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Taylor Morrison (TMHC)
NYSE:TMHC
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Taylor Morrison
(NYSE:TMHC)
Rating:77Outperform
Price Target:
$67.00
▲(9.08%Upside)
Positive Factors
Customer Segmentation
Taylor Morrison Home is expected to have resilient demand due to its lower exposure to entry-level buyers and a focus on more affluent customer segments.
Earnings Results
TMHC posted the most impressive 3Q results among the coverage, leading to increased estimates for gross margins and orders.
Financial Performance
The company's valuation is attractive, trading at a discount compared to other homebuilders with similar return on tangible equity.
Negative Factors
Interest Rate Environment
The price target drops slightly from $86 to $83 due to expectations of an at-best flat interest rate environment in 2025.
Market Risks
Risks for Taylor Morrison include soft housing demand, high mortgage rates, Florida exposure, rising land prices, and tariff uncertainty.
Taylor Morrison (TMHC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.15B
Dividend YieldN/A
Average Volume (3M)935.94K
Price to Earnings (P/E)7.1
Beta (1Y)1.09
Revenue Growth12.19%
EPS Growth23.15%
CountryUS
Employees3,000
SectorConsumer Cyclical
Sector Strength58
IndustryResidential Construction
Share Statistics
EPS (TTM)2.07
Shares Outstanding100,367,680
10 Day Avg. Volume1,089,327
30 Day Avg. Volume935,937
Financial Highlights & Ratios
PEG Ratio0.04
Price to Book (P/B)0.75
Price to Sales (P/S)0.00
P/FCF Ratio3.24
Enterprise Value/Market Cap0.87
Enterprise Value/Revenue0.17
Enterprise Value/Gross Profit2.63
Enterprise Value/Ebitda1.11
Forecast
1Y Price Target
$73.14Price Target Upside19.08% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
Taylor Morrison Business Overview & Revenue Model
Company DescriptionTaylor Morrison Home Corporation (TMHC) is a leading national homebuilder and developer based in the United States. The company operates primarily within the residential construction sector, focusing on building single-family detached and attached homes. Taylor Morrison is known for its diverse portfolio of high-quality homes tailored to a variety of consumer needs and preferences, including first-time, move-up, luxury, and active adult buyers. In addition to homebuilding, the company provides mortgage financing and title services, enhancing its comprehensive customer service offering.
How the Company Makes MoneyTaylor Morrison makes money primarily through the design, construction, and sale of residential homes. Its key revenue stream is the sale of single-family homes, which are developed on land owned by the company. Additional revenue is generated through various services offered to homebuyers, including mortgage financing through its subsidiary, Taylor Morrison Home Funding, and title services, which help streamline the home buying process. The company strategically acquires land in desirable locations and develops communities that appeal to a wide range of demographics. Significant partnerships with suppliers and contractors enable Taylor Morrison to manage costs effectively, contributing to its profitability. The company also benefits from its strong brand reputation and its ability to adapt to market trends, which helps maintain steady demand for its homes.
Taylor Morrison Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: 4.47%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted Taylor Morrison's strong financial performance in the first quarter of 2025, with notable increases in revenue, earnings per share, and book value. However, there are significant concerns regarding declining net orders, elevated spec home inventory, and increased incentives due to macroeconomic uncertainties. Overall, the sentiment reflects a cautious outlook amidst strong financial results.Q1-2025 Updates
Positive Updates
Strong Home Closings Revenue
Taylor Morrison delivered 3,048 homes at an average price of $600,000, resulting in $1.8 billion of home closings revenue, up 12% year-over-year.
Improved Gross Margin and Earnings Per Share
Adjusted home closings gross margin increased to 24.8%, up 80 basis points year-over-year. Adjusted earnings per diluted share increased by 25%.
Growth in Book Value Per Share
Book value per share grew 16% to approximately $58.
Increased SG&A Leverage
The company achieved 70 basis points of SG&A leverage.
Resilient Sales Pace
Monthly absorption rate increased to 3.3 per community from 2.6 in the fourth quarter, although down from 3.7 a year ago.
Strong Financial Position
Ended the quarter with liquidity of approximately $1.3 billion, including $378 million of unrestricted cash.
Record Share Repurchases
Repurchased 2.2 million shares of common stock for $135 million, targeting $350 million in total repurchases for 2025.
Negative Updates
Decline in Net Orders
Net orders decreased by 8% from the previous year's first quarter.
High Spec Home Inventory
Finished inventory at quarter end was elevated at 2.4 homes per community, leading to a reduction in starts by 6% year-over-year.
Reduced Guidance for Home Deliveries
Expectation of delivering between 13,000 to 13,500 homes this year, down from prior guidance of 13,500 to 14,000 homes.
Anticipated Increase in Incentives
Expect incentives to rise more meaningfully in the second quarter due to higher spec home inventory.
Projected Lower Average Closing Price
Average closing price expected to moderate to approximately $585,000 in the second quarter.
Macroeconomic Uncertainties
Challenges from rising interest rates, macroeconomic, and political uncertainties impacting buyer sentiment.
Weak Performance in Entry-Level Sales
Entry-level sales declined steeply, down 21% year-over-year.
Company Guidance
During Taylor Morrison's First Quarter 2025 Earnings Conference Call, the company provided guidance that highlighted a strong start to the year with 3,048 homes delivered at an average price of $600,000, generating $1.8 billion in home closings revenue, a 12% year-over-year increase. The adjusted home closings gross margin rose by 80 basis points to 24.8%, while SG&A leverage improved by 70 basis points, leading to a 25% increase in adjusted earnings per diluted share. The company experienced a sales absorption rate increase to 3.3 per community, although this was down from 3.7 a year ago. Despite macroeconomic pressures, the firm anticipates delivering between 13,000 to 13,500 homes this year with a gross margin around 23%. Taylor Morrison has adjusted its expected land investment to $2.4 billion from $2.6 billion and plans to repurchase approximately $350 million of shares. The long-term aim remains to achieve 20,000 closings by 2028, supported by strategic rationalization and product optimization.Taylor Morrison Financial Statement Overview
Summary
Taylor Morrison demonstrates strong financial health with robust profitability and efficient operational management. The company shows strong gross and net profit margins, low leverage, and significant free cash flow growth, although declining cash reserves warrant attention.Income Statement
Taylor Morrison shows strong financial performance with improving gross and net profit margins. The TTM gross profit margin is 24.27%, reflecting efficient cost management. The net profit margin of 10.84% indicates solid profitability. Revenue growth is positive, with a 12.74% increase from 2023 to 2024, and a further 2.4% growth into the TTM period. EBIT and EBITDA margins are robust at 14.99% and 15.36%, respectively, supporting strong operational performance.85
Very Positive
Balance Sheet
The balance sheet reflects financial stability with a debt-to-equity ratio of 0.01, indicating low leverage. The equity ratio of 63.49% suggests strong equity financing. Return on equity stands at 15.22%, showcasing effective use of shareholders' funds. However, a decline in cash reserves needs monitoring, as cash and short-term investments decreased over the period.78
Positive
Cash Flow
Cash flow analysis reveals a healthy free cash flow growth rate of 123%, highlighting strong cash generation capabilities. The operating cash flow to net income ratio of 0.47 and free cash flow to net income ratio of 0.43 indicate efficient cash flow management. Although financing cash flows are negative, this aligns with debt reduction efforts, which is a positive strategic move.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.36B | 8.17B | 7.42B | 8.22B | 7.50B | 6.13B |
| Gross Profit | 2.03B | 1.98B | 1.78B | 2.09B | 1.55B | 1.04B |
| EBITDA | 1.29B | 1.25B | 1.12B | 1.48B | 919.52M | 509.18M |
| Net Income | 906.50M | 883.31M | 768.93M | 1.05B | 663.03M | 243.44M |
Balance Sheet | ||||||
| Total Assets | 9.38B | 9.30B | 8.67B | 8.47B | 8.73B | 7.74B |
| Cash, Cash Equivalents and Short-Term Investments | 377.81M | 487.15M | 798.57M | 725.58M | 834.93M | 538.14M |
| Total Debt | 2.16B | 2.20B | 2.10B | 2.58B | 3.40B | 3.01B |
| Total Liabilities | 3.43B | 3.42B | 3.34B | 3.82B | 4.76B | 4.14B |
| Stockholders Equity | 5.95B | 5.87B | 5.31B | 4.63B | 3.93B | 3.50B |
Cash Flow | ||||||
| Free Cash Flow | 387.48M | 173.75M | 772.74M | 1.08B | 355.45M | 1.09B |
| Operating Cash Flow | 423.21M | 210.08M | 806.17M | 1.11B | 376.65M | 1.12B |
| Investing Cash Flow | -153.66M | -136.44M | -97.19M | -14.88M | -74.26M | -312.80M |
| Financing Cash Flow | -448.84M | -393.57M | -628.51M | -1.20B | -155.00K | -604.94M |
Taylor Morrison Technical Analysis
Positive
61.42
Price Trends
58.35
Positive
59.33
Positive
63.35
Negative
Market Momentum
0.82
Negative
59.84
Neutral
76.13
Neutral
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 61.42 is above the 20-day moving average (MA) of 58.85, above the 50-day MA of 58.35, and below the 200-day MA of 63.35, indicating a neutral trend. The MACD of 0.82 indicates Negative momentum. The RSI at 59.84 is Neutral, neither overbought nor oversold. The STOCH value of 76.13 is Neutral, 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 (56)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $11.22B | 8.48 | 18.09% | 0.87% | 1.59% | -8.04% | |
80 Outperform | $21.15B | 7.44 | 25.52% | 0.83% | 8.86% | 13.60% | |
77 Outperform | $6.15B | 7.14 | 15.97% | ― | 12.19% | 23.15% | |
76 Outperform | $21.56B | 15.20 | 38.25% | ― | 8.81% | 1.79% | |
73 Outperform | $28.92B | 9.11 | 13.06% | 1.81% | -1.20% | -17.61% | |
73 Outperform | $4.80B | 6.76 | 14.58% | 2.58% | -0.68% | -7.99% | |
56 Neutral | HK$23.98B | 4.09 | -1.57% | 6.81% | 0.06% | -64.88% |
* Consumer Cyclical Sector Average
Performance Comparison
TMHC
Taylor Morrison
61.42
7.53
13.97%
LEN
Lennar
110.61
-25.39
-18.67%
MTH
Meritage
66.97
-8.70
-11.50%
NVR
NVR
7,385.66
-75.04
-1.01%
PHM
PulteGroup
105.46
1.73
1.67%
TOL
Toll Brothers
114.13
3.82
3.46%
Taylor Morrison Corporate Events
Executive/Board ChangesShareholder Meetings
Taylor Morrison Holds 2025 Annual Stockholder Meeting
Positive
May 27, 2025
On May 22, 2025, Taylor Morrison Home Corporation held its 2025 Annual Meeting of stockholders, where nine directors were elected to serve until the 2026 meeting. Additionally, stockholders approved the executive compensation plan and ratified Deloitte & Touche LLP as the independent auditor for the fiscal year ending December 31, 2025. These decisions are expected to impact the company’s governance and financial oversight positively.
The most recent analyst rating on (TMHC) stock is a Buy with a $88.00 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.