Education
About Us
Working with TipRanks
Follow Us
Taylor Morrison (TMHC)
NYSE:TMHC
Top Page
Taylor Morrison
(NYSE:TMHC)
Select Model
Select Model
Rating:76Outperform
Price Target:
$77.00
▲(13.64% Upside)
Taylor Morrison's strong financial performance and bullish technical indicators are the primary drivers of its stock score. The company's undervaluation adds to its appeal, although the lack of a dividend yield and mixed earnings call sentiment present some risks. Overall, the stock is well-positioned but faces challenges from market pressures and increased cancellations.
Positive Factors
Revenue Growth
Consistent revenue growth from home closings indicates strong market demand and effective sales strategies, supporting long-term business stability.
Financial Health
Strong liquidity and access to credit enhance financial flexibility, allowing the company to invest in growth opportunities and weather economic fluctuations.
Cash Flow Management
Robust cash flow management supports operational efficiency and provides resources for strategic investments, ensuring sustainable growth.
Negative Factors
Increased Cancellation Rate
Rising cancellation rates reflect decreased consumer confidence, potentially impacting future revenue and indicating market volatility.
Spec Sales Impacting Margins
Higher reliance on spec sales could pressure margins, affecting profitability and indicating a shift in consumer preferences.
Order Decline
A decline in net orders suggests weakening demand, which could challenge revenue growth and market positioning in the coming months.
Taylor Morrison (TMHC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.70B
Dividend YieldN/A
Average Volume (3M)1.18M
Price to Earnings (P/E)7.8
Beta (1Y)0.97
Revenue Growth13.77%
EPS Growth28.57%
CountryUS
Employees3,000
SectorConsumer Cyclical
Sector Strength84
IndustryResidential Construction
Share Statistics
EPS (TTM)1.92
Shares Outstanding98,843,210
10 Day Avg. Volume1,265,787
30 Day Avg. Volume1,176,112
Financial Highlights & Ratios
PEG Ratio0.38
Price to Book (P/B)1.09
Price to Sales (P/S)0.78
P/FCF Ratio36.68
Enterprise Value/Market Cap1.23
Enterprise Value/Revenue0.98
Enterprise Value/Gross Profit4.04
Enterprise Value/Ebitda6.27
Forecast
1Y Price Target
$76.14Price Target Upside12.37% 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 headquartered in Scottsdale, Arizona, specializing in the development of residential communities across the United States. The company focuses on a diverse range of homebuilding sectors including single-family homes, townhomes, and condominiums, catering to various demographics from first-time homebuyers to luxury home seekers. In addition to homebuilding, TMHC also provides related services, including mortgage financing and title services through its subsidiaries, enhancing the customer experience and streamlining the home purchasing process.
How the Company Makes MoneyTaylor Morrison generates revenue primarily through the sale of residential properties. The company constructs homes and communities, selling these homes directly to consumers or through real estate agents. Key revenue streams include the sale of new homes, which account for the majority of its earnings, as well as revenue from financial services, including mortgage origination and title insurance. Additionally, TMHC may benefit from land development and management services. The company's strategic partnerships with suppliers and subcontractors help manage construction costs and timelines, contributing to its profitability. Market demand, favorable interest rates, and economic conditions also play significant roles in influencing its revenue.
Taylor Morrison Earnings Call Summary
Earnings Call Date:Jul 23, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment with strong financial performance and strategic investments offset by challenges in sales absorption, increased cancellations, and competitive pressures affecting margins.Q2-2025 Updates
Positive Updates
Solid Home Closings Revenue
Taylor Morrison delivered 3,340 homes at an average price of $589,000, generating $2 billion in home closings revenue with an adjusted home closings gross margin of 23%.
Financial Services Performance
Financial services revenue reached $53 million with a gross margin of 51.1%, and a strong capture rate of 87% during the quarter.
Resilient Esplanade Segment
Esplanade's net sales orders declined by only 8% compared to 12% for the entire company, with home closings gross margin slightly improved year-over-year in the high 20% range.
Strategic Land Investments
Invested $612 million in homebuilding land during the quarter, with 43% allocated to lot development, and a goal to control at least 65% of lots through options and off-balance sheet structures.
Strong Balance Sheet and Liquidity
Ended the quarter with $1.1 billion in liquidity, including $130 million in cash and $952 million in revolving credit capacity. Net homebuilding debt to capitalization ratio was 22.9%.
Negative Updates
Lower Absorption Pace
Monthly net absorption pace moderated to 2.6 per community, consistent with historic averages but lower than expectations due to competitive pressures and a pickup in cancellations.
Higher Cancellation Rate
Cancellation rate increased to 14.6% of gross orders, up from 9.4% a year ago, reflecting decreased consumer confidence and backlog customer deposits of approximately $47,000 per home.
Increased Spec Sales Impacting Margins
Spec sales increased to 71% of total sales, with gross margins below that of to-be-built homes. This shift is expected to impact home closings gross margin in the third and fourth quarter.
Order Decline
Net orders decreased 12% year-over-year, with entry-level and resort lifestyle segments down in the high-teen range, and move-up sales down in the mid-single digits.
Pricing Pressure in Some Markets
Some pressure on pricing due to increased competitive incentives, particularly in spec sales, with expected gross margin moderation to approximately 22% in the third quarter.
Company Guidance
During Taylor Morrison's Second Quarter 2025 Earnings Conference Call, the company reported delivering 3,340 homes at an average price of $589,000, resulting in $2 billion in home closings revenue. The adjusted home closings gross margin was 23%, with a 90 basis points improvement in SG&A expense leverage. The company highlighted a spec sales share increase to 71%, including a notable 50% in their Esplanade segment, driven by consumer preference for inventory homes due to competitive incentives. The fiscal outlook anticipates a slight moderation in gross margins to approximately 22% in the third and fourth quarters, with an expected full-year gross margin of 23%. Taylor Morrison emphasized its strategic focus on maintaining a balanced portfolio of to-be-built and spec homes, targeting a low to mid-20% gross margin range long-term, despite market pressures. The discussion also covered the introduction of a new 3.75% conventional 7-year adjustable-rate mortgage program to enhance purchasing power, reflecting the company's commitment to personalized incentives and consumer education.Taylor Morrison Financial Statement Overview
Summary
Taylor Morrison exhibits strong financial health with consistent revenue growth, solid profitability, and improved leverage ratios. The company effectively manages its cash flows, supporting ongoing operations and growth initiatives. While maintaining a strong equity position, Taylor Morrison is well-positioned to navigate industry challenges and capitalize on opportunities.Income Statement
Taylor Morrison has shown robust revenue growth over the past periods, with a recent TTM revenue increase of 2.88% from the previous year. The company maintains a solid gross profit margin of 24.1% and a net profit margin of 10.75% for the TTM, indicating strong profitability. EBIT and EBITDA margins are healthy at 15.03% and 15.4%, respectively. Overall, the income statement reflects a stable and profitable growth trajectory.85
Very Positive
Balance Sheet
The company's balance sheet reveals a favorable equity ratio of 64.09%, suggesting a strong equity position relative to total assets. The debt-to-equity ratio has improved significantly to 0.012 in the latest TTM, enhancing the financial stability. Return on Equity (ROE) stands at 14.91% for TTM, reflecting efficient equity utilization, though slightly lower than the previous year's 15.06%.78
Positive
Cash Flow
Taylor Morrison displays a positive trend in cash flow management, with a significant free cash flow growth rate of 182.21% in the TTM. The operating cash flow to net income ratio is robust at 0.58, while the free cash flow to net income ratio is commendable at 0.54, indicating strong cash generation relative to net earnings.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.40B | 8.17B | 7.42B | 8.22B | 7.50B | 6.13B |
| Gross Profit | 2.04B | 2.01B | 1.79B | 2.12B | 1.56B | 1.06B |
| EBITDA | 1.32B | 1.28B | 1.13B | 1.51B | 894.79M | 529.26M |
| Net Income | 903.29M | 883.31M | 768.93M | 1.05B | 663.03M | 243.44M |
Balance Sheet | ||||||
| Total Assets | 9.45B | 9.30B | 8.67B | 8.47B | 8.73B | 7.74B |
| Cash, Cash Equivalents and Short-Term Investments | 130.17M | 487.15M | 798.57M | 724.49M | 832.82M | 532.84M |
| Total Debt | 2.17B | 2.20B | 2.10B | 2.58B | 3.40B | 3.01B |
| Total Liabilities | 3.39B | 3.42B | 3.34B | 3.82B | 4.76B | 4.14B |
| Stockholders Equity | 6.05B | 5.87B | 5.31B | 4.63B | 3.93B | 3.50B |
Cash Flow | ||||||
| Free Cash Flow | 490.33M | 173.75M | 772.74M | 1.08B | 355.45M | 1.09B |
| Operating Cash Flow | 525.41M | 210.08M | 806.17M | 1.11B | 376.65M | 1.12B |
| Investing Cash Flow | -135.25M | -136.44M | -97.19M | -14.88M | -74.26M | -312.80M |
| Financing Cash Flow | -504.67M | -393.57M | -628.51M | -1.20B | -155.00K | -604.94M |
Taylor Morrison Technical Analysis
Neutral
67.76
Price Trends
66.03
Positive
62.66
Positive
62.27
Positive
Market Momentum
0.75
Positive
48.97
Neutral
25.65
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TMHC, the sentiment is Neutral. The current price of 67.76 is below the 20-day moving average (MA) of 68.87, above the 50-day MA of 66.03, and above the 200-day MA of 62.27, indicating a neutral trend. The MACD of 0.75 indicates Positive momentum. The RSI at 48.97 is Neutral, neither overbought nor oversold. The STOCH value of 25.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | 50.17B | 13.49 | 16.48% | 0.95% | -7.31% | -16.37% | |
78 Outperform | 26.02B | 9.86 | 21.81% | 0.67% | 5.04% | 2.07% | |
78 Outperform | 13.46B | 10.27 | 16.99% | 0.69% | 3.26% | -6.40% | |
76 Outperform | $6.70B | 7.82 | 15.59% | ― | 13.77% | 28.57% | |
69 Neutral | 23.23B | 17.08 | 39.53% | ― | 5.87% | -1.74% | |
68 Neutral | 32.79B | 10.53 | 14.42% | 1.56% | -1.26% | -17.78% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
Performance Comparison
TMHC
Taylor Morrison
67.76
-2.43
-3.46%
DHI
DR Horton
168.30
-23.02
-12.03%
LEN
Lennar
127.32
-48.49
-27.58%
NVR
NVR
8,094.70
-1,613.01
-16.62%
PHM
PulteGroup
131.90
-10.53
-7.39%
TOL
Toll Brothers
139.69
-12.57
-8.26%
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.