Fact based stock research
Meritage Homes (NYSE:MTH)

US59001A1025

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Meritage Homes stock research in summary

meritagehomes.com

ANALYSIS: With an Obermatt Combined Rank of 26 (worse than 74% compared with investment alternatives), Meritage Homes (Homebuilding, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Meritage Homes are a good value (attractively priced) with a consolidated Value Rank of 97 (better than 97% of alternatives), show above-average growth (Growth Rank of 50), and are safely financed (Safety Rank of 53), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 26, is a hold recommendation based on Meritage Homes's financial characteristics. As the company Meritage Homes's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 97), above-average growth (Obermatt Growth Rank of 50), and indicate that the company is safely financed (Obermatt Safety Rank of 53), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Meritage Homes. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	97
Growth Rank	50
Safety Rank	53
Combined Rank	26

Country	USA
Industry	Homebuilding
Index	Customer Focus US, Human Rights
Size class	X-Large

This stock has achievements: Top 10 Stock.

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Meritage Homes

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	69	67	81	97
GROWTH
GROWTH	59	95	47	50
SAFETY
SAFETY	59	53	53	53
SENTIMENT
SENTIMENT	n/a	9	65	^new
360° VIEW
360° VIEW	n/a	73	97	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Meritage Homes is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	69	67	81	97
GROWTH
GROWTH	59	95	47	50
SAFETY
SAFETY	59	53	53	53
COMBINED
COMBINED	76	26	26	26

Last update of combined financial performance: 6-Oct-2022. Stock analysis on combined financial performance: The higher the rank of Meritage Homes the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 97 (better than 97% compared with alternatives) for 2022, Meritage Homes shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Meritage Homes. Price-to-Sales is 56 which means that the stock price compared with what market professionals expect for future sales is lower than for 56% of comparable companies, indicating a good value for Meritage Homes's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 85% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 67. Compared with other companies in the same industry, dividend yields of Meritage Homes are expected to be higher than for 89% of all competitors (a Dividend Yield rank of 89). ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 97, is a buy recommendation based on Meritage Homes's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Meritage Homes based on its detailed value metrics. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	73	75	43	56
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	96	86	82	85
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	63	75	61	67
DIVIDEND YIELD
DIVIDEND YIELD	1	1	64	89
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	69	67	81	97

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Meritage Homes; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 50 (better than 50% compared with alternatives), Meritage Homes shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below-average for Meritage Homes. While Sales Growth ranks at 80, professionals currently expect the company to grow more than 80% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 43, which means that, currently, professionals expect the company to grow its profits less than 57% of its competitors, and Capital Growth has a low rank of 34. Historic stock returns were also below average with a current Stock Returns rank of 45 which means that the stock returns have recently been below 55% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 50, is a buy recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance isn't stellar here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	43	80	33	80
PROFIT GROWTH
PROFIT GROWTH	33	75	47	43
CAPITAL GROWTH
CAPITAL GROWTH	n/a	72	32	34
STOCK RETURNS
STOCK RETURNS	31	73	83	45
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	59	95	47	50

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Meritage Homes.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 53 (better than 53% compared with alternatives), the company Meritage Homes has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Meritage Homes is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Meritage Homes. Leverage is at 64, meaning the company has a below-average debt-to-equity ratio. It has less debt than 64% of its competitors. Refinancing is at a rank of 98, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 98% of its competitors. Finally, Liquidity is also good at a rank of 80, which means that the company generates more profit to service its debt than 80% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 53 (better than 53% compared with alternatives), Meritage Homes has a financing structure that is safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. Investors may not have a debt issue with Meritage Homes but they should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	22	58	58	64
REFINANCING
REFINANCING	92	98	98	98
LIQUIDITY
LIQUIDITY	48	91	100	80
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	59	53	53	53

Last update of Safety Rank: 6-Oct-2022. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Meritage Homes and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	34	48	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	32	78	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	35	65	^new
MARKET PULSE
MARKET PULSE	n/a	24	28	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	9	65	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Meritage Homes.
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