NYSE$MTH

Meritage Homes Corp · Q1 2022 earnings

Q1 2022 earnings · · Investor relations

Briefing

Meritage Homes reported a robust start to the 2022 spring selling season, achieving record financial results and a 12% increase in orders over the prior year.

Meritage Homes reported strong first-quarter results for 2022, including a 68% increase in diluted EPS, a 560 bps increase in home closing gross margin, and a 12% increase in orders over the prior year. The company's performance was driven by sustained demand, favorable pricing power, and strategic focus on entry-level and first move-up homes.

  • Highest quarterly sales order volume achieved in Q1 2022.
  • Home closing revenue increased by 15% year-over-year to $1.2 billion.
  • Home closing gross margin improved by 560 bps to 30.3%.
  • Diluted EPS increased by 68% year-over-year to $5.79.

Headline financials

Total Revenue

$1.29B

Previous: $1.08B+18.7%
EPS (adj)

$2.90

Previous: $1.72+68.6%
Ending backlog (units)

6.7K

Previous: 5.2K+27.8%
Ending backlog value

$3.04B

Previous: $2.08B+45.9%
Average sales price - backlog

$454.00

Previous: $397.00+14.4%
Capital Expenditures

$6.42M

Previous: $4.99M+28.6%
Free Cash Flow

$5.77M

Previous: -$18.9M+130.4%
Net Income

$217M

Previous: $132M+64.8%
Operating Income

$286M

Previous: $166M+72.2%
Cash & Equivalents

$520M

Previous: $716M-27.4%
Total Assets

$5.06B

Previous: $4.04B+25.3%
Stock-Based Comp

$5.98M

Previous: $5.37M+11.3%

Revenue & EPS history

Meritage Homes · Revenue · Quarterly

$1.29B

Q1 2022+18.7%vs Q1 2021
Beat estimate in 13 of 16 quarters(81%)
ActualEstimate

Revenue by segment

Meritage Homes · $23.1M total across 2 segments · Q1 2023

  • Land closing revenue
    $17.4M
  • Financial services revenue
    $5.73M

Forward guidance

Meritage Homes projects 14,500-15,500 home closings for the full year 2022, generating $6.5-6.9 billion in home closing revenue. Home closing gross margin is projected to be in the low 28% range, and diluted EPS is expected to be in the range of $26.30-27.90 for 2022.

Tailwinds

  • Projecting 14,500-15,500 home closings for the full year 2022.
  • Anticipating $6.5-6.9 billion in home closing revenue.
  • Home closing gross margin is projected to be in the low 28% range.
  • Expecting diluted EPS to be in the range of $26.30-27.90 for 2022.
  • Mid-year goal of a 300 community count is within reach.

Headwinds

  • Interest rates are increasing.
  • Operating environment remains constrained.
  • Still carefully navigating the constrained operating environment.
  • Commodity costs are high.
  • Effective income tax rate was higher in 2022 compared to 2021 due to the expiration of the 2019 Taxpayer Certainty and Disaster Tax Relief Act.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2022

Historical avgQ1 2022

+1.0%

Avg return

Earnings day

+2.0%

Avg return

5 days after

+4.3%

Avg return

30 days after

50%

33 / 66 earnings

Positive

+20.9%

Q2 2019

Best reaction

-11.8%

Q1 2016

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+1.9%+1.0%-6.6%
Q4 2025+1.1%+5.2%+9.0%
Q3 2025-5.9%-7.4%+2.9%
Q2 2025-5.4%-7.1%+7.1%
Q1 2025+1.0%-1.8%-5.8%
Q4 2024+2.8%-1.8%-8.1%
Q3 2024-3.8%-0.6%+2.6%
Q2 2024+1.1%+3.7%+13.9%
Q1 2024+4.3%+7.1%+10.4%
Q4 2023-8.8%-9.9%-5.2%
Q3 2023+9.0%+19.1%+26.2%
Q2 2023+7.0%+6.1%-5.4%
Q1 2023-2.2%+0.7%-6.4%
Q4 2022+8.3%+2.5%+2.1%
Q3 2022+1.6%+4.3%+17.8%
Q2 2022+2.6%+2.4%-6.5%
Q1 2022+4.2%+3.8%+5.9%
Q4 2021-5.6%-2.4%-6.5%
Q3 2021+4.1%+2.2%+9.0%
Q2 2021+10.6%+13.0%+16.1%
Q1 2021+12.6%+13.6%+13.3%
Q4 2020-8.5%-12.0%-10.3%
Q3 2020-11.1%-12.7%-17.1%
Q2 2020+5.3%+15.3%+23.0%
Q1 2020+19.9%+16.3%+59.5%
Q4 2019+3.4%+1.9%-10.5%
Q3 2019-0.6%+0.4%-10.0%
Q2 2019+20.9%+17.8%+20.3%
Q1 2019+5.4%+3.6%+3.9%
Q4 2018+11.5%+10.0%+7.5%
Q3 2018+7.8%+5.4%+15.5%
Q2 2018-0.1%-0.9%+0.8%
Q1 2018+7.0%+4.0%+7.2%
Q4 2017+3.2%-0.3%-8.9%
Q3 2017-0.1%+1.1%+5.9%
Q2 2017+7.9%+7.6%-0.1%
Q1 2017-1.8%-3.8%+1.8%
Q4 2016-6.4%-6.3%-1.2%
Q3 2016-6.9%-8.7%+11.0%
Q2 2016-10.2%-12.9%-12.0%
Q1 2016-11.8%
Q4 2015+17.9%
Q3 2015-10.2%
Q2 2015-2.5%
Q1 2015-3.9%
Q4 2014+9.3%
Q3 2014-5.3%
Q2 2014-7.6%
Q1 2014-7.2%
Q4 2013-1.2%
Q3 2013+6.7%
Q2 2013-7.0%
Q1 2013+9.1%
Q4 2012-3.2%
Q3 2012-8.7%
Q2 2012+14.5%
Q1 2011-2.2%
Q1 2012+2.8%
Q4 2009-1.7%
Q4 2011-1.7%
Q3 2010+0.1%
Q3 2011+0.1%
Q2 2011-1.0%
Q2 2010-1.0%
Q4 2010-1.0%
Q1 2010-4.7%

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