Momentum investors typically don't time the market or "buy low and sell high." In other words, they avoid betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time. Who doesn't like betting on fast-moving trending stocks? But determining the right entry point isn't easy. Often, these stocks lose momentum once their valuation moves ahead of their future growth potential. In such a situation, inves ...

Momentum investors typically don't time the market or "buy low and sell high." In other words, they avoid betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time. Who doesn't like betting on fast-moving trending stocks? But determining the right entry point isn't easy. Often, these stocks lose momentum once their valuation moves ahead of their future growth potential. In such a situation, inves ...

Core Viewpoint - Taylor Morrison Home Corporation has shown significant stock performance despite mediocre financial results, indicating potential undervaluation and future growth opportunities [1][17]. Financial Performance - Revenue for the second quarter of 2024 was $1.99 billion, a decrease of 3.4% from $2.06 billion in the same quarter last year [2]. - Net income fell from $234.6 million in Q2 2023 to $199.5 million in Q2 2024, driven by both sales declines and price changes impacting margins [4]. - Operating cash flow turned negative at -$233.4 million, down from $259.7 million year-over-year [4]. Home Closings and Pricing - Total home closings in Q2 2024 were 3,200, up from 3,125 in Q2 2023, but the average closing price dropped from $639,000 to $600,000 due to high interest rates [3]. - For the first half of 2024, home closings increased from 5,666 to 5,931, yet the average price of homes closed decreased from $637,000 to $600,000 [5]. Backlog and Orders - The backlog increased to 6,256 homes from 6,156 homes year-over-year, with the average price in backlog rising from $664,000 to $671,000 [6]. - Net new orders for the most recent quarter were 3,111 homes, up from 3,023 homes the previous year, with a year-to-date total of 6,797 homes ordered compared to 5,877 last year [8]. Cancellation Rates - The cancellation rate improved to 9.4% in the most recent quarter, down from 11.2% a year earlier, indicating a positive trend in buyer commitment [10]. Future Outlook - Management expects between 12,600 and 12,800 home closings for 2024, with average prices projected between $600,000 and $610,000, suggesting stable pricing in the near term [12]. - Anticipated interest rate cuts by the Federal Reserve could enhance housing demand, as the country faces a housing shortage estimated at 4.5 million units [16]. Valuation Metrics - Taylor Morrison Home Corporation is currently valued attractively compared to peers, with a price-to-earnings ratio of 10.0, the lowest among comparable companies [15][16].

Core Viewpoint - The article emphasizes the importance of value investing and highlights Taylor Morrison Home (TMHC) as a strong value stock based on various financial metrics [2][3][7] Valuation Metrics - TMHC has a P/B ratio of 1.13, which is lower than the industry average of 1.64, indicating a solid valuation compared to peers [4] - The P/S ratio for TMHC stands at 0.85, compared to the industry's average of 0.98, suggesting that the stock is undervalued based on sales [5] - TMHC's P/CF ratio is 8.27, which is attractive relative to the industry average of 9.91, further supporting the notion of undervaluation [6] Investment Outlook - TMHC holds a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential for value investors [3][7] - The combination of favorable valuation metrics and a positive earnings outlook positions TMHC as an impressive value stock at the moment [7]

Core Insights - Taylor Morrison published its sixth annual Sustainability and Belonging Report, emphasizing its commitment to corporate responsibility through sustainable practices, inclusivity, and operational transparency [1][2] - The report reflects the company's dedication to sustainability and community building, aligning with various sustainability standards and receiving national accolades for its efforts [3] Sustainability Initiatives - The report includes a comprehensive assessment of Taylor Morrison's carbon footprint, showing a 10% improvement in the average Home Energy Rating System (HERS®) score since 2020, with an average score of 57 compared to 100 for homes built to 2006 standards [5] - The company has partnered with the National Wildlife Federation (NWF) to protect biodiversity, having installed 100 certified monarch butterfly gardens and protected nearly 9,000 acres of Certified Wildlife Habitat® since 2019 [5] Inclusivity and Diversity - Taylor Morrison has enhanced accessibility for a diverse customer base through new language services, pricing transparency, and inclusive design principles in home plans [5] - The company promotes gender diversity, achieving an equal male-to-female ratio on its board of directors and a workforce comprised of 44% women, significantly higher than the construction industry average of 11% [5] Community Engagement - The company connects homeowners to nature through the construction of Nature Play Spaces™, utilizing natural materials instead of traditional playground equipment, in partnership with the NWF [8]

Below, we take a look at Taylor Morrison Home (TMHC) , which currently has a Momentum Style Score of B. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions. Set to Beat the Market? A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It is also useful to compare a security to its industry, as this can help investor ...

Taylor Morrison Home (TMHC) is one of the several great candidates that made it through the screen. While there are numerous reasons why this stock is a great choice, here are the most vital ones: Most importantly, despite possessing fast-paced momentum features, TMHC is trading at a reasonable valuation. In terms of Price-to-Sales ratio, which is considered as one of the best valuation metrics, the stock looks quite cheap now. TMHC is currently trading at 0.94 times its sales. In other words, investors nee ...

Part I FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) The financial statements detail the company's financial position and performance, showing changes in assets, liabilities, revenue, net income, and cash flows [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, highlighting changes in assets, liabilities, and equity, including real estate inventory and cash Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $246,845 | $798,568 | | Total real estate inventory | $6,286,476 | $5,545,446 | | **Total assets** | **$9,099,069** | **$8,672,087** | | **Liabilities** | | | | Senior notes, net | $1,469,574 | $1,468,695 | | **Total liabilities** | **$3,572,527** | **$3,339,801** | | **Total stockholders' equity** | **$5,526,542** | **$5,332,286** | - Total assets increased by approximately **\$427 million** from December 31, 2023, to June 30, 2024, primarily driven by a **\$741 million** increase in total real estate inventory[10](index=10&type=chunk) - Cash and cash equivalents decreased significantly to **\$246.8 million** from **\$798.6 million** at the end of 2023, reflecting investments in inventory and share repurchases[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenue, gross margin, income before taxes, net income, and diluted EPS for the reported periods Key Performance Indicators (Q2 2024 vs Q2 2023, in thousands, except per share data) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | \$1,991,053 | \$2,060,564 | -3.4% | | Gross Margin | \$472,288 | \$499,685 | -5.5% | | Income Before Income Taxes | \$267,217 | \$315,759 | -15.4% | | Net Income | \$199,460 | \$234,602 | -15.0% | | Diluted EPS | \$1.86 | \$2.12 | -12.3% | Key Performance Indicators (Six Months Ended June 30, 2024 vs 2023, in thousands, except per share data) | Metric | YTD 2024 | YTD 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | \$3,690,805 | \$3,722,421 | -0.8% | | Gross Margin | \$889,133 | \$899,251 | -1.1% | | Income Before Income Taxes | \$516,097 | \$564,178 | -8.5% | | Net Income | \$389,730 | \$425,653 | -8.4% | | Diluted EPS | \$3.61 | \$3.85 | -6.2% | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%20Equity) This section outlines changes in stockholders' equity, including net income and the impact of common stock repurchases - For the six months ended June 30, 2024, the company repurchased **3,195,288 shares** of common stock for **\$198.5 million**[16](index=16&type=chunk) - Total stockholders' equity increased from **\$5.33 billion** at December 31, 2023, to **\$5.53 billion** at June 30, 2024, driven by net income of **\$391.1 million**, partially offset by share repurchases[10](index=10&type=chunk)[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes cash flows from operating, investing, and financing activities, highlighting the shift in operating cash flow Summary of Cash Flows (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash (used in)/provided by operating activities | \$(364,059) | \$607,111 | | Net cash used in investing activities | \$(57,308) | \$(44,829) | | Net cash used in financing activities | \$(136,959) | \$(60,888) | | **Net Decrease/Increase in Cash** | **\$(558,326)** | **\$501,394** | - The significant shift in operating cash flow from a **\$607.1 million** inflow in 2023 to a **\$364.1 million** outflow in 2024 was primarily due to a **\$688.4 million** investment in real estate inventory and land deposits[20](index=20&type=chunk) - Financing activities used **\$137.0 million** in cash, largely driven by **\$196.4 million** in common stock repurchases[20](index=20&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the financial statements, covering business operations, inventory adjustments, share repurchase programs, and litigation - The company operates a residential homebuilding and land development business across Arizona, California, Colorado, Florida, Georgia, Nevada, North and South Carolina, Oregon, Texas, and Washington. It expanded into Indianapolis in Q2 2024 by acquiring Pyatt Builders[22](index=22&type=chunk) - In Q2 2024, the company recorded a **\$2.3 million** inventory impairment in its East segment and a **\$6.8 million** fair value adjustment for land held for sale in its West segment[30](index=30&type=chunk)[32](index=32&type=chunk) - The company renewed its stock repurchase program, authorizing up to **\$500 million** through December 31, 2025. During the first six months of 2024, it entered into two Accelerated Share Repurchase (ASR) agreements for **\$50 million** each[77](index=77&type=chunk)[78](index=78&type=chunk) - The company is involved in litigation, notably the 'Solivita litigation' in Florida regarding club membership fees. Following an unfavorable ruling, the company paid **\$64.7 million** to plaintiffs in Q4 2023 and has accrued for estimated legal fees. A similar class action suit for the Bellalago community is also pending[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights sales order trends, home closings performance, gross margin, liquidity, and capital allocation activities [Business Overview and Highlights](index=25&type=section&id=Business%20Overview%20and%20Highlights) This section provides an overview of the company's residential homebuilding business and key operational and financial highlights for the quarter - The company's principal business is residential homebuilding and developing lifestyle communities across 12 states, including a recent expansion into Indiana[107](index=107&type=chunk) Q2 2024 Key Highlights: * Net sales orders increased **3%** to **3,111** * Home closings revenue was **\$1.9 billion** on **3,200** closings * Home closings gross margin was **23.8%** * Repurchased **1.7 million** common shares for **\$105 million** * Total liquidity stood at **\$1.3 billion** [Results of Operations](index=26&type=section&id=Results%20of%20Operations) This section analyzes the company's operational performance, including net sales orders, home closings, revenue, gross margin, and cancellation rates Net Sales Orders (Q2 2024 vs Q2 2023) | Region | Q2 2024 Orders | Q2 2023 Orders | Change | | :--- | :--- | :--- | :--- | | East | 1,160 | 1,047 | 10.8% | | Central | 815 | 808 | 0.9% | | West | 1,136 | 1,168 | -2.7% | | **Total** | **3,111** | **3,023** | **2.9%** | Home Closings and Revenue (Q2 2024 vs Q2 2023) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Homes Closed | 3,200 | 3,125 | 2.4% | | Average Selling Price | \$600,000 | \$639,000 | -6.1% | | Home Closings Revenue | \$1,920.1M | \$1,996.7M | -3.8% | - Consolidated home closings gross margin decreased by **40 basis points** to **23.8%** in Q2 2024, primarily due to product mix, lower premium/option revenue, and increased financing incentives in the East and Central regions. An impairment in the East region also negatively impacted margin by **30 basis points**[136](index=136&type=chunk)[138](index=138&type=chunk) - The company-wide cancellation rate improved to **9.4%** in Q2 2024 from **11.2%** in Q2 2023, attributed to improved buyer confidence amid stabilizing macroeconomic factors[130](index=130&type=chunk) - Sales order backlog increased slightly to **6,256 homes** with a value of **\$4.2 billion** as of June 30, 2024, up from **6,165 homes** valued at **\$4.1 billion** a year prior[131](index=131&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity position, cash flow trends, and capital allocation strategies, including debt and share repurchases Liquidity Summary (in thousands) | Component | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total cash, excluding restricted cash | \$246,845 | \$798,568 | | Revolving Credit Facilities availability | \$1,042,958 | \$1,038,819 | | **Total liquidity** | **\$1,289,803** | **\$1,837,387** | - Net cash used in operating activities was **\$364.1 million** for the first six months of 2024, a significant change from **\$607.1 million** provided by operations in the same period of 2023, mainly due to increased spending on real estate inventory[152](index=152&type=chunk) - Net cash used in financing activities increased to **\$137.0 million** in the first half of 2024 from **\$60.9 million** in the prior year, driven by higher common stock repurchases[155](index=155&type=chunk) [Off-Balance Sheet Arrangements](index=37&type=section&id=Off-Balance%20Sheet%20Arrangements) This section describes the company's use of off-balance sheet arrangements, primarily land option contracts and land banking agreements - The company utilizes land option contracts and land banking agreements to control land with minimal initial capital. The aggregate purchase price for land under these off-balance sheet contracts was **\$1.5 billion** as of June 30, 2024[159](index=159&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk disclosures focus on interest rate exposure, with a majority of debt at fixed rates and sensitivity analysis for variable rate debt - As of June 30, 2024, approximately **87%** of the company's debt was fixed rate, mitigating exposure to earnings and cash flow volatility from interest rate changes on that portion of debt[166](index=166&type=chunk) - Variable rate debt, which constitutes **13%** of total debt, is mainly related to mortgage warehouse facilities. A hypothetical **1%** increase in interest rates would increase annual interest expense by approximately **\$2.8 million**[166](index=166&type=chunk)[170](index=170&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2024[172](index=172&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the quarter ended June 30, 2024[173](index=173&type=chunk) Part II OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is involved in various legal claims in the normal course of business, including ongoing litigation related to club membership fees - Information regarding legal proceedings is incorporated by reference from Note 13 of the financial statements, which details ongoing litigation such as the Solivita and Bellalago cases in Florida[175](index=175&type=chunk)[94](index=94&type=chunk)[96](index=96&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=ITEM%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes to the risk factors disclosed in the company's Annual Report have occurred[176](index=176&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased common stock during the quarter, including through an Accelerated Share Repurchase program, with remaining authorization for future repurchases Share Repurchase Activity (Q2 2024) | Period | Total Shares Purchased | Average Price Paid | Total Cost (approx.) | | :--- | :--- | :--- | :--- | | April 2024 | 341,594 | \$55.25 | \$18.9M | | May 2024 | 178,835 | \$56.71 | \$10.1M | | June 2024 | 1,183,374 | \$55.55 | \$65.7M | | **Total Q2** | **1,703,803** | **\$55.61** | **\$94.7M** | - In June 2024, the company initiated a **\$50 million** Accelerated Share Repurchase (ASR) program, receiving an initial delivery of **720,461 shares**[179](index=179&type=chunk) - As of June 30, 2024, approximately **\$298.1 million** remained available for future repurchases under the board's authorization, which extends through December 31, 2025[178](index=178&type=chunk) [Item 5. Other Information](index=42&type=section&id=ITEM%205.%20Other%20Information) No directors or officers adopted, terminated, or modified Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted, terminated, or modified a Rule 10b5-1 trading plan during the three months ended June 30, 2024[182](index=182&type=chunk) [Item 6. Exhibits](index=43&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL data files

Taylor Morrison Home Corporation (NYSE:TMHC) Q2 2024 Earnings Conference Call July 24, 2024 8:30 AM ET Company Participants Mackenzie Aron - Vice President-Investor Relations Sheryl Palmer - Chairman & Chief Executive Officer Erik Heuser - Chief Corporate Operations Officer Curt VanHyfte - Chief Financial Officer Conference Call Participants Michael Rehaut - JPMorgan Mike Dahl - RBC Capital Markets Matthew Bouley - Barclays Carl Reichardt - BTIG Alan Ratner - Zelman & Associates Jay McCanless - Wedbush Ken ...

Reconciliation of Non-GAAP Financial Measures Adjusted Net Income and Adjusted Earnings Per Common Share EBITDA and Adjusted EBITDA Reconciliation | --- | --- | --- | --- | --- | --- | --- | |-------------------------------------------------|-------|---------------------------------|-------|----------------------------------|-------|---------------------------------| | (Dollars in thousands) \nTotal debt | $ | As of June 30, 2024 \n2,150,021 | $ | As of March 31, 2024 \n2,093,499 | $ | As of June 30, 2023 \ ...