Meritage Homes (NYSE:MTH) Stock Bumped Down to Strong Sell by Zacks Research

Key Points

• Zacks Research downgraded Meritage Homes from “Hold” to “Strong Sell,” while the broader analyst consensus remains “Hold” with a $74.78 price target.
• Shares opened at $58.82, down 3%, near their 12-month low of $58.03 and well below the 50-day and 200-day moving averages.
• Meritage Homes beat quarterly EPS estimates ($1.42 versus $1.30), but revenue fell 14.1% year over year to $1.41 billion and EPS declined from $2.04 in the prior-year quarter, signaling weaker operating performance.

Meritage Homes (NYSE:MTH - Get Free Report) was downgraded by equities researchers at Zacks Research from a "hold" rating to a "strong sell" rating in a research report issued to clients and investors on Thursday, Zacks reports.

Several other analysts have also recently commented on the company. Wall Street Zen upgraded Meritage Homes from a "sell" rating to a "hold" rating in a report on Saturday, July 25th. Truist Financial set a $72.00 price target on shares of Meritage Homes and gave the stock a "hold" rating in a report on Wednesday, September 16th. Evercore set a $65.00 price target on shares of Meritage Homes in a research report on Friday, September 25th. UBS Group reaffirmed a "buy" rating and issued a $88.00 price objective (up from $86.00) on shares of Meritage Homes in a research note on Friday, July 31st. Finally, Weiss Ratings cut shares of Meritage Homes from a "hold (c+)" rating to a "hold (c)" rating in a research report on Friday, September 18th. Four analysts have rated the stock with a Buy rating, seven have issued a Hold rating and two have issued a Sell rating to the company. According to MarketBeat, Meritage Homes has a consensus rating of "Hold" and a consensus price target of $74.78.

Meritage Homes Stock Down 3.0%

Shares of MTH opened at $58.82 on Thursday. The company has a market capitalization of $3.83 billion, a PE ratio of 12.31, a PEG ratio of 4.50 and a beta of 1.33. Meritage Homes has a 12 month low of $58.03 and a 12 month high of $85.38. The stock's 50-day moving average price is $67.73 and its two-hundred day moving average price is $68.82. The company has a current ratio of 1.97, a quick ratio of 1.97 and a debt-to-equity ratio of 0.37.

Meritage Homes (NYSE:MTH - Get Free Report) last released its quarterly earnings results on Wednesday, July 29th. The construction company reported $1.42 EPS for the quarter, beating analysts' consensus estimates of $1.30 by $0.12. Meritage Homes had a return on equity of 7.13% and a net margin of 6.11%. The firm had revenue of $1.41 billion for the quarter, compared to analyst estimates of $1.43 billion. During the same quarter in the previous year, the company posted $2.04 EPS. The business's revenue was down 14.1% on a year-over-year basis. On average, analysts anticipate that Meritage Homes will post 4.97 EPS for the current year.

Hedge Funds Weigh In On Meritage Homes

Institutional investors and hedge funds have recently modified their holdings of the business. Bamco Inc. NY acquired a new position in shares of Meritage Homes during the 2nd quarter valued at $112,498,000. Bank of New York Mellon Corp acquired a new position in Meritage Homes during the 2nd quarter worth approximately $68,873,000. Vaughan Nelson Investment Management L.P. boosted its holdings in Meritage Homes by 16.3% in the first quarter. Vaughan Nelson Investment Management L.P. now owns 675,770 shares of the construction company's stock worth $41,790,000 after acquiring an additional 94,570 shares in the last quarter. Algert Global LLC grew its stake in Meritage Homes by 267.8% in the second quarter. Algert Global LLC now owns 356,121 shares of the construction company's stock valued at $29,861,000 after acquiring an additional 259,291 shares during the period. Finally, SummitTX Capital L.P. grew its stake in Meritage Homes by 16.1% in the first quarter. SummitTX Capital L.P. now owns 471,614 shares of the construction company's stock valued at $29,165,000 after acquiring an additional 65,540 shares during the period. 98.44% of the stock is currently owned by institutional investors.

Key Stories Impacting Meritage Homes

Here are the key news stories impacting Meritage Homes this week:

• Neutral Sentiment: Zacks Research maintained a “Hold” rating but made small downward revisions to its earnings forecasts. Estimates were reduced to $5.00 EPS for fiscal 2026, $5.86 for fiscal 2027, $1.78 for the fourth quarter of 2027, $1.86 for the third quarter of 2028, and $6.98 for fiscal 2028. The revisions suggest modestly softer expectations rather than a major change in the company’s outlook.
• Negative Sentiment: Melius Research reiterated a “Sell” rating and assigned a $59 price target. Its earnings forecasts are substantially below consensus, including $4.58 EPS for fiscal 2026, $4.69 for fiscal 2027, and $5.91 for fiscal 2028. The firm also projects $1.08 EPS for the third quarter of 2026 and $1.23 for the fourth quarter, reinforcing concerns about near-term profitability.
• Negative Sentiment: The analyst outlook is mixed but leans bearish. Zacks’ minor estimate cuts and Hold rating contrast with Melius Research’s Sell recommendation and below-consensus forecasts. This divergence can pressure the stock because investors may focus on the possibility that housing demand, pricing, or margins will remain weaker than expected.

About Meritage Homes

Meritage Homes Corporation is a residential construction company that designs and builds single-family homes in the United States. The company primarily serves entry-level and first-time move-up buyers, offering homes in a range of floor plans, sizes and price points. Its communities typically feature energy-efficient designs and include standard features intended to improve home performance, comfort and affordability.

Meritage Homes develops communities in selected markets across the South, Southeast and West, including areas of Arizona, California, Colorado, Florida, Georgia, North Carolina, South Carolina, Tennessee and Texas.

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