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In the last reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 3.5%, but home closing revenues missed the same by 0.2%. Earnings improved 57% on a year-over-year basis. The company surpassed earnings estimates in the trailing 13 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for first-quarter 2022 earnings has been unchanged over the past 60 days at $4.69 per share. Nonetheless, the said figure indicates a 36.3% increase from the year-ago earnings of $3.44 per share. The consensus mark for revenues is $1.26 billion, suggesting a 16.4% year-over-year improvement.
Despite unprecedented supply chain issues and increased inflation, Meritage Homes’ first-quarter revenues are expected to have increased from the year-ago level, buoyed by a highly motivated buyer.
Meritage Homes announced that it has been experiencing solid demand for homes (especially entry-level homes). Meritage Homes has been focused on growing demand for entry-level homes with its LiVE.NOW product that addresses the need for lower-priced homes.
The Zacks Consensus Estimate for the company’s homes closed is pegged at 2,924 units, which indicates an increase from 2,890 a year ago but a sequential decline from 3,526 homes. The same for home closing revenues is pegged at $1,254 million, which indicates a 16.1% increase from the year-ago period but a 16.3% sequential drop.
Meritage Homes has been witnessing industry-wide supply chain challenges, municipal delays, and higher material and labor costs.
To combat these aforementioned woes, the company has been raising average prices for homes. This, in turn, is likely to have helped in maintaining margins. The Zacks Consensus Estimate for the average selling price for homes is pegged at $429,000, which indicates an increase from $374,000 in the year-ago period.
The Zacks Consensus Estimate for home closing gross margin is pegged at 28.4%, which indicates an increase from the year-ago level of 24.7%.
Other Projections
The Zacks Consensus Estimate for total closing revenues (Homebuilding) is $1,259 million, indicating growth from the year-ago figure of $1,083.8 million. Backlog for first-quarter 2022 is pegged at 6,712 homes, indicating an increase from 5,240 units reported in first-quarter 2021. Potential value of the backlog is pegged at $2,914 million, indicating a rise of 40% year over year.
The Zacks Consensus Estimate for Financial Services revenues is pegged at $5.15 million, suggesting growth from $4.75 million in the prior-year quarter.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Meritage Homes for the quarter to be reported. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: MTH has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.
United Rentals, Inc. (URI - Free Report) has an Earnings ESP of +10.11% and carries a Zacks Rank #3.
URI’s earnings topped the consensus mark in two of the last four quarters but missed on the other two occasions, with the average surprise being 2.9%.
PotlatchDeltic Corporation (PCH - Free Report) has an Earnings ESP of +7.24% and holds a Zacks Rank #2.
PCH’s earnings topped the consensus mark in three of the last four quarters, with the average being 6.4%.
KBR, Inc. (KBR - Free Report) has an Earnings ESP of +6.64% and a Zacks Rank #2.
In the trailing four quarters, KBR’s earnings topped the consensus mark in all the last four quarters, with the average being 10.4%.
Image: Bigstock
Meritage Homes (MTH) to Post Q1 Earnings: What's in the Offing?
Meritage Homes Corporation (MTH - Free Report) is slated to report first-quarter 2022 results on Apr 27, after market close.
In the last reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 3.5%, but home closing revenues missed the same by 0.2%. Earnings improved 57% on a year-over-year basis. The company surpassed earnings estimates in the trailing 13 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for first-quarter 2022 earnings has been unchanged over the past 60 days at $4.69 per share. Nonetheless, the said figure indicates a 36.3% increase from the year-ago earnings of $3.44 per share. The consensus mark for revenues is $1.26 billion, suggesting a 16.4% year-over-year improvement.
Meritage Homes Corporation Price and EPS Surprise
Meritage Homes Corporation price-eps-surprise | Meritage Homes Corporation Quote
Factors to Note
Despite unprecedented supply chain issues and increased inflation, Meritage Homes’ first-quarter revenues are expected to have increased from the year-ago level, buoyed by a highly motivated buyer.
Meritage Homes announced that it has been experiencing solid demand for homes (especially entry-level homes). Meritage Homes has been focused on growing demand for entry-level homes with its LiVE.NOW product that addresses the need for lower-priced homes.
The Zacks Consensus Estimate for the company’s homes closed is pegged at 2,924 units, which indicates an increase from 2,890 a year ago but a sequential decline from 3,526 homes. The same for home closing revenues is pegged at $1,254 million, which indicates a 16.1% increase from the year-ago period but a 16.3% sequential drop.
Meritage Homes has been witnessing industry-wide supply chain challenges, municipal delays, and higher material and labor costs.
To combat these aforementioned woes, the company has been raising average prices for homes. This, in turn, is likely to have helped in maintaining margins. The Zacks Consensus Estimate for the average selling price for homes is pegged at $429,000, which indicates an increase from $374,000 in the year-ago period.
The Zacks Consensus Estimate for home closing gross margin is pegged at 28.4%, which indicates an increase from the year-ago level of 24.7%.
Other Projections
The Zacks Consensus Estimate for total closing revenues (Homebuilding) is $1,259 million, indicating growth from the year-ago figure of $1,083.8 million. Backlog for first-quarter 2022 is pegged at 6,712 homes, indicating an increase from 5,240 units reported in first-quarter 2021. Potential value of the backlog is pegged at $2,914 million, indicating a rise of 40% year over year.
The Zacks Consensus Estimate for Financial Services revenues is pegged at $5.15 million, suggesting growth from $4.75 million in the prior-year quarter.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Meritage Homes for the quarter to be reported. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: MTH has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With Favorable Combination
Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.
United Rentals, Inc. (URI - Free Report) has an Earnings ESP of +10.11% and carries a Zacks Rank #3.
URI’s earnings topped the consensus mark in two of the last four quarters but missed on the other two occasions, with the average surprise being 2.9%.
PotlatchDeltic Corporation (PCH - Free Report) has an Earnings ESP of +7.24% and holds a Zacks Rank #2.
PCH’s earnings topped the consensus mark in three of the last four quarters, with the average being 6.4%.
KBR, Inc. (KBR - Free Report) has an Earnings ESP of +6.64% and a Zacks Rank #2.
In the trailing four quarters, KBR’s earnings topped the consensus mark in all the last four quarters, with the average being 10.4%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.