Homebuilder Meritage Homes (NYSE: MTH) will be reporting earnings this Wednesday after market hours. Here’s what to look for.
Meritage Homes missed analysts’ revenue expectations last quarter, reporting revenues of $1.41 billion, down 13.8% year on year. It was a mixed quarter for the company, with a beat of analysts’ EPS estimates.
Is Meritage Homes a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting Meritage Homes’s revenue to decline 8.8% year on year, improving from the 10.8% decrease it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Meritage Homes has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at Meritage Homes’s peers in the home builders segment, some have already reported their Q3 results, giving us a hint as to what we can expect. KB Home’s revenues decreased 20% year on year, meeting analysts’ expectations, and PulteGroup reported a revenue decline of 9.8%, falling short of estimates by 4.2%. KB Home traded down 3% following the results while PulteGroup was up 7.3%.
Read our full analysis of KB Home’s results here and PulteGroup’s results here.
In the last year or so, investors have shifted their focus from one macro dynamic to the next (AI disintermediation and AI investment to geopolitical conflict, interest rates, and the health of the wider economy). While some of the home builders stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 4.2% on average over the last month. Meritage Homes is down 2.1% during the same time and is heading into earnings with an average analyst price target of $74 (compared to the current share price of $63.61).
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