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what it is
Meritage builds and sells single-family homes across the West, Texas, and the Southeast.
how it gets paid
Last year Meritage Homes made $5.9B in revenue. East was the main engine at 36% of sales, or 36% of sales.
what just happened
The quarter was weak: EPS came in at $1.20 versus a $2.13 estimate, while revenue fell 12% to $1.436 billion.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
60/100 earnings predictability — reasonably predictable
11.4x trailing p/e — the market's not buying it — or you found a deal
3.0% dividend yield — cash in your pocket every quarter
11.0% return on capital — nothing to write home about
xvary composite: 53/100 — below average
What they do
Meritage builds and sells single-family homes across the West, Texas, and the Southeast.
This is a scale business, not a magic business. Meritage sold homes in 336 communities across 9 states in 2025, which means you are buying land reach, local permits, and operating muscle. Base prices ran from $161,000 to $1,000,000, so the company can serve entry-level buyers and higher-end buyers without betting on one narrow lane.
How they make money
$5.9B
annual revenue
West
32% of sales
Central
32% of sales
East
36% of sales
The products that matter
builds single-family homes
Homebuilding
$5.9B · 100% of revenue
it is the entire business. That produced $5.9B in annual revenue with a 10.2% net margin, which means execution matters more than storytelling here.
10.2% net margin
Key numbers
11.4x
trailing p/e
P/E → how many dollars you pay for one dollar of profit → so what: you are paying a low multiple because the market does not trust current earnings.
14.5%
operating margin
Operating margin → profit after running the business, before interest and taxes → so what: Meritage still converts sales into decent profit for a builder.
$1.8B
long-term debt
Long-term debt → money owed over many years → so what: debt is fine in an upcycle and less funny in a housing slowdown.
3.0%
dividend yield
Dividend yield → cash paid to shareholders each year as a percent of the stock price → so what: you get paid to wait, but only if earnings hold up.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 45 / 100
- long-term debt $1.8B (26% of capital)
- net profit margin 10.2% — keeps 10 cents of every dollar in revenue
- return on equity 12% — $0.12 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in MTH 3 years ago → it's now worth $14,250.
The index would have given you $14,540.
source: institutional data · total return
What just happened
missed estimates
The quarter was weak: EPS came in at $1.20 versus a $2.13 estimate, while revenue fell 12% to $1.436 billion.
Fewer homes closed and average home sale prices fell 5%, according to. Yahoo Finance says the quarter missed estimates by 43.66%, which is the kind of number that tells you demand did not just cool, it stalled.
$1.4B
revenue
$1.20
eps
n/a
n/a
the number that mattered
The 12% revenue drop mattered most because it came with a 5% price decline, which means Meritage got hit by weaker demand and lower pricing together.
-
meritage homes concluded 2025 on a soft note.
-
december-period revenues slipped 12% vs. prior year, to $1.436 billion, while earnings of $1.20 per share contracted versus the previous-year tally.
-
fewer homes closed and a 5% decline in average home sale prices during the final stanza resulted in the relatively weaker showing.net new orders held up decently, however, suggesting that homebuying demand may well remain resilient.
-
thus, we are leaving unchanged our current-year top-line estimate, at $6.475 billion.that said, we are scaling back our full-year 2026 bottom-line call by $0.60, to $9.15 per share, reflecting lingering housing market headwinds in the near term, including elevated operating margin pressures.
-
a decent amount of capital is set to be returned to shareholders.
source: company earnings report, 2026
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What could go wrong
the #1 risk is a housing slowdown in Meritage's western and southern markets.
med
housing demand cools
MTH is a one-business company with $5.9B in annual revenue. If affordability weakens and buyers step back, there is no second segment to cushion the hit.
MTH is a one-business company with $5.9B in annual revenue. If affordability weakens and buyers step back, there is no second segment to cushion the hit.
med
margin compression
The bull case needs the 14.5% operating margin and 10.2% net margin to stay respectable. Incentives, discounts, or higher build costs would pressure both quickly.
The bull case needs the 14.5% operating margin and 10.2% net margin to stay respectable. Incentives, discounts, or higher build costs would pressure both quickly.
med
balance-sheet flexibility is good, not great
$1.8B of long-term debt and debt equal to 26% of capital is manageable. In a tougher cycle, manageable can become restrictive faster than value investors expect.
$1.8B of long-term debt and debt equal to 26% of capital is manageable. In a tougher cycle, manageable can become restrictive faster than value investors expect.
med
the stock can stay cheap
An 11.4x P/E looks inexpensive, but the last three years still lagged the index by $290 on a $10,000 starting investment. Cheap is not a catalyst by itself.
An 11.4x P/E looks inexpensive, but the last three years still lagged the index by $290 on a $10,000 starting investment. Cheap is not a catalyst by itself.
The stock looks cheap at 11.4x earnings, but cheap cyclical stocks stay cheap when orders, prices, and closings all soften together.
source: institutional data · regulatory filings · risk analysis
Pay attention to
margin
whether 10.2% net margin starts slipping
That margin is one of the few hard numbers supporting the low multiple. If it fades, 11.4x earnings stops looking obviously cheap.
balance sheet
debt staying under control
$1.8B in long-term debt and 26% debt-to-capital is fine for now. In a cyclical business, "for now" does a lot of work.
earnings
next update on demand and incentives
The page does not have fresh quarterly detail, so the next earnings release matters more than usual. You want clarity on orders, pricing, and margin direction.
relative performance
whether MTH can finally beat the index again
Three-year total return still trails by $290. If the stock stays cheap and still cannot outperform, the market is telling you something.
Analyst rankings
earnings predictability
60 / 100
predictability is middling. in human-speak, analysts think the business is readable enough, but not smooth enough to stop surprises.
risk rank
3
Risk rank 3 means roughly middle-of-the-pack risk. Safer than many cyclical names, not something you hide in during a downturn.
price stability
45 / 100
Price stability under 50 means the stock has some bounce. You should expect more movement than a defensive blue-chip.
balance sheet grade
B++
That grade says the balance sheet is credible. It does not say the cycle cannot hurt you.
source: institutional data
Institutional activity
127 buyers vs. 164 sellers in 4q2025. total institutional holdings: 67.9M shares.
source: institutional data
Price targets
3-5 year target range
$54
$108
$73
current price
$81
target midpoint · +11% from current · 3-5yr high: $140 (+90% · 19% ann'l return)
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