Meritage Homes (NYSE:MTH) Shares Gap Up - Here's What Happened

Key Points

• Meritage Homes shares jumped after opening well above the prior close, with the stock gapping up from $65.24 to $69.47 and later trading around $69.01, roughly a 4.4% gain.
• Analyst sentiment remains mixed: recent rating changes included downgrades from Wall Street Zen and Zacks, while Truist kept a buy rating; overall, the stock’s consensus rating is Hold with an average price target of $79.89.
• The company recently reported weaker-than-expected quarterly results, missing EPS and revenue estimates as revenue fell 17.5% year over year, though Meritage also announced a quarterly dividend of $0.48 per share payable June 30.

Shares of Meritage Homes Corporation (NYSE:MTH - Get Free Report) gapped up prior to trading on Monday . The stock had previously closed at $65.24, but opened at $69.47. Meritage Homes shares last traded at $69.0050, with a volume of 150,262 shares traded.

Analysts Set New Price Targets

A number of research firms recently weighed in on MTH. Wall Street Zen raised shares of Meritage Homes from a "sell" rating to a "hold" rating in a research report on Saturday, May 16th. Keefe, Bruyette & Woods reduced their price objective on shares of Meritage Homes from $78.00 to $76.00 and set a "market perform" rating for the company in a research note on Tuesday, February 3rd. Bank of America decreased their price objective on Meritage Homes from $74.00 to $72.00 and set a "neutral" rating for the company in a report on Monday, April 20th. Truist Financial set a $80.00 target price on Meritage Homes and gave the stock a "buy" rating in a report on Thursday, April 16th. Finally, Zacks Research cut Meritage Homes from a "hold" rating to a "strong sell" rating in a research report on Tuesday, May 12th. One research analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating, six have issued a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat, the stock has a consensus rating of "Hold" and an average price target of $79.89.

Meritage Homes Stock Up 4.4%

The company has a current ratio of 1.96, a quick ratio of 1.96 and a debt-to-equity ratio of 0.36. The firm's 50 day moving average price is $64.24 and its two-hundred day moving average price is $68.74. The company has a market capitalization of $4.54 billion, a price-to-earnings ratio of 12.50, a price-to-earnings-growth ratio of 2.88 and a beta of 1.39.

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

Meritage Homes Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Tuesday, June 30th. Stockholders of record on Tuesday, June 16th will be paid a dividend of $0.48 per share. This represents a $1.92 annualized dividend and a dividend yield of 2.8%. The ex-dividend date is Tuesday, June 16th. Meritage Homes's payout ratio is currently 35.23%.

Insider Buying and Selling at Meritage Homes

In related news, CAO Alison Sasser sold 1,273 shares of the business's stock in a transaction that occurred on Tuesday, May 12th. The stock was sold at an average price of $62.11, for a total transaction of $79,066.03. Following the transaction, the chief accounting officer directly owned 7,634 shares of the company's stock, valued at approximately $474,147.74. The trade was a 14.29% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Insiders own 2.50% of the company's stock.

Hedge Funds Weigh In On Meritage Homes

Several institutional investors and hedge funds have recently modified their holdings of the stock. Salomon & Ludwin LLC lifted its stake in shares of Meritage Homes by 63.9% during 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. Essential Partners LLC raised its holdings in Meritage Homes by 163.8% in the 1st quarter. Essential Partners LLC now owns 401 shares of the construction company's stock valued at $25,000 after acquiring an additional 249 shares during the period. Larson Financial Group LLC lifted its position in Meritage Homes by 265.5% during the third quarter. Larson Financial Group LLC now owns 402 shares of the construction company's stock worth $29,000 after acquiring an additional 292 shares during the last quarter. Brown Lisle Cummings Inc. acquired a new stake in Meritage Homes during the fourth quarter worth approximately $39,000. Finally, EverSource Wealth Advisors LLC boosted its holdings in shares of Meritage Homes by 194.9% during the second quarter. EverSource Wealth Advisors LLC now owns 699 shares of the construction company's stock worth $47,000 after acquiring an additional 462 shares during the period. 98.44% of the stock is currently owned by institutional investors and hedge funds.

Meritage Homes Company Profile

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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