Meritage Homes (NYSE:MTH) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Meritage Homes Corporation (NYSE:MTH) is scheduled to report Q3 earnings results after markets close for trading on October 21, 2020.

The company is expected to report earnings of $2.41/share on revenue of $1.1 billion. The consensus earnings per share (EPS) of $2.41/share is based on a poll of 8 analysts and represents a growth in eps of 34.7% over the same quarter last year, when the company reported earnings of $1.79/share.

The revenue forecast of $1.1 billion based on a poll of 5 analysts implies a year-over-year (YoY) growth in revenue of 16.9%. Last year the company reported $940.9 million in revenue for the quarter.

Expected to report EPS growth of 34.7% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,100.24 $940.88 16.9%
EPS $2.41 $1.79 34.7%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarters.

What are your expectations from Meritage Homes Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.53 $2.38 56.0% Beat
Q1, 2020 $1.27 $1.83 43.6% Beat
Q4, 2019 $1.92 $2.78 44.6% Beat
Q3, 2019 $1.50 $1.79 19.5% Beat
Q2, 2019 $1.03 $1.31 27.3% Beat
Q1, 2019 $0.64 $0.65 2.0% Beat
Q4, 2018 $1.52 $1.93 27.2% Beat
Q3, 2018 $1.36 $1.33 −2.3% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 5.3%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 22, 2020 $84.97 $89.50 5.3% Increase
April 28, 2020 $44.68 $53.56 19.9% Increase
January 29, 2020 $70.91 $73.36 3.5% Increase
October 22, 2019 $74.80 $74.38 −0.6% Decline

Fundamentals And Technical Analysis

Meritage Homes Corporation is currently trading at $112.57/share, up 0.9% for the day. The company is trading at approximately 96.4% of its 52-week high of $117.06/share. The company’s stock price is up 25.8% since the last earnings report and down −2.1% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 60.00 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:MTH Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 12.58 and a forward P/E multiple of 11.82.

Meritage Homes Corporation’s current share price also implies a price-to-book (P/B) multiple of 2.02. The following table summarizes some other key fundamental ratios:

Data as of October 19, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $112.57
P/E Ratio 12.6x
P/E Ratio (Fwd) 11.8x
PEG Ratio 0.2
Total Debt / Total Capital 19.6%
Levered Free Cash Flow $448.3 million
EV / EBITDA 10.8x

Finbox

Meritage Homes Corporation is a mid-cap stock with a market capitalization of $4.197 billion and a total enterprise value of $4.761 billion. The company operates in the Consumer Discretionary sector and the Household Durables industry.

Meritage Homes Corporation designs and builds single-family homes in the United States. The company operates through two segments, Homebuilding and Financial Services. It acquires and develops land; and constructs, markets, and sells homes for first-time and first move-up buyers. The company also offers luxury homes under the Monterey Homes brand name; and title insurance and closing/settlement services to its homebuyers. It builds and sells homes in Texas, Arizona, California, Colorado, Florida, North Carolina, South Carolina, Georgia, and Tennessee under the Meritage Homes brand name. Meritage Homes Corporation was founded in 1985 and is based in Scottsdale, Arizona.

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