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Meritage Homes (MTH) Outpaces Stock Market Gains: What You Should Know

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Meritage Homes (MTH - Free Report) closed the latest trading day at $164.41, indicating a +0.83% change from the previous session's end. The stock's performance was ahead of the S&P 500's daily gain of 0.11%. Meanwhile, the Dow experienced a drop of 0.11%, and the technology-dominated Nasdaq saw an increase of 0.23%.

The homebuilder's shares have seen an increase of 5.57% over the last month, surpassing the Construction sector's gain of 1.99% and the S&P 500's gain of 1.5%.

The investment community will be closely monitoring the performance of Meritage Homes in its forthcoming earnings report. The company is scheduled to release its earnings on April 24, 2024. It is anticipated that the company will report an EPS of $3.56, marking a 0.56% 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 0.26% escalation compared to the year-ago quarter.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $17.72 per share and a revenue of $6.1 billion, signifying shifts of -11.09% and -0.27%, respectively, from the last year.

It is also important to note the recent changes to analyst estimates for Meritage Homes. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.04% higher. Right now, Meritage Homes possesses a Zacks Rank of #4 (Sell).

With respect to valuation, Meritage Homes is currently being traded at a Forward P/E ratio of 9.2. This denotes a discount relative to the industry's average Forward P/E of 9.69.

The Building Products - Home Builders industry is part of the Construction sector. This industry, currently bearing a Zacks Industry Rank of 42, finds itself in the top 17% echelons of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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