Core Insights - Meritage Homes reported $1.42 billion in revenue for Q3 2025, a year-over-year decline of 10.9% and below the Zacks Consensus Estimate of $1.52 billion, resulting in a surprise of -6.85% [1] - The company's EPS for the quarter was $1.39, down from $2.67 a year ago, with an EPS surprise of -18.71% compared to the consensus estimate of $1.71 [1] Financial Performance Metrics - Total homes ordered were 3,636, slightly below the nine-analyst average estimate of 3,716 [4] - Average sales price for home closing revenue was $380.00, compared to the nine-analyst average estimate of $390.27 [4] - Order backlog totaled 1,699, exceeding the average estimate of 1,677 based on nine analysts [4] - Homes closed totaled 3,685, below the average estimate of 3,787 from nine analysts [4] - Order backlog average sales price was $394.00, lower than the $407.27 average estimate based on seven analysts [4] - Order backlog value was $670.01 million, compared to the estimated $724.95 million from six analysts [4] - Active communities at the end of the quarter totaled 334, above the average estimate of 316 from six analysts [4] - Average sales price for home orders was $389.00, compared to the five-analyst average estimate of $395.70 [4] - Total closing revenue from homebuilding was $1.42 billion, below the average estimate of $1.52 billion from ten analysts, representing a year-over-year change of -10.9% [4] - Home closing revenue was $1.4 billion, compared to the ten-analyst average estimate of $1.51 billion, reflecting a year-over-year change of -11.8% [4] - Land closing revenue was $16.07 million, significantly above the nine-analyst average estimate of $5.6 million, showing a year-over-year increase of +502.9% [4] - Financial services revenue was $8.46 million, slightly above the nine-analyst average estimate of $8.4 million, with a year-over-year change of +4.8% [4] Stock Performance - Meritage shares returned -1.8% over the past month, while the Zacks S&P 500 composite increased by +3.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Meritage Homes reported quarterly earnings of $1.39 per share, missing the Zacks Consensus Estimate of $1.71 per share, and showing a significant decline from $2.67 per share a year ago, indicating an earnings surprise of -18.71% [1][2] Financial Performance - The company posted revenues of $1.42 billion for the quarter ended September 2025, which was 6.85% below the Zacks Consensus Estimate and down from $1.59 billion in the same quarter last year [2] - Over the last four quarters, Meritage has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Meritage shares have declined approximately 7.2% since the beginning of the year, contrasting with the S&P 500's gain of 16.9% [3] - The current Zacks Rank for Meritage is 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.80 on revenues of $1.6 billion, and for the current fiscal year, it is $7.26 on revenues of $6.1 billion [7] - The trend of earnings estimate revisions for Meritage was mixed ahead of the earnings release, which could change following the recent report [6] Industry Context - The Building Products - Home Builders industry, to which Meritage belongs, is currently ranked in the bottom 24% of over 250 Zacks industries, indicating potential challenges ahead [8] - Beazer Homes, another company in the same industry, is expected to report a significant decline in earnings, with a projected EPS of $0.80, reflecting a year-over-year change of -52.7% [9]

Financial Performance - Homes closed in Q3 2025 totaled 3,685 units, a 7% decrease from 3,942 units in Q3 2024[4] - Home closing revenue for Q3 2025 was $1.4 billion, down 12% from $1.6 billion in Q3 2024[4] - Average sales price for closings in Q3 2025 was $380,000, a 5% decrease from $402,000 in Q3 2024[4] - Net earnings for Q3 2025 were $99 million ($1.39 per diluted share), a 49% decrease from $196 million ($2.67 per diluted share) in Q3 2024[4] - Home closing gross margin for Q3 2025 was 19.1%, a decrease of 570 basis points from 24.8% in Q3 2024[4] - Total closing revenue for the nine months ended September 30, 2025, was $4,396,914, down 7% from $4,750,588 in 2024[19] - Net earnings for the three months ended September 30, 2025, were $99,297, a decline of 49% compared to $195,966 in 2024[17] - Earnings per common share for the three months ended September 30, 2025, were $1.40, down 48% from $2.70 in 2024[18] - Adjusted net earnings for the nine months ended September 30, 2025, were $384,223, a decrease from $616,413 in the same period of 2024, with diluted earnings per share dropping to $5.13 from $8.36[37] Orders and Backlog - Home orders increased by 4% year-over-year to 3,636 units in Q3 2025, with a home order value of $1.4 billion[4] - Ending backlog units decreased by 26% year-over-year to 1,699 units, with a backlog value of $670 million, down 28%[4] - Homes ordered in Q3 2025 totaled 3,636 with a value of $1,415,089, compared to 3,512 homes ordered valued at $1,425,610 in Q3 2024, indicating a slight increase of 3.5% in homes ordered but a decrease of 0.7% in total value[28] - The order backlog as of September 30, 2025, was 1,699 homes valued at $670,007, down from 2,284 homes valued at $931,656 as of September 30, 2024, reflecting a decrease of 25.6% in homes and 28.1% in value[30] Shareholder Returns - The company returned $85 million to shareholders through dividends and share repurchases in Q3 2025, totaling nearly $237 million year-to-date[7] Cash and Assets - Cash and cash equivalents at September 30, 2025, totaled $729 million, reflecting an increase from $652 million at December 31, 2024[12] - Total assets as of September 30, 2025, were $7,758,510, an increase from $7,162,654 as of December 31, 2024[23] - Cash and cash equivalents rose to $728,937 as of September 30, 2025, compared to $651,555 at the end of 2024[23] Operational Metrics - The company reported a total cost of closings of $1,148,254 for the three months ended September 30, 2025, a decrease of 4% from $1,195,204 in 2024[17] - The company experienced a significant increase in land closing revenue, which rose by 503% to $16,068 for the three months ended September 30, 2025, from $2,665 in 2024[17] - The total number of active communities as of September 30, 2025, was 334, an increase from 278 in the same period of 2024, showing a growth in operational capacity[30] Debt and Financing - The debt-to-capital ratio increased to 25.7% as of September 30, 2025, compared to 20.6% at the end of 2024, indicating a rise in leverage[37] - Capitalized interest at the end of Q3 2025 was $71,201, up from $53,731 at the end of Q3 2024, indicating increased financing costs associated with homebuilding[32] Tax and Effective Rate - The company reported an effective income tax rate of 22.6% for Q3 2025, slightly higher than the 21.6% reported in Q3 2024[37] Company Overview - Meritage Homes Corporation is the fifth-largest public homebuilder in the U.S., focusing on energy-efficient and affordable homes across multiple states[39]

Core Insights - Meritage Homes Corporation reported a challenging third quarter for 2025, with significant declines in home closing revenue and net earnings compared to the previous year [4][6][10]. Financial Performance - Homes closed in Q3 2025 totaled 3,685 units, a decrease of 7% from 3,942 units in Q3 2024 [2]. - Home closing revenue for Q3 2025 was $1.4 billion, down 12% from $1.6 billion in Q3 2024 [2][6]. - The average sales price for homes closed in Q3 2025 was $380,000, a 5% decrease from $402,000 in Q3 2024 [2][6]. - Net earnings for Q3 2025 were $99 million ($1.39 per diluted share), a 49% decrease from $196 million ($2.67 per diluted share) in Q3 2024 [2][8]. - For the first nine months of 2025, net earnings were $369 million ($5.13 per diluted share), down 40% from $614 million ($8.36 per diluted share) in the same period of 2024 [2][8]. Operational Highlights - The company ended Q3 2025 with a backlog of 1,699 homes, a decrease of 26% from 2,284 homes at the end of Q3 2024 [2][6]. - The average sales price of homes in backlog was $394,000, down 3% from $408,000 in Q3 2024 [2][6]. - The company achieved a backlog conversion rate of 211%, with nearly 60% of Q3 closings coming from intra-quarter sales [5]. Strategic Initiatives - Meritage Homes increased its community count to 334, a 20% year-over-year increase, indicating a focus on expanding its market presence [4][10]. - The company returned $85 million to shareholders through cash dividends and share repurchases in Q3 2025, totaling nearly $237 million for the first nine months of the year [5][11]. - Land acquisition and development spending was reduced to $528 million in Q3 2025, down from $617 million in Q3 2024, reflecting a strategic response to market conditions [11]. Guidance and Outlook - For Q4 2025, the company expects home closing volume between 3,800 and 4,000 units, with revenue projected at $1.46 to $1.54 billion [10]. - The anticipated home closing gross margin for Q4 2025 is between 19% and 20% [10].

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Group 1 - Meritage Homes Corp (NYSE:MTH) is identified as a top pick in the homebuilder sector by UBS analyst John Lovallo, who anticipates a positive outlook for the industry in 2026 due to decreasing interest rates [1] - The current market requires rate stabilization, as builders are offering significant incentives that lower average selling prices (ASP) to stimulate demand; a stable rate environment could enhance consumer confidence [2] - ClearBridge Small Cap Strategy has established a significant new position in Meritage Homes, citing a systematic housing shortage in the U.S. and the potential benefits from declining interest rates for homebuilders [3]

Core Insights - Crude Value Insights provides an investment service and community focused on the oil and natural gas sector, emphasizing cash flow and the companies that generate it, which leads to value and growth prospects with real potential [1] Group 1 - The service includes access to a 50+ stock model account, in-depth cash flow analyses of exploration and production (E&P) firms, and live chat discussions about the sector [1] - Subscribers are offered a two-week free trial to explore the services related to oil and gas investments [2]

Core Insights - The housing sector is facing significant challenges, with new housing starts declining to an annual pace of 1.3 million, which is below economists' expectations [2][3] - The median U.S. home price is projected to reach $416,900 by 2025, while the median household income is around $83,150, resulting in a price-to-income multiple of 5X, indicating severe affordability issues [4][7] - A housing shortage has reached an all-time high of 4.7 million units, exacerbating the crisis as younger buyers are priced out and older homeowners are not selling [8] Government Response - The White House is considering measures to address the high cost of housing, with potential actions including declaring a national housing emergency, providing tariff relief, and offering incentives for first-time buyers [9][10] - These combined measures could significantly boost both supply and demand in the housing market within a year, potentially leading to a housing boom [11] Investment Opportunities - Key homebuilders identified for investment include Lennar, PulteGroup, DR Horton, KB Home, NVR, Toll Brothers, Meritage Homes, and Green Brick Partners, referred to as "blue chips" of the housing construction industry [12] - Housing technology companies like Zillow are also highlighted as potential investment opportunities, especially if more buyers enter the market [12] Interest Rate Outlook - The Federal Reserve is expected to cut interest rates four to five times over the next year, which could lower mortgage rates significantly from the current range of 6-7% [15][17] - Lower mortgage rates could improve affordability for buyers but may also lead to increased demand and higher prices in a tight market [19] Additional Investment Considerations - Companies like Opendoor, Compass, and Rocket Mortgage are positioned to benefit from a potential housing boom and falling mortgage rates, with Rocket Mortgage expected to dominate the refinancing space [21]

Core Insights - Meritage Homes Corporation, the fifth largest public homebuilder in the U.S., will release its third quarter 2025 results on October 28, 2025, after market close [1] - A conference call to discuss the results is scheduled for October 29, 2025, at 8:00 a.m. Pacific Standard Time [1] Company Overview - Meritage Homes is recognized as the fifth-largest public homebuilder in the U.S. based on homes closed in 2024, focusing on energy-efficient and affordable entry-level and first move-up homes [3] - The company's operations cover multiple states including Arizona, California, Colorado, Utah, Texas, Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, and Tennessee [3] - Over its 40-year history, Meritage has delivered more than 200,000 homes and is known for its distinctive style, quality construction, and award-winning customer experience [4] - The company has received numerous accolades for its commitment to energy-efficient homebuilding, including being an eleven-time recipient of the EPA's ENERGY STAR® Partner of the Year for Sustained Excellence Award [4]

Group 1 - Meritage Homes and Operation Homefront are providing two mortgage-free homes to military veterans and their families, with handover ceremonies scheduled for November in honor of Veterans Day [1][2] - Specialist Timothy Hunter and his family will receive a 2,300+ square-foot home in Angier, NC, while Aviation Apprentice David Green III and his family will receive a 2,000 square-foot home in Colorado Springs, CO [2][3] - The homes are part of Operation Homefront's Permanent Homes for Veterans program, which supports veterans in achieving homeownership and financial success [4] Group 2 - Meritage Homes is the fifth-largest public homebuilder in the U.S., focusing on energy-efficient and affordable homes across multiple states [6] - The company has delivered over 200,000 homes in its 40-year history and is recognized for its quality construction and customer experience [7] - Operation Homefront is a nonprofit organization dedicated to supporting military and veteran families, with 83% of its expenditures going directly to programs that assist these families [9]