Evaluating Meritage Homes (MTH) Valuation After a Year of Share Price Underperformance

Meritage Homes (MTH) has quietly lagged the market this year, with the stock down about 5% year-to-date and roughly 18% over the past year despite steady revenue and profit growth.

See our latest analysis for Meritage Homes.

At a share price of $72.23, Meritage’s 1 month share price return of nearly 9% hints that sentiment may be stabilising after a tougher stretch, even though the 1 year total shareholder return remains firmly negative.

If Meritage’s recent rebound has you rethinking where the next leg of growth could come from, it might be worth exploring fast growing stocks with high insider ownership.

With earnings still growing, a modest discount to analyst targets and a strong multi year track record, investors now face a key question: is Meritage Homes undervalued or is the market already pricing in its future growth?

Most Popular Narrative: 12.6% Undervalued

With Meritage Homes last closing at $72.23 against a narrative fair value of $82.63, the current price implies room for upside if those assumptions hold.

Meritage's significant and accelerating growth in community count including double digit expansion for both 2025 and 2026 directly addresses the persistent undersupply of housing in the U.S., positioning the company to capture increased new home demand and drive future revenue and earnings growth as macro headwinds abate.

Read the complete narrative.

Curious how modest top line growth, thinner margins and a richer future earnings multiple can still add up to upside from here? The narrative’s playbook leans on disciplined capital allocation, steady community expansion and a valuation multiple more often reserved for faster growing peers. Want to see exactly how those moving parts combine into today’s fair value call?

Result: Fair Value of $82.63 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent affordability pressures and thinner margins could quickly undermine Meritage's growth thesis if demand softens or price cuts deepen beyond expectations.

Find out about the key risks to this Meritage Homes narrative.

Build Your Own Meritage Homes Narrative

If this perspective does not fully resonate or you prefer to dig into the numbers yourself, you can build a complete view in minutes: Do it your way.

A great starting point for your Meritage Homes research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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