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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 driven by a strong Q4 earnings beat, with quarterly earnings of $1.67 per share surpassing the Zacks Consensus Estimate of $1.55 per share. The company's robust balance sheet, with a net leverage ratio of 1.82 and 69% owned lot portfolio, provides resilience and long-term positioning as the housing cycle turns. Additionally, Principal Financial Group Inc. raised its holdings in shares of Meritage Homes Corporation by 13.1% during the undefined quarter, indicating increased investor confidence in the company.

1.c. Company Highlights

2. Meritage Homes' Q4 2025 Earnings: A Resilient Performance Amidst Challenging Market Conditions

Meritage Homes reported a home closing revenue of $1.4 billion for Q4 2025, down 12% year-over-year, driven by a 7% decrease in home closing volume and a 5% decline in average selling price (ASP). The company's home closing gross margin was 16.5%, while the adjusted gross margin was 19.3%. The adjusted diluted EPS was $1.67, beating analyst estimates of $1.55. The company's full-year 2025 home closing revenue decreased 9% to $5.8 billion, with an adjusted gross margin of 20.8% and adjusted diluted EPS of $7.05.

Publication Date: Feb -11

📋 Highlights

Operational Performance and Regional Trends

Meritage Homes delivered 3,755 homes in Q4 2025, with a strong absorption pace in favorable markets such as Dallas and Houston. However, the company faced lower demand and aggressive local competition in other markets. The company's regional trends were highly localized, with demand patterns varying across different markets. Phillippe Lord, CEO, emphasized the importance of capital allocation, highlighting the termination of certain land deals to redeploy capital towards share repurchases and acquiring new land.

Financial Position and Capital Allocation

Meritage Homes maintained a healthy balance sheet at December 31, 2025, with cash of $775 million and no debt drawn on its credit facility. The company's net debt-to-capital ratio was 16.9%. The company returned $179 million of capital to shareholders via buybacks and dividends in Q4 2025, with a total of $836 million repurchased since implementing its share buyback program in mid-2018. The quarterly dividend was increased by 15% year-over-year to $0.43 per share.

Outlook and Guidance

Meritage Homes is guiding to full-year 2026 closings in line with its 2025 performance, assuming no changes in market conditions. For Q1 2026, the company is projecting total home closings between 3,000 and 3,300 units, with home closing revenue of $1.13 billion to $1.24 billion. The company's guidance implies about 70 basis points of sequential pressure on an apples-to-apples basis in Q1. Analysts estimate next year's revenue growth at 8.9%.

Valuation and Metrics

Meritage Homes' current P/E Ratio is 12.0, with a P/S Ratio of 0.94 and an EV/EBITDA of 11.12. The company's ROE is 8.65%, and its ROIC is 34.74%. The Dividend Yield is 2.19%. These metrics indicate that the company is trading at a reasonable valuation, considering its financial performance and growth prospects.

3. NewsRoom

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Mithril Provides Exploration Update Over Multiple Targets, Copalquin Silver-Gold Project, Mexico

Feb -11

Source: thenewswire.com

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Meritage Homes Corporation: Demand Is Still The Problem

Feb -11

Source: seekingalpha.com

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Meritage Homes Corporation $MTH Shares Sold by New York State Common Retirement Fund

Feb -09

Source: defenseworld.net

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Principal Financial Group Inc. Increases Stock Position in Meritage Homes Corporation $MTH

Feb -07

Source: defenseworld.net

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Mithril Silver And Gold December 2025 Quarterly Report Continued Exploration Success

Jan -30

Source: thenewswire.com

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Meritage Homes Corporation (MTH) Q4 2025 Earnings Call Transcript

Jan -29

Source: seekingalpha.com

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Compared to Estimates, Meritage (MTH) Q4 Earnings: A Look at Key Metrics

Jan -29

Source: zacks.com

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Meritage Homes (MTH) Q4 Earnings Surpass Estimates

Jan -28

Source: zacks.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
M/I Homes

A-Score: 5.4/10

Value: 8.0

Growth: 8.2

Quality: 7.0

Yield: 0.0

Momentum: 3.5

Volatility: 6.0

1-Year Total Return ->

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Toll Brothers

A-Score: 5.4/10

Value: 6.9

Growth: 7.3

Quality: 6.6

Yield: 2.0

Momentum: 3.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Meritage Homes

A-Score: 5.4/10

Value: 8.6

Growth: 5.3

Quality: 6.5

Yield: 4.0

Momentum: 2.5

Volatility: 5.7

1-Year Total Return ->

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Taylor Morrison

A-Score: 5.1/10

Value: 8.0

Growth: 5.7

Quality: 6.4

Yield: 0.0

Momentum: 3.5

Volatility: 7.0

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Stock-Card
Century Communities

A-Score: 5.1/10

Value: 8.0

Growth: 7.6

Quality: 4.7

Yield: 3.0

Momentum: 2.0

Volatility: 5.3

1-Year Total Return ->

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KB Home

A-Score: 4.9/10

Value: 7.8

Growth: 4.6

Quality: 5.3

Yield: 3.0

Momentum: 2.5

Volatility: 6.0

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

80.6$

Current Price

80.6$

Potential

-0.00%

Expected Cash-Flows