Core Viewpoint - Meritage Homes reported weaker-than-expected Q3 2025 results, with earnings and revenues declining year-over-year, attributed to ongoing housing market challenges and increased costs [2][3][4]. Earnings & Revenue Discussion - Earnings per share (EPS) of $1.39 fell 18.7% short of the Zacks Consensus Estimate of $1.71 and declined 48% year-over-year from $2.67 [4]. - Total revenues amounted to $1.424 billion, down from $1.597 billion reported in the year-ago period [4]. - Total closing revenues were $1.42 billion, an 11% decline from the prior-year quarter and missing the consensus mark of $1.52 billion by 6.6% [5]. Segment Details - Home closing revenues of $1.40 billion declined 12% from the prior-year quarter due to lower average selling prices (ASPs) and reduced closing volumes [6]. - The company closed 3,685 units, down 7% from the year-ago quarter, with an ASP of $380,000, a 5% decline year-over-year [7]. - The quarter-end backlog totaled 1,699 units, down 26% year-over-year, with a backlog value decrease of 28% to $670 million [8]. Cost and Margin Analysis - Home closing gross margin contracted 570 basis points to 19.1%, primarily due to increased buyer incentives and higher lot costs [8]. - SG&A expenses as a percentage of home closing revenues rose to 10.8% from 9.9% in the prior-year quarter, driven by reduced leverage on lower revenues [9]. Financial Position and Shareholder Returns - The company ended the quarter with $729 million in cash and equivalents, up from $652 million at year-end 2024, with a debt-to-capital ratio of 25.7% [11]. - During the quarter, Meritage returned $85 million to shareholders, including $55 million in share repurchases and $30 million in dividends [12]. Q4 2025 Guidance - The company expects home closings between 3,800 and 4,000 homes, with projected home closing revenues between $1.46 billion and $1.54 billion [13]. - EPS is expected to be between $1.51 and $1.70, down from $2.36 reported a year ago [13]. Estimate Revisions and Market Outlook - There has been a downward trend in estimates, with the consensus estimate shifting -12.57% [14]. - Meritage has a Zacks Rank 4 (Sell), indicating expectations of below-average returns in the coming months [16]. Industry Comparison - Meritage belongs to the Zacks Building Products - Home Builders industry, where PulteGroup reported revenues of $4.4 billion, a year-over-year change of -1.6% [17].