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1. Company Snapshot

1.a. Company Description

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.


The company also offers title insurance and closing/settlement services to its homebuyers.It builds and sells homes in Texas, Arizona, California, Colorado, Florida, North Carolina, South Carolina, Georgia, and Tennessee under the Meritage Homes brand name.Meritage Homes Corporation was founded in 1985 and is based in Scottsdale, Arizona.

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1.b. Last Insights on MTH

Meritage Homes Corporation's recent performance was negatively impacted by a miss in Q3 earnings and revenue estimates. The company's quarterly earnings of $1.39 per share fell short of the Zacks Consensus Estimate of $1.71 per share, and revenue declined compared to the year-ago period. Additionally, Creative Planning reduced its position in the company by 7.8%, selling 2,561 shares during the quarter. However, the company announced a quarterly cash dividend of $0.43 per share and enhanced its programmatic share repurchase strategy, which could be viewed as a positive development.

1.c. Company Highlights

2. Meritage Homes' Q3 2025 Earnings: A Strong Backlog Conversion Rate and Healthy Balance Sheet

Meritage Homes reported a home closing revenue of $1.4 billion in Q3 2025, with an adjusted gross margin of 20.1% and diluted EPS of $1.39, missing estimates of $1.71. The company's orders increased by 4% year-over-year to 3,636 units, driven by its strategy focused on affordable, move-in-ready homes and a 60-day closing-ready guarantee, which resulted in a 211% backlog conversion rate. The average sales price (ASP) on orders was $389,000, down 4% from the prior year due to increased incentives and discounts.

Publication Date: Nov -03

📋 Highlights
  • Backlog Conversion Surge: 211% conversion rate driven by affordable, move-in-ready homes and a 60-day closing-ready guarantee
  • Community Expansion: 20% YoY increase to 334 communities, with 5.3-year lot supply (80,800 lots) and 14% lower land spend ($528M Q3)
  • Shareholder Returns: $85M returned in Q3 (vs. $57M YoY), including $55M buybacks (772K shares) and 15% dividend hike to $0.43/share
  • Financial Resilience: $729M cash on hand, 17.2% net debt-to-cap ratio, and $664M remaining in share repurchase authorization
  • Margin and EPS Guidance: Q4 gross margin target 19-20% (vs. 20.1% in Q3) and full-year 2025 adjusted diluted EPS of $5.35

Financial Performance

The company's year-to-date results show orders up 1%, closings down 3%, and home closing revenue decreased 8% to $4.4 billion, with adjusted diluted EPS of $5.35. Meritage Homes' balance sheet remains strong, with $729 million in cash, no debt drawn on its credit facility, and a net debt-to-cap ratio of 17.2%. The company's return on equity (ROE) stands at 10.37%, indicating a relatively healthy profitability level.

Operational Highlights

Meritage Homes ended the quarter with 334 communities, a 20% increase year-over-year, and owned or controlled a total of about 80,800 lots, equating to a 5.3-year supply of lots. The company expects to maintain its community count fairly steady in Q4 and anticipates double-digit year-over-year growth in 2026. According to Hilla Sferruzza, EVP and CFO, the current land basis is fully comprised of higher-cost land, but incremental green shoots related to land and development costs are encouraging.

Valuation and Outlook

With a P/E Ratio of 8.82 and a P/B Ratio of 0.9, Meritage Homes' valuation appears reasonable. The company's guidance for Q4 2025 expects diluted EPS in the range of $1.51 to $1.70, and an effective tax rate of about 24.5%. Analysts estimate next year's revenue growth at 6.2%. The company's long-term target margin of 22.5-23.5% seems achievable if consumer confidence improves and incentives moderate.

Share Repurchases and Dividend

The company returned $85 million of cash to shareholders in Q3 2025, compared to $57 million in Q3 2024, and bought back over 772,000 shares for $55 million. The Board approved an additional $500 million in authorized share repurchases, and $664 million remain available under the program. Meritage Homes also increased its quarterly cash dividend by 15% year-over-year to $0.43 per share in 2025, indicating a commitment to returning capital to shareholders.

3. NewsRoom

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The Way To 200K: Meritage Homes Celebrates 40th Anniversary

Dec -04

Source: globenewswire.com

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Fisher Asset Management LLC Has $44.96 Million Stake in Meritage Homes Corporation $MTH

Dec -03

Source: defenseworld.net

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17 dividend-stock bargains from a value manager with a stellar track record

Dec -02

Source: marketwatch.com

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Mithril Gives Exploration Update Including Channel Sample Results up to 4,520 g/t Silver, and 38.2 g/t Gold as Expansion of the District Continues at Copalquin, Mexico

Dec -01

Source: thenewswire.com

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Mithril Silver And Gold Ltd. Engages ICP Securities Inc. For Automated Market Making Services

Nov -28

Source: thenewswire.com

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Meritage Homes Corporation $MTH Shares Sold by Creative Planning

Nov -26

Source: defenseworld.net

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Creative Planning Sells 2,561 Shares of Meritage Homes Corporation $MTH

Nov -26

Source: defenseworld.net

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Meritage Homes Announces Quarterly Cash Dividend and Enhances Programmatic Share Repurchase Strategy

Nov -20

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.50%)

6. Segments

Home Closed - East

Expected Growth: None%

None

Home Closed - West

Expected Growth: None%

None

Home Closed - Central

Expected Growth: None%

None

Financial Services

Expected Growth: None%

None

7. Detailed Products

Single-Family Homes

Meritage Homes Corporation builds and sells single-family homes in various communities across the United States.

Entry-Level Homes

Meritage Homes offers entry-level homes designed for first-time homebuyers, featuring affordable prices and energy-efficient features.

Move-Up Homes

Meritage Homes' move-up homes cater to growing families and individuals seeking more space and upgraded features.

Luxury Homes

Meritage Homes' luxury homes feature high-end finishes, advanced smart home technology, and premium materials.

Active Adult Communities

Meritage Homes' active adult communities are designed for adults aged 55+, offering low-maintenance living and resort-style amenities.

8. Meritage Homes Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Meritage Homes Corporation is medium due to the availability of alternative housing options such as apartments and condominiums.

Bargaining Power Of Customers

The bargaining power of customers for Meritage Homes Corporation is low due to the lack of negotiating power of individual homebuyers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Meritage Homes Corporation is medium due to the presence of multiple suppliers of building materials and labor.

Threat Of New Entrants

The threat of new entrants for Meritage Homes Corporation is low due to the high barriers to entry in the homebuilding industry, including regulatory hurdles and capital requirements.

Intensity Of Rivalry

The intensity of rivalry for Meritage Homes Corporation is high due to the competitive nature of the homebuilding industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 19.49%
Debt Cost 3.95%
Equity Weight 80.51%
Equity Cost 12.69%
WACC 10.99%
Leverage 24.20%

11. Quality Control: Meritage Homes Corporation passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Toll Brothers

A-Score: 5.7/10

Value: 6.8

Growth: 8.1

Quality: 6.7

Yield: 2.0

Momentum: 4.0

Volatility: 6.3

1-Year Total Return ->

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Taylor Morrison

A-Score: 5.4/10

Value: 7.9

Growth: 5.7

Quality: 7.2

Yield: 0.0

Momentum: 5.0

Volatility: 6.7

1-Year Total Return ->

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M/I Homes

A-Score: 5.4/10

Value: 7.8

Growth: 8.2

Quality: 7.0

Yield: 0.0

Momentum: 3.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Meritage Homes

A-Score: 5.2/10

Value: 8.4

Growth: 5.3

Quality: 6.5

Yield: 3.0

Momentum: 2.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
KB Home

A-Score: 4.9/10

Value: 6.2

Growth: 7.1

Quality: 5.0

Yield: 3.0

Momentum: 2.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Century Communities

A-Score: 4.9/10

Value: 7.8

Growth: 7.6

Quality: 4.6

Yield: 3.0

Momentum: 1.5

Volatility: 5.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

72.86$

Current Price

72.86$

Potential

-0.00%

Expected Cash-Flows