Meritage Homes expects 2026 home closing volume and revenue to be about 5% below 2025
Company says home closing revenue could trend lower if market conditions require higher incentives
Meritage reiterates 5-10% yr-over-yr community count growth expectation for full year 2026
Overview
U.S. homebuilder's Q2 home closing revenue fell 14% yr/yr on lower volume and pricing
Adjusted diluted EPS for Q2 dropped 32% yr/yr as margins and revenue declined
Company returned $131 mln to shareholders via buybacks and dividends in Q2
Result Drivers
Softer demand - Co said spring selling season was softer than expected due to macroeconomic uncertainty and volatile interest rates pressuring buyer psychology
Lower volume and pricing - Q2 revenue decline was driven by 11% fewer homes closed and a 4% decrease in average sales price, primarily due to geographic mix
Margin pressure - Gross margin fell due to lost leverage on lower revenue and higher lot costs, partially offset by direct cost savings and quicker cycle times
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 6 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the homebuilding peer group is "buy"
Wall Street's median 12-month price target for Meritage Homes Corp is $80.00, about 9.2% above its July 28 closing price of $73.24
The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 10 three months ago
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