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Meritage Homes (MTH) Sees a More Significant Dip Than Broader Market: Some Facts to Know

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Meritage Homes (MTH - Free Report) closed the most recent trading day at $165.95, moving -0.22% from the previous trading session. The stock fell short of the S&P 500, which registered a loss of 0.14% for the day. At the same time, the Dow lost 0.77%, and the tech-heavy Nasdaq gained 0.17%.

Heading into today, shares of the homebuilder had gained 8.58% over the past month, lagging the Construction sector's gain of 10.87% and outpacing the S&P 500's gain of 5.34% in that time.

Market participants will be closely following the financial results of Meritage Homes in its upcoming release. It is anticipated that the company will report an EPS of $3.55, marking a 0.28% rise compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $1.28 billion, showing a 0.2% escalation compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates project earnings of $17.72 per share and a revenue of $6.09 billion, demonstrating changes of -11.09% and -0.31%, respectively, from the preceding year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Meritage Homes. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Meritage Homes presently features a Zacks Rank of #4 (Sell).

Digging into valuation, Meritage Homes currently has a Forward P/E ratio of 9.39. This valuation marks a discount compared to its industry's average Forward P/E of 9.86.

The Building Products - Home Builders industry is part of the Construction sector. At present, this industry carries a Zacks Industry Rank of 75, placing it within the top 30% of over 250 industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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