NYSE$MTH

Meritage Homes Corp · Q3 2023 earnings

Q3 2023 earnings · · Investor relations

Briefing

Meritage Homes reported a decrease in net earnings and diluted EPS, but experienced a significant increase in sales orders, driven by accelerated cycle times and move-in ready inventory.

Meritage Homes reported a 50% year-over-year increase in sales orders driven by accelerated cycle times and move-in ready inventory. Home closing revenue increased by 3% to $1.6 billion. Diluted EPS decreased by 16% to $5.98.

  • Sales orders increased by 50% year-over-year, driven by a 52% increase in average absorption pace.
  • Home closing revenue increased by 3% year-over-year to $1.6 billion.
  • Diluted EPS decreased by 16% year-over-year to $5.98.
  • The company repurchased $45.0 million of common stock and redeemed $150.0 million of senior notes.

Headline financials

Total Revenue

$1.61B

Previous: $1.58B+2.2%
EPS (adj)

$2.99

Previous: $3.55-15.8%
Ending backlog (units)

3.6K

Previous: 6.1K-40.5%
Ending backlog value

$1.56B

Previous: $2.83B-44.9%
Average sales price - backlog

$432K

Previous: $466K-7.3%
Capital Expenditures

$10.1M

Previous: $6.69M+50.9%
Free Cash Flow

$94.1M

Previous: $30.3M+210.3%
Net Income

$222M

Previous: $262M-15.5%
Operating Income

$286M

Previous: $308M-7.2%
Gross Profit

$430M

Previous: $451M-4.7%
Cash & Equivalents

$1.05B

Previous: $299M+250.3%
Total Assets

$6.18B

Previous: $5.57B+11.0%
Stock-Based Comp

$6.16M

Previous: $6.85M-10.2%

Revenue & EPS history

Meritage Homes · Revenue · Quarterly

$1.61B

Q3 2023+2.2%vs Q3 2022
Beat estimate in 9 of 14 quarters(64%)
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 3,500-3,700 home closings for the fourth quarter of 2023, which they anticipate will generate quarterly home closing revenue of $1.45-1.53 billion. Home closing gross margin is projected to be 25-26%. With an estimated effective tax rate of about 23%, they expect diluted EPS to be in the range of $4.84-5.43 for the fourth quarter of 2023.

Tailwinds

  • Projecting 3,500-3,700 home closings
  • Expecting quarterly home closing revenue of $1.45-1.53 billion
  • Home closing gross margin projected to be 25-26%
  • Estimated effective tax rate of about 23%
  • Diluted EPS expected to be in the range of $4.84-5.43

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 Q3 2023

Historical avgQ3 2023

+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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