- Meritage Homes reported total closing revenue of $1.62 billion for the second quarter, beating estimates and marking a 4.1% decline year-over-year.
- Home closing revenue also matched the total closing revenue at $1.62 billion, reflecting a 4.6% drop compared to the previous year.
- Earnings per share (EPS) stood at $2.04, a significant decrease from $6.31 year-over-year.
- The gross margin on home sales was 21.1%, down from 25.9% in the same quarter last year.
- A total of 4,170 homes were closed, which is a 1.3% increase year-over-year, surpassing the estimate of 3,963 homes.
- The company recorded orders worth $1.55 billion, a 1.7% decrease year-over-year, falling short of the estimated $1.64 billion.
- There were 3,914 orders placed, a rise of 3% from the previous year, but slightly below the estimate of 3,955.
- Average active communities increased by 7.1% year-over-year to 301, exceeding the estimate of 298.79.
- The backlog value was $695.5 million, experiencing a significant 37% decline year-over-year, against an estimate of $849.9 million.
- The backlog average sales price was $0.4 million, a 2.7% decrease year-over-year, aligning with the estimate.
- Orders average sales price also was $0.4 million, down by 4.6% year-over-year, consistent with the estimate.
- The average sales price of closings was $0.39 million, a 5.8% decline, just under the estimate of $0.4 million.
- Ending backlog consisted of 1,748 units, a 36% reduction year-over-year, below the estimated backlog of 1,997 units.
- CEO Phillippe Lord highlighted improved cycle times and spec strategy as the reason for achieving 4,170 home closings, with more than half from intra-quarter sales.
- Executive Chairman Steven J. Hilton credited navigating challenging conditions with elevated mortgage rates and weakened consumer confidence as part of their strategy.
- Excluding $4.2 million in terminated land deal charges, the home closing gross margin was 21.4% contributing to the EPS of $2.04.
- Analyst recommendations include 6 buys, 6 holds, and no sells.
Meritage Homes on Smartkarma
Independent analysts on Smartkarma have provided bullish coverage on Meritage Homes, with Baptista Research offering insights into the company’s recent performance and strategic moves. In their research report titled “Meritage Homes: Partnerships & Realtor Engagement to Enhance Market Reach & Sales Effectiveness!”, Meritage Homes showcased resilience in the first quarter of 2025 despite macroeconomic challenges. The company achieved significant milestones such as its second-highest first-quarter orders and closings in history, indicating strategic adaptability and a focus on a 60-day closing-ready inventory.
Furthermore, Baptista Research‘s analysis on Meritage Homes emphasized the company’s ability to navigate a volatile housing market environment in their report “Meritage Homes: Recent Market Expansion & Demand Dynamics Driving Our Optimism! – Major Drivers.” With home closings totaling 4,044 units and a home closing gross margin of 23.2% in the fourth quarter of 2024, Meritage Homes demonstrated resilience and adaptability amidst industry uncertainties, showcasing a positive outlook for the company’s future performance.
A look at Meritage Homes Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 4 | |
| Dividend | 3 | |
| Growth | 3 | |
| Resilience | 3 | |
| Momentum | 3 | |
| OVERALL SMART SCORE | 3.2 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Meritage Homes, a company known for designing, building, and selling a range of single-family homes across the southern and western regions of the United States, is positioned favorably for long-term growth. With a solid Value score of 4, the company is deemed to be financially attractive, indicating promising potential for investors looking for value opportunities.
Although the Dividend, Growth, Resilience, and Momentum scores hover around the 3 mark, suggesting moderate performance in these areas, the overall outlook remains positive. Meritage Homes‘ focus on providing homes across different market segments coupled with its operational presence in key regions bodes well for its future prospects in the real estate market.
Disclaimer: This article by Smartkarma is general in nature and 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. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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