NYSE$MTH

Meritage Homes Corp · Q2 2021 earnings

Q2 2021 earnings · · Investor relations

Briefing

Meritage Homes reported record gross margin and an increase in community count, along with a significant rise in diluted EPS.

Meritage Homes reported strong second-quarter results, driven by robust homebuying demand and operational efficiencies. The company achieved a record gross margin of 27.3% and an 83% increase in diluted EPS. Home closing revenue increased by 23% year-over-year, reaching $1.3 billion.

  • Achieved a record gross margin of 27.3% for the second quarter of 2021.
  • Increased community count by 11% sequentially to 226 active communities.
  • Reported home closing revenue of $1.3 billion, a 23% increase year-over-year.
  • Diluted EPS increased by 83% year-over-year, reaching $4.36.

Headline financials

Total Revenue

$1.28B

Previous: $1.03B+23.7%
EPS (adj)

$2.37

Previous: $1.19+99.2%
Ending backlog (units)

5.5K

Previous: 4.4K+25.3%
Ending backlog value

$2.32B

Previous: $1.65B+40.6%
Average sales price - backlog

$421.00

Previous: $375.00+12.3%
Capital Expenditures

$5.98M

Previous: $5.01M+19.3%
Free Cash Flow

-$136M

Previous: $189M-171.9%
Net Income

$167M

Previous: $90.7M+84.6%
Operating Income

$216M

Previous: $116M+86.1%
Gross Profit

$345M

Previous: $221M+56.3%
Cash & Equivalents

$684M

Previous: $485M+41.2%
Total Assets

$4.32B

Previous: $3.54B+22.0%
Stock-Based Comp

$3.22M

Previous: $3.16M+2.1%

Revenue & EPS history

Meritage Homes · Revenue · Quarterly

$1.28B

Q2 2021+23.7%vs Q2 2020
Beat estimate in 14 of 16 quarters(88%)
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 2021 home closings of approximately 12,500-13,000 and home closing revenue in the range of $5.00-5.25 billion. They also anticipate a full-year home closing gross margin of around 27.5% and diluted EPS of approximately $18.55-19.45.

Tailwinds

  • Strong housing demand and ability to sell homes soon after release.
  • Expected net construction costs to stay flat or decline over the next couple of quarters due to lumber price declines.
  • Ongoing community count growth contributing to strong financial results.
  • Anticipated home closing gross margin of around 27.5% for the full year.
  • Projected diluted EPS of approximately $18.55-19.45 for 2021.

Headwinds

  • Adjusting and maximizing prices based on market conditions.
  • Orders pace aligned with production schedule due to supply chain constraints.
  • Potential impact of supply chain constraints on production.
  • Uncertainty in the housing market due to fluctuating macroeconomic conditions.
  • Possible changes in interest rates and availability of residential mortgages.

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 Q2 2021

Historical avgQ2 2021

+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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