Meritage Homes is a homebuilder trading at 11.2x forward earnings with strong price momentum, but quality falls below minimum thresholds at 3.3/10, revenues are declining -18% year-over-year, and a 3-of-4-quarter earnings miss streak raises serious concerns about near-term execution.
Thesis pillars
- Below Quality Floor→Stable
- Earnings Miss Streak Execution Risk↑Improving
- Declining Revenue Value Trap Risk↓Deteriorating
- +1 more pillar — see the Why tab for full reasoning
Pillars as of Jul 3, 2026, based on the 10-K filed Feb 13, 2026
Meritage Homes Corporation (MTH) Stock Analysis
Recovery setup
Consumer Cyclical · Residential Construction
Sell if holding. Engine safety override at $62.02: Quality below floor (3.8 < 4.0) triggers a hard block regardless of the otherwise-positive setup — overall score 4.8/10. Specifically: High short interest: 12%; Below-average business quality; Below long-term trend.
Meritage Homes builds single-family attached and detached homes across 12 states in three regions, focused on entry-level and first move-up buyers at an average sales price of approximately $384,000. Home closing revenue was $5.8 billion in 2025 across 336 active communities;... Read more
Sell if holding. Engine safety override at $62.02: Quality below floor (3.8 < 4.0) triggers a hard block regardless of the otherwise-positive setup — overall score 4.8/10. Specifically: High short interest: 12%; Below-average business quality; Below long-term trend. Chart setup: Death cross but MACD improving, RSI 54. Score 4.8/10, moderate confidence.
Passes 6/10 gates (positive momentum, clean insider activity, news events none recent, earnings proximity no date, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio and death cross (50MA < 200MA). Suitability: aggressive.
About Meritage Homes Corporation
About Meritage Homes Corporation
Meritage Homes operated 336 active selling communities across 12 states in three geographic regions at December 31, 2025, generating $5.8 billion in home closing revenue for the year — a 9.1% decline year-over-year as affordability pressure compressed both closing volume and average selling prices to approximately $384,000. The company focuses on entry-level and first move-up buyers and ranks as the fifth largest homebuilder in America.
Meritage earns revenue through transactional home sales under a 100% spec model, pre-starting all homes with preselected plans and features so buyers can close within 60 calendar days. All construction is performed by unaffiliated third-party subcontractors hired via competitive bids, creating exposure to labor cost volatility and skilled-trade shortages in certain markets. Land costs remained elevated in 2025: the company invested approximately $1.9 billion in land acquisition and development and held 77,625 lots under control at year-end, with roughly 72% owned. Home closing gross margin declined to 19.7%, 520 basis points below 24.9% in 2024, driven by increased financing incentive utilization, higher lot costs, $39.4 million in terminated land contract charges, and $16.5 million of real estate-related impairments. The company also provides title, mortgage, and insurance services through a financial services segment. Competition spans national, regional, and local homebuilders as well as the resale market.
Show full overview
Meritage's margins are directly tied to mortgage rate dynamics and consumer affordability. The 10-K notes that most buyers finance through the company's mortgage joint venture or third-party lenders and that rapid interest rate increases could accelerate backlog cancellations. To offset affordability pressure in 2025, the company expanded use of interest rate locks and buy-downs; the 10-K acknowledges these incentive tools are expensive and their availability cannot be guaranteed. Home order value fell 3.8% in 2025 due entirely to lower average selling price from increased incentive utilization, illustrating how quickly affordability constraints pass through to realized pricing.
See also: Consumer Cyclical · Residential Construction
From Meritage Homes Corporation's most recent 10-K filing, extracted June 11, 2026.
Recent developments
updated 2026-10-29Recent Developments — Meritage Homes Corporation
Latest news
- NEWS Meritage Homes Corporation Reports Third Quarter 2026 Financial Results — fiscal.ai Oct 28, 2026
- NEWS 10 Consumer Discretionary Stocks Moving In Wednesday's After-Market Session — benzinga Oct 28, 2026 neutral
- NEWS Meritage Homes Q3 Adj. EPS $1.11 Misses $1.18 Estimate, Sales $1.168B Miss $1.305B Estimate — benzinga Oct 28, 2026 negative
- NEWS Ten-Year Treasury Yields Fall Below 5%: These 10 Real-Estate Stocks Are Rallying Sharply — benzinga Oct 22, 2026 neutral
- NEWS Goldman Sachs Maintains Buy on Meritage Homes, Lowers Price Target to $82 — benzinga Oct 12, 2026 neutral
Generated 2026-10-29T11:48:40Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Material Events(8-K, last 90d)
- 2026-03-26Item 5.02LOWExecutive Compensation Committee approved compensation increases for CEO Phillippe Lord, CFO Hilla Sferruzza, EVP/General Counsel Malissia Clinton, and EVP/Chief People Officer Javier Feliciano effective March 23, 2026. No departures; routine compensation adjustments under existing employment agreements.SEC filing →
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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Rating Breakdown
3 floor-breakers
Revenue shrinking — -13.8% YoY. Growth thesis broken unless recovery story develops.static
Ranks in the bottom of its industry peers on the composite signal. Better names in the same sector exist.static
Quality below the gate floor. Component breakdown shows what dragged the score down.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Engine safety override at $62.02: Quality below floor (3.8 < 4.0) triggers a hard block regardless of the otherwise-positive setup — overall score 4.8/10. Specifically: High short interest: 12%; Below-average business quality; Below long-term trend. Chart setup: Death cross but MACD improving, RSI 54. Prior stop was $57.68. Score 4.8/10, moderate confidence.
Analyst target: $64.38 (+3.8% upside). Prior stop was $57.68. Stop-loss: $57.68.
Quality below floor (3.8 < 4.0); Value-trap signals (2/5): Margin compression (op margin -73.7%), High leverage (D/E 6.1).
Meritage Homes Corporation trades at a P/E of 12.9 (forward 11.3). TrendMatrix value score: 7.6/10. Verdict: Sell.
15 analysts cover MTH with a consensus score of 3.7/5. Average price target: $74.
What does Meritage Homes Corporation do?Meritage Homes builds single-family attached and detached homes across 12 states in three regions, focused on...
Meritage Homes builds single-family attached and detached homes across 12 states in three regions, focused on entry-level and first move-up buyers at an average sales price of approximately $384,000. Home closing revenue was $5.8 billion in 2025 across 336 active communities; the company also offers title, mortgage, and insurance through a financial services segment.