Meritage Homes Q4 EPS Up 7.7%, Revenues Miss, Backlog Value Falls 30%
Meritage Homes’ Q4 adjusted EPS of $1.67 beat estimates by 7.7% while revenues fell 12% to $1.428B, missing consensus by 5.2% as home closings dropped 7.1% y/y and ASPs declined 5% to $375,000. With backlog down 30% in value and analyst estimates cut 19.3%, it reaffirmed 2026 guidance.
1. Quarterly Financial Results
Meritage Homes reported Q4 adjusted EPS of $1.67, topping estimates by 7.7% despite a 30.1% year-over-year decline, while total revenues declined 12% to $1.428 billion, missing the consensus mark by 5.2%.
2. Operational Performance
Homebuilding closings fell to 3,755 units (down 7.1% y/y) with ASPs of $375,000 (down 5%), though land closing revenues rose 21% to $21.1 million. Total orders slipped 2% to 3,224 units and backlog ended at 1,168 units valued at $440.6 million (down 30%).
3. Margins and Cost Trends
Home closing gross margin contracted 670 bps to 16.5% (adjusted 19.3%, off 400 bps) due to higher lot costs, incentives and non-recurring charges, while SG&A expenses were 10.6% of home closing revenues. Financial Services revenues edged down 2% to $8.2 million.
4. Balance Sheet, Returns and Outlook
Cash rose to $775.2 million with a 26% debt-to-capital ratio; the company repurchased $295 million of shares and paid $121 million in dividends. It expects 2026 home closings and revenue in line with 2025, even as analyst estimates have fallen 19.3% and its ranking signals a strong sell.