Meritage (MTH) AI Stock Analysis

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Meritage

(NYSE:MTH)

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Rating:62Neutral

Price Target:$75.00▲(12.73% Upside)

Action:reiterated

Date:10/29/26

The score is driven primarily by resilient (but weakening) financial performance: moderate leverage and strong current cash generation are offset by a clear TTM downturn in revenue and margins. Technicals add pressure as the stock remains below key longer-term moving averages with negative MACD. Valuation provides support via a reasonable P/E and a ~3% dividend yield, while the latest earnings call was cautious/negative due to demand and margin pressure and suspended near-term guidance.

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 (MTH) vs. SPDR S&P 500 ETF (SPY)

Market Cap: $4.33B
Dividend Yield: 2.81%
Average Volume (3M): 901.45K
Price to Earnings (P/E): 14.9
Beta (1Y): 0.49
Revenue Growth: -14.89%
EPS Growth: -41.01%
Country: US
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...

How the Company Makes Money

Meritage primarily makes money by selling newly built homes to homebuyers. The largest revenue stream is home closing revenue recognized when a home sale closes and control transfers to the buyer; pricing is driven by base home prices plus upgrades,...

Meritage Earnings Call Summary

Earnings Call Date:Oct 28, 2026(Q3-2026)|% Change Since:7.27%|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 Financial Statement Overview

Summary

Overall fundamentals are resilient but clearly down-cycle. Income statement trends weakened with TTM revenue down ~4.7% and net margin compressed to ~5.7% versus ~12–16% in 2022–2024. Balance sheet leverage is controlled (moderate debt-to-equity) and supports flexibility, while cash flow is currently strong (TTM OCF and FCF high with ~0.96x FCF-to-net income) but historically volatile with negative periods, typical of working-capital swings in homebuilding.

Income Statement

62Positive

Balance Sheet

74Positive

Cash Flow

66Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	5.20B	5.86B	6.40B	6.14B	6.29B	5.14B
Gross Profit	962.38M	1.15B	1.60B	1.52B	1.80B	1.44B
EBITDA	462.29M	609.88M	1.03B	974.76M	1.31B	981.40M
Net Income	297.75M	453.01M	786.19M	738.75M	992.19M	737.44M
Balance Sheet
Total Assets	7.59B	7.65B	7.16B	6.35B	5.77B	4.82B
Cash, Cash Equivalents and Short-Term Investments	677.50M	775.16M	651.55M	921.23M	861.56M	618.34M
Total Debt	1.85B	1.89B	1.39B	1.06B	1.17B	1.19B
Total Liabilities	2.55B	2.46B	2.02B	1.74B	1.82B	1.76B
Stockholders Equity	5.04B	5.20B	5.14B	4.61B	3.95B	3.04B
Cash Flow
Free Cash Flow	483.70M	92.57M	-256.23M	317.38M	378.30M	-177.76M
Operating Cash Flow	503.20M	118.29M	-227.58M	355.57M	405.27M	-152.09M
Investing Cash Flow	-51.26M	-57.70M	-44.07M	-43.62M	-32.29M	-26.82M
Financing Cash Flow	-503.37M	63.01M	1.98M	-252.28M	-129.76M	51.63M

Meritage Technical Analysis

Technical Analysis SentimentNeutral

Last Price66.53

Price Trends

50DMA63.90Positive

100DMA69.00Negative

200DMA67.99Negative

Market Momentum

MACD1.79Negative

RSI53.47Neutral

STOCH49.99Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MTH, the sentiment is Neutral. The current price of 66.53 is above the 20-day moving average (MA) of 64.39, above the 50-day MA of 63.90, and below the 200-day MA of 67.99, indicating a neutral trend. The MACD of 1.79 indicates Negative momentum. The RSI at 53.47 is Neutral, neither overbought nor oversold. The STOCH value of 49.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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.

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

MTH against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DHI	71Outperform	$40.63B	14.53	12.22%	1.25%	-3.52%	-12.68%
MTH	62Neutral	$4.33B	14.95	5.84%	2.81%	-14.89%	-41.01%
Sector *	61Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
MHO	60Neutral	$3.26B	11.95	8.64%	―	-5.81%	-38.43%
LGIH	55Neutral	$1.02B	13.92	3.35%	―	-1.94%	-32.74%
KBH	50Neutral	$3.07B	13.79	5.93%	2.00%	-20.80%	-50.30%
CCS	41Neutral	$1.53B	14.11	4.25%	2.36%	-7.44%	-45.88%

* Consumer Cyclical Sector Average

Performance Comparison

MTH and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
MTH	Meritage Homes Corp	66.53	1.87	2.89%
DHI	D.R. Horton Inc	147.48	5.34	3.76%
KBH	KB Home	50.04	-9.47	-15.91%
MHO	M/I Homes Inc	128.47	-0.86	-0.66%
LGIH	LGI Homes Inc	42.64	-5.62	-11.65%
CCS	Century Communities, Inc	53.06	-4.72	-8.16%

Meritage Corporate Events

Business Operations and StrategyExecutive/Board ChangesShareholder Meetings

Meritage Lowers Special Meeting Threshold, Sets Director Age Limit

Positive

Aug 25, 2026

On August 20, 2026, Meritage Homes Corporation’s Board of Directors amended the company’s bylaws to lower the ownership threshold required for shareholders to call a special meeting, cutting it from at least 50% to at least 25% of common stock. This...

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: Oct 29, 2026

Meritage AI Stock Analysis