Fact based stock research
Meritage Homes (NYSE:MTH)

US59001A1025

How to read the free ranks

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 87 (better than 87% of alternatives), show above-average growth (Growth Rank of 55), 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 87), above-average growth (Obermatt Growth Rank of 55), 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	87
Growth Rank	55
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.

14-Nov-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	87
GROWTH
GROWTH	59	95	47	55
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: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-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	87
GROWTH
GROWTH	59	95	47	55
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 87 (better than 87% 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, with three out of four indicators above average for Meritage Homes. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 80 which means that the stock price compared with what market professionals expect for future profits is lower than for 80% of comparable companies, indicating a good value concerning Meritage Homes's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 67, and for Dividend Yield with a Dividend Yield Rank of 85. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 56% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 44). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 87, is a buy recommendation based on Meritage Homes's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Meritage Homes has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Meritage Homes shares. 9. 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	44
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	96	86	82	80
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	63	75	61	67
DIVIDEND YIELD
DIVIDEND YIELD	1	1	64	85
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	69	67	81	87

Last update of Value Rank: 14-Nov-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 55 (better than 55% 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 half of the indicators below and half above average for Meritage Homes. Sales Growth has a rank of 85 which means that currently professionals expect the company to grow more than 85% of its competitors. Stock Returns are also above average with a rank of 61. But Capital Growth has only a rank of 31, which means that currently professionals expect the company to grow its invested capital less than 69% of its competitors. Profit Growth is also low, with a rank of only 45, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 55, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 61% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. 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 is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	43	80	33	85
PROFIT GROWTH
PROFIT GROWTH	33	75	47	45
CAPITAL GROWTH
CAPITAL GROWTH	n/a	72	32	31
STOCK RETURNS
STOCK RETURNS	31	73	83	61
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	59	95	47	55

Last update of Growth Rank: 14-Nov-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: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Meritage Homes.
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