, could hinder Taylor Morrison's sales and profitability, necessitating strategic adjustments to maintain market position.

Taylor Morrison (TMHC) vs. SPDR S&P 500 ETF (SPY)

Taylor Morrison Business Overview & Revenue Model

Company DescriptionTaylor 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 MoneyTaylor Morrison generates revenue primarily through the sale of newly constructed homes, which represent its core revenue stream. The company earns money by acquiring land, developing residential communities, and building homes that are then sold to individual buyers. Additionally, TMHC generates revenue from the sale of homes in its active adult and multi-family segments. The company also benefits from strategic partnerships with suppliers and subcontractors, which help control costs and improve efficiency in the construction process. Furthermore, Taylor Morrison may engage in joint ventures and collaborations with other developers, enhancing its market reach and financial performance.

Taylor Morrison Earnings Call Summary

Earnings Call Date:Oct 22, 2025
(Q3-2025)
|
% Change Since: |
Next Earnings Date:Feb 11, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong performance in several areas such as financial services, digital innovation, and improved cycle times, while facing challenges like a decline in net orders, reduced backlog, and market difficulties in specific regions like Texas. The company's strategic focus on cost management and innovation provides a positive outlook despite existing challenges.
Q3-2025 Updates
Positive Updates
Strong Third Quarter Results
Taylor Morrison Home Corporation reported strong third-quarter results, meeting or exceeding guidance on all key metrics including home closings volume, price, and gross margin.
AI-Powered Digital Assistant Launch
The company launched an industry-first AI-powered digital assistant to enhance customer experience by providing dynamic data-driven guidance, improving lead generation and customer acquisition.
Improved Cycle Times and SG&A Leverage
Realized approximately 30 days faster cycle times than a year ago and improved SG&A leverage by 80 basis points year over year.
Financial Services Revenue and Gross Margin Increase
Financial services revenue increased to $56 million with a gross margin of 52.5%, up from $50 million and 45% respectively a year ago.
Net Homebuilding Debt Reduction
Net homebuilding debt to capitalization ratio improved to 21.3%, down from 22.5% a year ago.
Negative Updates
Decline in Net Orders
Net orders in the third quarter totaled 2,468 homes, down just under 13% year over year due to a moderation in monthly absorption pace.
Backlog Reduction
Backlog down nearly 40% in dollar terms year over year, impacting revenue outlook for the next fiscal year.
Challenging Market Conditions in Texas
Texas markets faced tougher conditions with elevated inventories and competitive pressures affecting volume.
Entry-Level Segment Challenges
The entry-level segment pulled back due to affordability constraints and competition, requiring more aggressive incentives.
Company Guidance
During the Taylor Morrison Home Corporation's 2025 third-quarter earnings call, the company reported strong results, meeting or exceeding guidance across key metrics such as home closings volume, average closing price, and gross margin. They delivered 3,324 homes at an average price of $602,000, resulting in home closings revenue of $2 billion. Their adjusted home closing gross margin was 22.4%, slightly ahead of expectations. The company maintained a healthy SG&A ratio of 9% of home closings revenue, demonstrating effective cost management. Net orders for the quarter totaled 2,468 homes, and their monthly absorption pace was 2.4 homes per community. The company owned or controlled 84,564 homebuilding lots, with a focus on expanding their portfolio with over 100 new community openings anticipated in the next year. Taylor Morrison emphasized their strategic priorities, including leveraging innovative sales tools and maintaining a balanced approach to inventory and pricing to navigate ongoing market uncertainties.

Taylor Morrison Financial Statement Overview

Summary
Taylor Morrison demonstrates strong financial health with solid profitability, a stable balance sheet, and improving cash flows. Despite recent challenges in revenue growth, the company maintains efficient operations and a strong capital structure.
Income Statement
78
Positive
Taylor Morrison's income statement shows strong profitability with a consistent gross profit margin around 24% and a net profit margin above 10% in recent periods. However, the revenue growth rate has been negative in the TTM, indicating a decline in sales. Despite this, the company maintains solid EBIT and EBITDA margins, reflecting efficient operations.
Balance Sheet
82
Very Positive
The balance sheet is robust with a low debt-to-equity ratio of 0.012 in the TTM, indicating strong financial stability. The return on equity is healthy at 14.24%, showing effective use of equity to generate profits. The equity ratio is also strong, suggesting a solid capital structure with a significant portion of assets financed by equity.
Cash Flow
75
Positive
Cash flow analysis reveals a positive free cash flow growth rate of 18.29% in the TTM, indicating improved cash generation. The operating cash flow to net income ratio is above 1, suggesting good cash conversion from earnings. However, the free cash flow to net income ratio is slightly below 1, indicating room for improvement in cash flow efficiency.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue8.38B8.17B7.42B8.22B7.50B6.13B
Gross Profit2.01B2.01B1.79B2.12B1.56B1.06B
EBITDA1.28B1.28B1.13B1.51B894.79M529.26M
Net Income853.61M883.31M768.93M1.05B663.03M243.44M
Balance Sheet
Total Assets9.63B9.30B8.67B8.47B8.73B7.74B
Cash, Cash Equivalents and Short-Term Investments370.59M487.15M798.57M724.49M832.82M532.84M
Total Debt2.26B2.20B2.10B2.58B3.40B3.01B
Total Liabilities3.43B3.42B3.34B3.82B4.76B4.14B
Stockholders Equity6.18B5.87B5.31B4.63B3.93B3.50B
Cash Flow
Free Cash Flow580.03M173.75M772.74M1.08B355.45M1.09B
Operating Cash Flow619.33M210.08M806.17M1.11B376.65M1.12B
Investing Cash Flow-148.20M-136.44M-97.19M-14.88M-74.26M-312.80M
Financing Cash Flow-357.51M-393.57M-628.51M-1.20B-155.00K-604.94M

Taylor Morrison Technical Analysis

Technical Analysis Sentiment
Positive
Last Price63.47
Price Trends
50DMA
60.71
Positive
100DMA
63.07
Positive
200DMA
61.71
Positive
Market Momentum
MACD
0.72
Negative
RSI
58.86
Neutral
STOCH
86.32
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TMHC, the sentiment is Positive. The current price of 63.47 is above the 20-day moving average (MA) of 60.62, above the 50-day MA of 60.71, and above the 200-day MA of 61.71, indicating a bullish trend. The MACD of 0.72 indicates Negative momentum. The RSI at 58.86 is Neutral, neither overbought nor oversold. The STOCH value of 86.32 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TMHC.

Taylor Morrison Risk Analysis

Taylor Morrison disclosed 40 risk factors in its most recent earnings report. Taylor Morrison reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Taylor Morrison Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$13.77B10.7416.89%0.70%1.11%-10.03%
71
Outperform
$6.20B7.6414.31%6.98%9.74%
70
Outperform
$21.53B16.6434.80%3.61%-6.94%
70
Outperform
$25.48B10.0721.57%0.78%1.76%-4.24%
66
Neutral
$46.53B13.7714.48%1.14%-6.93%-19.41%
61
Neutral
$18.38B12.79-2.54%3.03%1.52%-15.83%
59
Neutral
$30.59B15.218.28%1.91%-3.78%-44.21%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TMHC
Taylor Morrison
63.47
-2.91
-4.38%
DHI
DR Horton
159.30
14.42
9.95%
LEN
Lennar
121.39
-11.53
-8.67%
NVR
NVR
7,580.76
-775.05
-9.28%
PHM
PulteGroup
130.73
14.73
12.70%
TOL
Toll Brothers
144.92
11.75
8.82%

Taylor Morrison Corporate Events

Business Operations and StrategyPrivate Placements and Financing
Taylor Morrison Secures New $1 Billion Revolving Credit Facility
Positive
Dec 23, 2025

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.

Executive/Board Changes
Taylor Morrison Appoints Amanda Whalen to Board
Positive
Dec 16, 2025

On December 10, 2025, Taylor Morrison Home Corporation announced the appointment of Amanda Whalen as an independent member of its Board of Directors, effective March 1, 2026. Whalen, who brings over 25 years of finance and strategic leadership experience, is expected to contribute significantly to the company’s focus on long-term growth and digital business model transformation. Her appointment increases the board’s composition from eight to nine members, enhancing the board’s range of skills and experience.

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.

Business Operations and StrategyPrivate Placements and Financing
Taylor Morrison Issues $525M in Senior Notes
Positive
Nov 10, 2025

On November 10, 2025, Taylor Morrison Communities, Inc., a subsidiary of Taylor Morrison Home Corporation, issued $525 million in 5.750% Senior Notes due 2032, which are senior unsecured obligations guaranteed by the company’s subsidiaries. The proceeds from this issuance were partially used to fund a tender offer for the company’s outstanding 5.875% Senior Notes due 2027, with approximately $479.2 million of these notes purchased. Additionally, the company completed the redemption of all its 6.625% Senior Notes due 2027, marking a strategic financial restructuring aimed at optimizing its debt profile.

The most recent analyst rating on (TMHC) stock is a Hold with a $66.00 price target. To see the full list of analyst forecasts on Taylor Morrison stock, see the TMHC Stock Forecast page.

Business Operations and StrategyPrivate Placements and Financing
Taylor Morrison Announces Tender Offer Results
Positive
Nov 10, 2025

On November 10, 2025, Taylor Morrison Home Corporation announced the expiration and results of a cash tender offer by its subsidiary, Taylor Morrison Communities, Inc., for its outstanding 5.875% Senior Notes due 2027. The offer, which commenced on November 3, 2025, saw a significant portion of the notes tendered and accepted for purchase, with payments expected to be made on the same day. The company plans to use proceeds from a new issuance of 5.750% senior notes due 2032 to fund the purchase, alongside cash on hand. This strategic financial maneuver is aimed at optimizing the company’s debt structure and reflects its proactive approach in managing its financial obligations.

The most recent analyst rating on (TMHC) stock is a Hold with a $66.00 price target. To see the full list of analyst forecasts on Taylor Morrison stock, see the TMHC Stock Forecast page.

Business Operations and StrategyPrivate Placements and Financing
Taylor Morrison Announces Cash Tender Offer Pricing
Neutral
Nov 7, 2025

On November 7, 2025, Taylor Morrison Home Corporation announced the pricing terms for a cash tender offer by its subsidiary, Taylor Morrison Communities, Inc., for all outstanding 5.875% Senior Notes due 2027. This offer is part of a strategic financial maneuver to manage the company’s debt, with the expectation to use proceeds from a senior notes offering and cash reserves for the purchase. The offer, which is not contingent on a minimum amount of notes being tendered, is set to expire on the same day, with payment expected by November 10, 2025. The company has also issued a conditional notice of redemption for any remaining notes, indicating a proactive approach to financial management.

The most recent analyst rating on (TMHC) stock is a Hold with a $66.00 price target. To see the full list of analyst forecasts on Taylor Morrison stock, see the TMHC Stock Forecast page.

Private Placements and Financing
Taylor Morrison Announces $525M Senior Notes Offering
Neutral
Nov 3, 2025

On November 3, 2025, Taylor Morrison Home Corporation announced the pricing of a $525 million senior notes offering by its subsidiary, Taylor Morrison Communities, Inc., with an interest rate of 5.750% due in 2032. The proceeds will be used to manage existing debt obligations, including purchasing and redeeming senior notes due in 2027, and to cover related fees and expenses, thereby potentially improving the company’s financial positioning.

The most recent analyst rating on (TMHC) stock is a Hold with a $66.00 price target. To see the full list of analyst forecasts on Taylor Morrison stock, see the TMHC Stock Forecast page.

Business Operations and StrategyPrivate Placements and Financing
Taylor Morrison Announces $525M Senior Notes Offering
Positive
Nov 3, 2025

On November 3, 2025, Taylor Morrison Home Corporation announced that its subsidiary, Taylor Morrison Communities, Inc., initiated a private offering of $525 million in senior notes due 2032. The proceeds from this offering, along with cash on hand, will be used to purchase and redeem various outstanding senior notes due 2027, including those issued by William Lyon Homes, Inc., and to cover related fees and expenses. This strategic financial maneuver aims to optimize the company’s debt structure and potentially improve its financial standing in the market.

The most recent analyst rating on (TMHC) stock is a Hold with a $66.00 price target. To see the full list of analyst forecasts on Taylor Morrison stock, see the TMHC Stock Forecast page.

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.Date of analysis: Dec 25, 2025