Earnings Report and Estimates - Meritage Homes Corporation (MTH) is scheduled to report Q4 2024 results on Jan 29, after market close [1] - The Zacks Consensus Estimate for Q4 2024 EPS decreased to $2.25 from $2.27 in the past 30 days, indicating a 16.4% YoY decrease from $2.69 [3] - The consensus mark for revenues is pegged at $1.57 billion, indicating a 5.1% YoY decrease [3] Quarterly Performance and Factors - Total closing revenues decreased 2% YoY in the last reported quarter [2] - Q4 earnings and revenues are expected to decrease YoY due to affordability pressures and increased use of incentives [4] - The company expects home closings to be in the range of 3,750-3,950 units, down from 3,951 units a year ago [5] - Home closing revenues are anticipated to be in the $1.5-$1.59 billion range, down from $1.64 billion YoY [5] Segment-wise Performance - Homebuilding segment, which contributed 99.6% to total revenues in 2023, is predicted to drop 5.3% YoY to $1.57 billion [7] - Financial services revenues, which contributed 0.4% to total revenues in 2023, are expected to increase 8.8% YoY to $7.8 million [7] Margins and Incentives - Gross margins are forecasted to be in the range of 22.5% to 23.5%, down from Q3's 24.8% and the prior year's 25.2% [8] - Increased use of financing incentives, including rate buydowns, has weighed on the company's ASP [8] Backlogs and Home Orders - Home orders are expected to grow 24% to 3,587 units in Q4 2024 [9] - Total backlog is expected to decline 22% to 1,988 units, with the total backlog value decreasing 25% YoY to $816.2 million [9] Integration and Market Focus - Meritage Homes is integrating Elliott Homes, a private builder with a strong presence in the Gulf Coast markets [5] - The company's focus on the entry-level market, which remains structurally undersupplied, should continue to provide a steady stream of buyers [4] Earnings ESP and Zacks Rank - MTH has an Earnings ESP of -1.27% and a Zacks Rank 3, indicating no predicted earnings beat for the quarter [10] Other Companies in the Sector - Weyerhaeuser (WY) has an Earnings ESP of +1.01% and a Zacks Rank of 1, with expected Q4 2024 earnings to decrease 56.3% [11] - Sterling Infrastructure, Inc. (STRL) has an Earnings ESP of +2.99% and a Zacks Rank of 3, with expected Q4 2024 earnings to increase 3.1% [12] - PulteGroup, Inc. (PHM) has an Earnings ESP of +2.36% and a Zacks Rank of 3, with expected Q4 2024 earnings to decrease 2.1% [13]

Core Viewpoint - The market anticipates a year-over-year decline in earnings for Meritage Homes (MTH) due to lower revenues, with a focus on how actual results compare to estimates [1][2]. Earnings Expectations - Meritage is expected to report quarterly earnings of $2.45 per share, reflecting an 8.9% decrease year-over-year, and revenues are projected to be $1.57 billion, down 5.1% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 11.78% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +5.97%, indicating a likelihood of beating the consensus EPS estimate [10][11]. Historical Performance - Meritage has consistently beaten consensus EPS estimates, achieving this in the last four quarters, with a notable surprise of +5.53% in the most recent quarter [12][13]. Conclusion - Meritage is positioned as a strong candidate for an earnings beat, but investors should consider other influencing factors beyond earnings results [14][16].

Earnings Performance and Estimates - Meritage Homes has consistently beaten earnings estimates, with an average surprise of 13.77% over the last two quarters [1] - For the most recent quarter, Meritage reported earnings of $2.67 per share, beating the estimate of $2.53 per share by 5.53% [4] - In the previous quarter, the company reported $3.16 per share, surpassing the consensus estimate of $2.59 per share by 22.01% [4] Earnings ESP and Zacks Rank - Stocks with a positive Earnings ESP and a Zacks Rank 3 (Hold) or better have a 70% chance of producing a positive earnings surprise [2] - Meritage currently has an Earnings ESP of +81.61%, indicating analysts are bullish on its earnings prospects [8] - The combination of a positive Earnings ESP and a Zacks Rank 3 suggests another earnings beat is likely for Meritage [8] Analyst Estimates and Predictive Power - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the former being more accurate due to recent analyst revisions [5] - Recent estimates for Meritage have been moving higher, further supporting the likelihood of an earnings beat [7] - A negative Earnings ESP does not necessarily indicate an earnings miss but reduces the predictive power of the metric [3]

Core Insights - Meritage Homes Corporation, the fifth-largest public homebuilder in the U.S., has made significant contributions to community initiatives in 2024, totaling $3.3 million [1][4] - The company’s philanthropic efforts include donations to combat food insecurity, support education, assist military families, and improve affordable housing [1][4] Philanthropic Contributions - Meritage donated $1.5 million through its philanthropic foundation, Meritage Cares, focusing on various community support initiatives [1] - The company contributed nearly $1.8 million to K-12 education opportunities in Arizona, Florida, and Georgia [1] Specific Initiatives - **Education and Career Development**: Funded $425,000 for scholarships at Historically Black Colleges and Universities and Hispanic Serving Institutions, and supported organizations in real estate and homebuilding [4] - **Tree Planting Programs**: Donated $300,000 to the Arbor Day Foundation for tree planting and water conservation efforts [4] - **Food Insecurity**: Contributed over $190,000 to food banks and shelters, with employees packing 370,000 meal kits for hurricane victims [4] - **Military Families**: Built and donated two mortgage-free homes to military families, totaling 20 homes donated through the program [4] - **Affordable Housing**: Provided over $40,000 to the Arizona Housing Fund to support permanent housing for the homeless [4] Company Overview - Meritage Homes has delivered over 190,000 homes in its 38-year history and is recognized for its energy-efficient and affordable housing solutions [5][6] - The company operates across multiple states, including Arizona, California, Texas, and Florida, and is a leader in energy-efficient homebuilding [5][6]

Group 1 - The individual investor focuses on managing personal capital accumulated over the years, utilizing a diverse range of investment strategies including fundamental, technical, and momentum investing [1] - The investor aims to leverage the strengths of various investment approaches to refine their investment process [1] - The purpose of writing on Seeking Alpha is to track the performance of investment ideas and connect with like-minded investors [1]

Core Points - Meritage Homes Corporation, the fifth largest public homebuilder in the U.S., will release its fourth quarter 2024 results on January 29, 2025, after market close [1] - A conference call to discuss the results is scheduled for January 30, 2025, at 8:00 a.m. Mountain Standard Time [1] Company Overview - Meritage Homes is recognized as the fifth-largest public homebuilder in the U.S. based on homes closed in 2023, offering 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 38-year history, Meritage has delivered more than 190,000 homes and is known for its distinctive style, quality construction, and award-winning customer experience [4] - The company is a leader in energy-efficient homebuilding, having received multiple awards from the U.S. Environmental Protection Agency, including the ENERGY STAR® Partner of the Year for Sustained Excellence Award [4]

Core Viewpoint - Meritage Homes reported third-quarter 2024 results with earnings and total closing revenues exceeding estimates but showing a year-over-year decline, marking the seventh consecutive quarter of such performance [2][3]. Earnings & Revenue Discussion - Earnings per share (EPS) was $5.34, surpassing the Zacks Consensus Estimate by 5.7%, but down 11% from $5.98 in the same quarter last year [4]. - Total revenues reached $1.6 billion, a decrease of 1.4% from $1.62 billion year-over-year [4]. Segment Discussion - Total closing revenues were $1.588 billion, down 2% from the prior year but exceeding the consensus estimate of $1.57 billion by 0.7% [5]. - Home closing revenues under the Homebuilding segment were $1.586 billion, also down 2% year-over-year due to a lower average sales price (ASP) [5]. - The company closed 3,942 homes, an 8% increase from the previous year, while the ASP declined 9% to $402,000 [6]. Orders and Backlog - Total home orders increased by 1% year-over-year to 3,512 homes, but the dollar value of home orders decreased by 5% to $1.43 billion [7]. - The backlog at quarter-end totaled 2,284 units, down 37% year-over-year, with a backlog value decrease of 40% to $931.7 million [8]. Margins and Expenses - Adjusted home closing gross margin contracted by 190 basis points to 24.8%, influenced by increased lot costs and financing incentives [9]. - Selling, general and administrative expenses improved to 9.9% of home closing revenues, a 20 basis point improvement from the prior year [10]. Financial Services - Revenues from the Financial Services segment rose 32% year-over-year to $8.1 million [11]. Balance Sheet - Cash and cash equivalents at the end of Q3 totaled $831.6 million, down from $921.2 million at the end of 2023 [13]. - The company owned or controlled approximately 74,800 lots, an increase from about 60,700 lots a year ago [13]. Q4 2024 Guidance - Meritage Homes anticipates 3,750-3,950 closings for the year, generating revenues between $1.5 billion and $1.59 billion, down from $1.64 billion reported last year [15]. - Expected home closing gross margin is projected to be in the range of 22.5-23.5%, with EPS anticipated between $4.10 and $4.60 [16]. Industry Performance - Meritage is part of the Zacks Building Products - Home Builders industry, where PulteGroup reported revenues of $4.48 billion, reflecting an 11.8% year-over-year increase [20].

Core Points - Meritage Homes Corporation has declared a two-for-one stock split in the form of a stock dividend, effective for stockholders of record on December 31, 2024, with trading on a split-adjusted basis starting January 3, 2025 [1] Company Overview - Meritage Homes is the fifth-largest public homebuilder in the U.S., based on homes closed in 2023, offering energy-efficient and affordable entry-level and first move-up homes across multiple states [2] - The company has delivered over 190,000 homes in its 38-year history, known for distinctive style, quality construction, and award-winning customer experience [3]

Core Points - Meritage Homes Corporation declared a quarterly dividend of $0.75 per share, payable on December 31, 2024, to shareholders of record as of December 17, 2024 [1] - The Board of Directors approved a $250 million increase to the Company's share repurchase authorization, bringing the total authorized share repurchase program to $334 million as of November 21, 2024 [2] - Meritage is the fifth-largest public homebuilder in the U.S., offering energy-efficient and affordable homes across multiple states [3] - The Company has delivered over 190,000 homes in its 38-year history and is recognized for its quality construction and customer experience [4]

Home Closing Performance - Home closing units volume increased by 8.4% to 3,942 homes in Q3 2024 compared to 3,638 homes in Q3 2023[108] - Home closing revenue decreased by 1.5% to $1.6 billion in Q3 2024, primarily due to a 9.1% decrease in average sales price (ASP) to $402.3 thousand[108] - Home closing gross margin for Q3 2024 was 24.8%, a decrease of 190 basis points from 26.7% in Q3 2023, resulting in a gross profit of $392.6 million[108] - Home orders for Q3 2024 were 3,512, slightly up from 3,474 in the prior year, with a home order value of $1.4 billion, down 4.7% year-over-year[110] - Total home orders for the three months ended September 30, 2024, were $1.4 billion, a decrease of 4.7% from $1.5 billion in the same period of 2023[130] - Home order volume for the nine months ended September 30, 2024, was 11,302, an increase of 9.7% from 10,301 in the prior year[131] Backlog and Cancellation Rates - The cancellation rate improved to 10% in Q3 2024 from 11% in Q3 2023[112] - The company ended Q3 2024 with a backlog of 2,284 homes valued at $0.9 billion, a decrease of 36.7% from the previous year[113] - The backlog at September 30, 2024, was valued at $931.7 million, down 40.2% from $1.6 billion at the same time in 2023[126] - Homes in backlog decreased by 36.7% to 2,284 units at September 30, 2024, compared to 3,608 units in 2023[126] - The year-to-date cancellation rate improved to 10% from 14% in the prior year period[133] - The East Region's cancellation rate dropped to 8% from 11% in the prior year[138] Financial Performance - Net income for the nine months ended September 30, 2024, was $613.5 million, up from $539.9 million in the same period of 2023, reflecting a 13.7% increase[109] - For the nine months ended September 30, 2024, home closing revenue reached $1.7 billion, a 12.3% increase driven by an 18.4% rise in home closing volume[133] - Financial services profit for Q3 2024 was $3.1 million, a decrease of $2.6 million from $5.7 million in the same prior year period[146] - The Central Region closed 1,174 homes in Q3 2024, a 6.5% increase, but home closing revenue decreased by 7.9% to $416.8 million due to a 13.6% drop in ASP[136] - The East Region saw a 16.6% increase in home closing volume and an 11.2% increase in revenue, closing 4,462 homes for $1.7 billion in revenue for the nine months ended September 30, 2024[138] Sales and Marketing Expenses - Commissions and other sales costs decreased by $1.2 million to $97.9 million for the three months ended September 30, 2024, representing 6.2% of home closing revenue[147] - General and administrative expenses for the three months ended September 30, 2024, were $59.2 million, a decrease of $3.9 million from the prior year, improving to 3.7% of home closing revenue[148] Tax and Debt Management - The effective income tax rate for Q3 2024 was 21.6%, benefiting from energy tax credits under the Inflation Reduction Act[108] - The effective tax rate was 21.6% for the three months ended September 30, 2024, compared to 22.4% for the same period in 2023[153] - The company maintains a debt-to-capital ratio of 20.7% and a net debt-to-capital ratio of 8.8% as of Q3 2024[115] - The debt-to-capital ratio increased to 20.7% as of September 30, 2024, compared to 17.9% at the end of 2023[165] - Net debt increased to $482.7 million as of September 30, 2024, from $86.99 million at the end of 2023[165] Cash Flow and Capital Management - Net cash used in operating activities totaled $128.0 million for the nine months ended September 30, 2024, compared to net cash provided of $460.1 million for the same period in 2023[161] - Net cash provided by financing activities was $69.8 million for the nine months ended September 30, 2024, compared to net cash used of $238.2 million in the prior year[163] - Total capital increased to $6.34 billion as of September 30, 2024, from $5.62 billion at the end of 2023[165] - The company has a minimum tangible net worth requirement of $3.3 billion, with an actual net worth of $4.98 billion as of September 30, 2024[169] Regional Performance - The West Region generated $594.5 million in home closing revenue for Q3 2024, a decrease of 2.0% from $606.8 million in Q3 2023[132] - The average sales price in the West Region decreased by 5.9% year-over-year due to a shift towards more entry-level homes[132] - The West Region ended Q3 2024 with 598 homes in backlog valued at $286.3 million, down from 1,179 units valued at $579.8 million at September 30, 2023[133] Other Financial Metrics - Other income, net, was $10.7 million for the three months ended September 30, 2024, down from $13.3 million in the prior year period[150] - Seasonal variations in quarterly operating results are expected, with higher orders typically in the first half of the fiscal year[170] - The company is in compliance with all Credit Facility covenants as of September 30, 2024[168] - The company has $1.3 billion in fixed rate debt, primarily consisting of senior and convertible senior notes, which do not expose it to interest rate risk[172] - The Credit Facility is subject to interest rate changes based on SOFR or Prime rates[172] - Recent accounting pronouncements are discussed in the unaudited consolidated financial statements[171]