Meritage Homes (NYSE:MTH) Downgraded by Zacks Research to "Strong Sell"

Key Points

• Zacks Research downgraded Meritage Homes from hold to strong sell, adding to a wave of softer analyst sentiment around the stock.
• The latest earnings report was weak: Meritage posted EPS of $0.86 versus the expected $0.98, and revenue of $1.12 billion missed estimates of $1.55 billion while falling 17.5% year over year.
• Meritage Homes shares were trading at $61.51, near their 52-week low of $58.03 and below both the 50-day and 200-day moving averages, with analysts currently showing a Hold consensus and an average price target of $79.89.

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

A number of other equities analysts have also recently commented on the company. Weiss Ratings cut Meritage Homes from a "hold (c)" rating to a "hold (c-)" rating in a research note on Tuesday. Wall Street Zen cut Meritage Homes from a "hold" rating to a "sell" rating in a research note on Saturday, April 11th. JPMorgan Chase & Co. decreased their price target on Meritage Homes from $62.00 to $58.00 and set a "neutral" rating on the stock in a research note on Tuesday, April 28th. Truist Financial set a $80.00 price target on Meritage Homes and gave the stock a "buy" rating in a research note on Thursday, April 16th. Finally, The Goldman Sachs Group reaffirmed a "buy" rating and issued a $90.00 price target on shares of Meritage Homes in a research note on Tuesday, January 13th. One equities research analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating, six have assigned a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat.com, the stock currently has a consensus rating of "Hold" and an average price target of $79.89.

Meritage Homes Price Performance

Shares of Meritage Homes stock opened at $61.51 on Tuesday. The company has a debt-to-equity ratio of 0.36, a current ratio of 1.96 and a quick ratio of 1.96. The business's 50 day simple moving average is $64.91 and its two-hundred day simple moving average is $69.10. The stock has a market capitalization of $4.10 billion, a P/E ratio of 11.29, a price-to-earnings-growth ratio of 2.76 and a beta of 1.43. Meritage Homes has a one year low of $58.03 and a one year high of $84.74.

Meritage Homes (NYSE:MTH - Get Free Report) last announced its quarterly earnings results on Wednesday, April 22nd. The construction company reported $0.86 EPS for the quarter, missing analysts' consensus estimates of $0.98 by ($0.12). The company had revenue of $1.12 billion during the quarter, compared to analysts' expectations of $1.55 billion. Meritage Homes had a return on equity of 8.08% and a net margin of 6.86%.Meritage Homes's revenue for the quarter was down 17.5% on a year-over-year basis. During the same period last year, the firm earned $1.69 earnings per share. Analysts forecast that Meritage Homes will post 5.01 EPS for the current year.

Insiders Place Their Bets

In other news, EVP Javier Feliciano sold 3,580 shares of Meritage Homes stock in a transaction that occurred on Monday, February 23rd. The stock was sold at an average price of $76.24, for a total value of $272,939.20. Following the sale, the executive vice president directly owned 44,935 shares in the company, valued at approximately $3,425,844.40. This trade represents a 7.38% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CAO Alison Sasser sold 1,273 shares of Meritage Homes stock in a transaction that occurred on Tuesday, May 12th. The stock was sold at an average price of $62.11, for a total value of $79,066.03. Following the completion of the sale, the chief accounting officer owned 7,634 shares in the company, valued at approximately $474,147.74. This represents a 14.29% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 48,895 shares of company stock valued at $3,719,339 in the last 90 days. 2.50% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Meritage Homes

A number of large investors have recently made changes to their positions in MTH. Salomon & Ludwin LLC grew its position in shares of Meritage Homes by 63.9% in the 4th quarter. Salomon & Ludwin LLC now owns 372 shares of the construction company's stock worth $25,000 after buying an additional 145 shares during the last quarter. Larson Financial Group LLC lifted its stake in shares of Meritage Homes by 265.5% in the 3rd quarter. Larson Financial Group LLC now owns 402 shares of the construction company's stock valued at $29,000 after purchasing an additional 292 shares during the period. Brown Lisle Cummings Inc. purchased a new position in shares of Meritage Homes in the 4th quarter valued at approximately $39,000. EverSource Wealth Advisors LLC lifted its stake in shares of Meritage Homes by 194.9% in the 2nd quarter. EverSource Wealth Advisors LLC now owns 699 shares of the construction company's stock valued at $47,000 after purchasing an additional 462 shares during the period. Finally, Assetmark Inc. lifted its stake in shares of Meritage Homes by 43.9% in the 1st quarter. Assetmark Inc. now owns 774 shares of the construction company's stock valued at $48,000 after purchasing an additional 236 shares during the period. 98.44% of the stock is currently owned by institutional investors.

About Meritage Homes

Meritage Homes Corporation is a national homebuilder and residential developer headquartered in Scottsdale, Arizona. Founded in 1985 as Winchester Homes and later rebranded to Meritage Homes, the company specializes in designing, constructing and selling single‐family detached and attached homes. With a focus on energy efficiency and sustainable building practices, Meritage Homes markets its properties under the GreenSmart program, which integrates high‐performance features aimed at reducing long‐term energy and water consumption for homebuyers.

The company's core activities encompass land acquisition, residential community planning, home design, construction management and real estate sales.

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