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MTH

Meritage Homes NYSE:MTH Stock Report

Last Price

US$70.27

Market Cap

US$2.6b

7D

-4.2%

1Y

-27.8%

Updated

30 Sep, 2022

Data

Company Financials +
MTH fundamental analysis
Snowflake Score
Valuation3/6
Future Growth0/6
Past Performance5/6
Financial Health5/6
Dividends0/6

MTH Stock Overview

Meritage Homes Corporation, together with its subsidiaries, designs and builds single-family homes in the United States.

Meritage Homes Corporation Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Meritage Homes
Historical stock prices
Current Share PriceUS$70.27
52 Week HighUS$125.01
52 Week LowUS$62.51
Beta1.63
1 Month Change-10.31%
3 Month Change-8.97%
1 Year Change-27.80%
3 Year Change-2.78%
5 Year Change47.78%
Change since IPO2,782.84%

Recent News & Updates

Sep 18
Is Now The Time To Put Meritage Homes (NYSE:MTH) On Your Watchlist?

Is Now The Time To Put Meritage Homes (NYSE:MTH) On Your Watchlist?

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to...

Sep 02
These 4 Measures Indicate That Meritage Homes (NYSE:MTH) Is Using Debt Reasonably Well

These 4 Measures Indicate That Meritage Homes (NYSE:MTH) Is Using Debt Reasonably Well

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of...

Aug 31

Meritage Homes Is A Buy Despite Slowing Demand

Summary Although the demand outlook is slowing in the near term, the housing shortage and rising community count should partially offset its impact. Higher sales incentives and commissions are likely to put pressure on margins. With a low probability of inventory writedowns, MTH is a good bargain at its book value. Investment thesis Meritage Homes (MTH) should be adversely affected by the uptick in mortgage rates. However, despite short-term uncertainty, the long-term demand outlook is still strong with the supply shortage likely to act as long-term support for housing demand. The good long-term fundamentals coupled with MTH's recent rise in community count should act as a good tailwind for the company's topline offsetting some of the macro slowdown. While I am anticipating some pressure on the top line and margins, the probability of the company experiencing an inventory write-down is very low with current all-time high margins and the structural supply shortage. MTH is trading below its tangible book value which is a good bargain even if we consider slowing macros. Hence, I have a buy rating on the stock. Short-term demand uncertainties but positive long-term industry outlook Since the start of this year mortgage rates have climbed from 3.11% to 5.55%. The sharp rise in mortgage rates has made homebuyers skeptical about their mortgage payments and they are now hesitant about entering into a deal to purchase homes. Moreover, some homebuyers who had entered into a contract earlier are also cancelling due to the sudden surge in rates. Due to this MTH reported a significant surge in Q2 cancellations which increased from 8% to 13% Y/Y. With rising cancellation rates absorption pace also dropped to 4.4 against 5.5 a year ago. Meanwhile, total home orders were up 8% YoY to 3761 homes last quarter due to a sharp rise in community count from 226 in Q2 last year to 303 in Q2 this year. Looking forward, due to the rising mortgage rates, I anticipate the demand environment to remain slow in the near term. However, if one can look beyond the current tightening cycle and think a couple of years ahead when inflation will be under control, long-term fundamentals are solid. Due to the less-than-average supply of homes in the decade following the global financial crisis, the housing market is short of about five million homes according to a 2021 report by realtor.com. This has resulted in a record-low housing inventory, which stood at 747,526 single-family active listings in July compared to the ~1.2 mn to ~1.4 mn range prior to the Covid pandemic. I anticipate that housing demand will continue to be strong over the long term due to the historic undersupply of homes. Additionally, MTH's recent surge in community count, which increased by 35% year over year to 303 communities, should help the company's top line and partially help offset the near-term macro slowdown. Margins Should Normalize Over the past two years, the housing sector has seen unprecedented margin growth. MTH's gross margin increased from 18.8% in 2019 to an all-time high of 31.6% in the last quarter. SG&A, on the other hand, had decreased from 10.9% of revenue in 2019 to 8.3% in the last quarter. As a result, the pretax margin increased from 8.3% in 2019 to 23.5% last quarter. MTH Margins and SG,&A as a % of homebuilding revenues (Company Data)

Shareholder Returns

MTHUS Consumer DurablesUS Market
7D-4.2%-3.1%-2.5%
1Y-27.8%-33.6%-23.2%

Return vs Industry: MTH exceeded the US Consumer Durables industry which returned -32.6% over the past year.

Return vs Market: MTH underperformed the US Market which returned -21.5% over the past year.

Price Volatility

Is MTH's price volatile compared to industry and market?
MTH volatility
MTH Average Weekly Movement5.5%
Consumer Durables Industry Average Movement6.2%
Market Average Movement6.9%
10% most volatile stocks in US Market15.6%
10% least volatile stocks in US Market2.8%

Stable Share Price: MTH is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: MTH's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19851,773Phillippe Lordhttps://www.meritagehomes.com

Meritage Homes Corporation, together with its subsidiaries, designs and builds single-family homes in the United States. The company operates through two segments, Homebuilding and Financial Services. It acquires and develops land; and constructs, markets, and sells homes for first-time and first move-up buyers.

Meritage Homes Corporation Fundamentals Summary

How do Meritage Homes's earnings and revenue compare to its market cap?
MTH fundamental statistics
Market CapUS$2.57b
Earnings (TTM)US$905.55m
Revenue (TTM)US$5.48b

2.8x

P/E Ratio

0.5x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
MTH income statement (TTM)
RevenueUS$5.48b
Cost of RevenueUS$3.82b
Gross ProfitUS$1.66b
Other ExpensesUS$752.59m
EarningsUS$905.55m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Oct 26, 2022

Earnings per share (EPS)24.76
Gross Margin30.26%
Net Profit Margin16.53%
Debt/Equity Ratio34.0%

How did MTH perform over the long term?

See historical performance and comparison