Why Meritage Homes (MTH) Is Down 7.9% After Reporting Lower Q3 Profits and New Buyback Milestone

• On October 28, 2025, Meritage Homes Corporation reported third quarter results showing year-over-year decreases in net income and earnings per share, provided fourth quarter 2025 diluted EPS guidance of US$1.51 to US$1.70, and updated progress on its ongoing share repurchase program.
• An important insight is the company's completion of buybacks totaling over 6.65 million shares, removing more than 9% of total shares outstanding since 2019, reflecting a robust capital return strategy amid changing profitability.
• With new fourth quarter earnings guidance, we'll examine how recent profit declines and continued buybacks impact Meritage Homes' investment narrative.

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Meritage Homes Investment Narrative Recap

Owning Meritage Homes often means believing sustained demand for new homes will eventually offset near-term affordability pressures and stretched margins. The recent third quarter results, showing sharp annual declines in net income and EPS, reinforce that the biggest current risk is continued margin compression from persistent affordability challenges. Short-term earnings visibility remains limited, and the new fourth quarter EPS guidance, while constructive, does not significantly alter the central catalyst or main risk facing the business right now.

Among the latest announcements, Meritage’s update on its buyback program stands out: the company has now repurchased over 6.65 million shares, or more than 9% of shares outstanding since 2019. Paired with lower earnings, this capital return effort may help support earnings per share in the face of margin and volume volatility, a key consideration as investors evaluate the possible timing of a demand recovery.

However, with affordability risks still pressuring gross margins, investors should be aware that if buyer hesitation intensifies and incentives remain high, then …

Read the full narrative on Meritage Homes (it's free!)

Meritage Homes is projected to reach $7.1 billion in revenue and $549.0 million in earnings by 2028. This forecast assumes a 4.8% annual revenue growth rate but a $89.3 million decrease in earnings from the current earnings of $638.3 million.

Uncover how Meritage Homes' forecasts yield a $83.88 fair value, a 28% upside to its current price.

Exploring Other Perspectives

Fair value estimates for Meritage Homes from four Simply Wall St Community members range from as low as US$29.07 to as high as US$225 per share. With ongoing margin pressures highlighted in recent results, you can see how opinions may widely differ and why it is worth exploring several alternative viewpoints here.

Explore 4 other fair value estimates on Meritage Homes - why the stock might be worth less than half the current price!

Build Your Own Meritage Homes Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Meritage Homes research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Meritage Homes research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Meritage Homes' overall financial health at a glance.

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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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