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Meritage
(NYSE:MTH)
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Rating:63Neutral
Price Target:
$69.00
▼(-2.17% Downside)
Action:Reiterated
Date:08/26/26
The score is driven primarily by still-solid financial footing and improved recent cash generation, offset by a clearly cooling earnings/revenue trajectory and reduced returns. Technicals are neutral-to-soft, while valuation (mid-teens P/E plus ~2.5% yield) provides support. The latest earnings call reinforces near-term pressure via lowered guidance and margin headwinds, partially mitigated by cost actions, liquidity strength, and shareholder returns.
Positive Factors
Balance Sheet and Liquidity
Moderate leverage, available cash and substantial revolver capacity give Meritage flexibility to fund land, construction and operations through housing cycles. This liquidity cushion can support disciplined growth and reduce dependence on stressed capital markets when demand or cash conversion weakens.
Negative Factors
Demand and Revenue Contraction
Lower orders, absorption and closings point to weaker near-term demand and reduce the revenue base available to leverage fixed community costs. Management’s lowered outlook suggests the slowdown is broad enough to affect several quarters, limiting visibility into volume recovery over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance Sheet and Liquidity
Moderate leverage, available cash and substantial revolver capacity give Meritage flexibility to fund land, construction and operations through housing cycles. This liquidity cushion can support disciplined growth and reduce dependence on stressed capital markets when demand or cash conversion weakens.
Read all positive factors
Meritage (MTH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.33B
Dividend Yield2.93%
Average Volume (3M)713.05K
Price to Earnings (P/E)13.3
Beta (1Y)0.62
Revenue Growth-13.27%
EPS Growth-45.63%
CountryUS
Employees1,860
SectorConsumer Cyclical
Sector Strength84
IndustryResidential Construction
Share Statistics
EPS (TTM)4.80
Shares Outstanding65,174,095
10 Day Avg. Volume1,053,805
30 Day Avg. Volume713,055
Financial Highlights & Ratios
PEG Ratio-0.25
Price to Book (P/B)0.90
Price to Sales (P/S)0.80
P/FCF Ratio50.34
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$78.60Price Target Upside11.44% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)4.94
Revenue Forecast (FY)$5.39B
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 an...
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 upgrade...
Meritage Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Neutral
The call conveyed a balanced message: management highlighted strong operational execution — cost reductions, faster cycle times, inventory discipline, healthy balance sheet and active shareholder returns — that support resilience in a softer demand environment. However, key demand and financial metrics showed meaningful year-over-year deterioration (orders, closings, revenue, margins and EPS), and management lowered near-term guidance while noting land-cost-related margin headwinds. The tenor was pragmatic and defensive: focused on controlling what they can, positioning for recovery, but acknowledging continued near-term pressure tied to rates, incentives and higher land basis.Positive Updates
Quarterly Home Closings and Revenue
Closed 3.73 thousand homes in Q2 2026 generating $1.4 billion of home closing revenue; nearly 60% of closings were intra-quarter sales supporting quick conversion of demand.
Negative Updates
Decline in Orders and Absorption Pace
Q2 2026 sales orders totaled ~3.58 thousand, down 9% year-over-year; average absorption pace declined ~19% year-over-year to 3.5 net sales per community per month (from 4.3 a year ago).
Read all updates
Q2-2026 Updates
Positive
Negative
Quarterly Home Closings and Revenue
Closed 3.73 thousand homes in Q2 2026 generating $1.4 billion of home closing revenue; nearly 60% of closings were intra-quarter sales supporting quick conversion of demand.
Read all positive updates
Company Guidance
Meritage updated guidance centered on Q3 and full‑year 2026: for Q3 management expects 3.3k–3.6k home closings, home closing revenue of $1.26B–$1.35B, home closing gross margin around 18%, an effective tax rate of 24.5%–25% and diluted EPS of $1.10–$1.30; for full‑year they now expect home closings and revenue to be roughly 5% below 2025 (with revenue potentially lower if incentives rise). They reiterated community count growth of 5%–10% year over year (active communities = 340 at 6/30/26), a target spec supply near 4 months (15 specs per store, ~5.1k specs), and a backlog conversion target range of 175%–200% (Q2 was 200%). Capital and land guidance includes full‑year land acquisition/development of $1.7B–$2.0B with Q2 land spend of $357M, net debt to capital of 17.1% (ceiling mid‑20s), $87M cash and a $980M revolver (accordion to $1.47B), a minimum $55M per‑quarter buyback cadence ($230M repurchased YTD, $284M remaining authorization), and a maintained quarterly dividend of $0.48/share.Meritage Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
72
Positive
Cash Flow
66
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.45B | 5.86B | 6.40B | 6.14B | 6.29B | 5.14B |
| Gross Profit | 1.03B | 1.15B | 1.60B | 1.52B | 1.80B | 1.44B |
| EBITDA | 504.84M | 609.88M | 1.03B | 974.76M | 1.31B | 981.40M |
| Net Income | 329.27M | 453.01M | 786.19M | 738.75M | 992.19M | 737.44M |
Balance Sheet | ||||||
| Total Assets | 7.55B | 7.65B | 7.16B | 6.35B | 5.77B | 4.82B |
| Cash, Cash Equivalents and Short-Term Investments | 807.27M | 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 | 2.50B | 2.46B | 2.02B | 1.74B | 1.82B | 1.76B |
| Stockholders Equity | 5.06B | 5.20B | 5.14B | 4.61B | 3.95B | 3.04B |
Cash Flow | ||||||
| Free Cash Flow | 414.70M | 92.57M | -256.23M | 317.38M | 378.30M | -177.76M |
| Operating Cash Flow | 437.94M | 118.29M | -227.58M | 355.57M | 405.27M | -152.09M |
| Investing Cash Flow | -61.36M | -57.70M | -44.07M | -43.62M | -32.29M | -26.82M |
| Financing Cash Flow | -499.78M | 63.01M | 1.98M | -252.28M | -129.76M | 51.63M |
Meritage Technical Analysis
Negative
70.53
Price Trends
69.54
Negative
69.78
Negative
68.91
Negative
Market Momentum
-1.65
Negative
43.96
Neutral
55.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MTH, the sentiment is Negative. The current price of 70.53 is above the 20-day moving average (MA) of 65.54, above the 50-day MA of 69.54, and above the 200-day MA of 68.91, indicating a bearish trend. The MACD of -1.65 indicates Negative momentum. The RSI at 43.96 is Neutral, neither overbought nor oversold. The STOCH value of 55.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Meritage Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $3.61B | 11.35 | 9.97% | ― | -4.94% | -35.08% | |
69 Neutral | $40.31B | 13.31 | 12.77% | 1.28% | -3.54% | -15.86% | |
64 Neutral | $2.98B | 12.99 | 5.93% | 2.12% | -20.80% | -50.23% | |
63 Neutral | $4.33B | 13.30 | 6.38% | 2.93% | -13.27% | -45.63% | |
62 Neutral | $1.21B | 16.97 | 3.15% | ― | -16.52% | -57.00% | |
62 Neutral | $1.82B | 13.41 | 5.21% | 2.04% | -8.37% | -45.09% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
MTH
Meritage
64.98
-5.39
-7.66%
DHI
DR Horton
141.51
-23.71
-14.35%
KBH
KB Home
48.01
-14.17
-22.79%
MHO
M/I Homes
138.75
-6.97
-4.78%
LGIH
LGI Homes
49.99
-2.02
-3.88%
CCS
Century Communities
62.66
0.84
1.37%
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 comm...
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
Meritage Expands Revolving Credit Facility and Extends Maturity
Positive
Jun 29, 2026
On June 24, 2026, Meritage Homes Corporation executed a Twelfth Amendment to its Amended and Restated Credit Agreement, expanding its revolving credit facility to $980 million and enhancing the accordion feature to allow potential increases up to ...
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.