Meritage (MEY) AI Stock Analysis

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Meritage

(Frankfurt:MEY)

Rating:―N/A

Action:N/A

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Positive Factors

Strong liquidity and manageable leverageStrong liquidity and controlled leverage provide Meritage with resilience during a housing downturn. The company can fund land and construction needs, preserve its dividend, and respond to changing demand without relying heavily on additional borrowing or sacrificing strategic flexibility.

Negative Factors

Demand and revenue contractionLower orders and closings indicate that weaker buyer demand is affecting both future backlog and current revenue. If reduced absorption persists, Meritage may operate its communities less efficiently, constrain volume growth, and face ongoing pressure on earnings despite its broad land position.

Meritage (MEY) vs. iShares MSCI Germany ETF (EWG)

Market Cap: EUR 4.17B
Dividend Yield: 2.65%
Average Volume (3M): 82
Price to Earnings (P/E): 14.5
Beta (1Y): 0.75
Revenue Growth: -19.16%
EPS Growth: -44.19%
Country: Germany
Employees: 1,860
Sector: Consumer Cyclical
Sector Strength: 61
Industry: Residential Construction

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 and f...

Meritage Earnings Call Summary

Earnings Call Date:Oct 28, 2026(Q3-2026)|% Change Since:3.51%|Next Earnings Date:Feb 03, 2027

Earnings Call SentimentNegative

The call reflected a cautious and pressured operating environment. Meritage reported substantial declines in orders, closings, revenue, margins, and earnings, alongside higher mortgage rates, elevated incentives, inventory impairments, and limited visibility that led management to withdraw near-term guidance. Offsetting factors included strong liquidity, low leverage, disciplined cost and inventory management, stable buyer credit quality, selected regional strength, and a flexible land and operating model. However, the magnitude of the year-over-year financial declines and the expectation of continued near-term market and margin pressure make the overall tone negative.

Positive Updates

Strong Liquidity and Conservative Leverage

As of September 30, 2026, Meritage had $677 million in cash, no outstanding borrowings under its credit facility, and an 18.9% net debt-to-capital ratio, below its mid-20% target.

Negative Updates

Orders Declined Despite Higher Store Count

Third-quarter sales orders totaled 3,083, down 15% year over year despite a higher community count. Philippe Lord attributed the decline primarily to a 21% decrease in average absorption pace, partially offset by a 7% increase in average community count.

Company Guidance

Management said it does not believe it is prudent to provide Q4 or preliminary 2026 guidance at this time, but reiterated 5%-10% full year 2026 community count growth year over year, expects full-year land acquisition and development spend below $1.5 billion, and targets 175%-200% backlog conversion, four to six months of supply, and a 22.5%-23.5% long-term adjusted gross margin under normalized market conditions; over a 12-month period, it will try to operate between three and four net sales per month, does not think it would operate below 3.0 over an extended period of time, plans to be on the low end of the four to six months of sales range for 2027, maintains a four to five year land supply target, an off-balance sheet target still around 40%, and targets net debt to cap in the low 20s while continuing to pay its dividend; first move-up product is expected to represent about one-third of the overall portfolio, with a higher mix of first move-up sales, orders, and closings beginning in the back half of 2028 and into 2029.

Meritage Risk Analysis

Meritage disclosed 32 risk factors in its most recent earnings report. Meritage reported the most risks in the "Production" category.

Production - Risks related to the company’s ability to manufacture goods and services

Latest Risks Added

0 New Risks

Meritage Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

DE:MEY against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DHI	71Outperform	$39.21B	14.34	12.22%	1.27%	-3.52%	-12.68%
Sector *	61Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
MHO	60Neutral	$3.17B	11.81	8.64%	―	-5.81%	-38.43%
LGIH	55Neutral	$956.88M	13.48	3.35%	―	-1.94%	-32.74%
KBH	50Neutral	$2.94B	13.20	5.93%	2.09%	-20.80%	-50.30%
CCS	41Neutral	$1.47B	13.66	4.25%	2.43%	-7.44%	-45.88%

* Consumer Cyclical Sector Average

Performance Comparison

DE:MEY and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
DE:MEY	Meritage Homes Corp	59.00	3.57	6.43%
DHI	D.R. Horton Inc	145.55	9.47	6.96%
KBH	KB Home	47.90	-9.58	-16.67%
MHO	M/I Homes Inc	126.96	2.86	2.30%
LGIH	LGI Homes Inc	41.29	-4.57	-9.97%
CCS	Century Communities, Inc	51.36	-3.95	-7.15%

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.

Meritage AI Stock Analysis