Wolfe Research Predicts Reduced Earnings for Meritage Homes

Key Points

• Wolfe Research cut its FY2026 EPS estimate for Meritage Homes from $5.94 to $5.49 and now forecasts FY2027 EPS of $7.36, versus a current-market consensus full-year estimate of $9.44, signaling weaker near-term profit expectations.
• In the most recent quarter Meritage reported EPS of $1.67 (above the $1.55 consensus) but revenue fell 11.9% year‑over‑year to $1.44 billion and missed estimates, indicating softer sales despite an EPS beat.
• The company raised its quarterly dividend to $0.48 (annualized $1.92, ~2.9% yield), while insiders have sold shares (47,622 over 90 days) even as institutional investors, including Goldman Sachs, materially increased holdings.

Meritage Homes Corporation (NYSE:MTH - Free Report) - Stock analysts at Wolfe Research dropped their FY2026 earnings per share estimates for shares of Meritage Homes in a research note issued on Thursday, April 9th. Wolfe Research analyst T. Allinson now forecasts that the construction company will post earnings of $5.49 per share for the year, down from their previous estimate of $5.94. The consensus estimate for Meritage Homes' current full-year earnings is $9.44 per share. Wolfe Research also issued estimates for Meritage Homes' FY2027 earnings at $7.36 EPS.

Meritage Homes (NYSE:MTH - Get Free Report) last issued its quarterly earnings results on Wednesday, January 28th. The construction company reported $1.67 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.55 by $0.12. Meritage Homes had a net margin of 7.73% and a return on equity of 9.28%. The firm had revenue of $1.44 billion for the quarter, compared to the consensus estimate of $1.51 billion. During the same quarter in the previous year, the company earned $4.72 EPS. The company's revenue for the quarter was down 11.9% on a year-over-year basis.

Other research analysts also recently issued research reports about the stock. The Goldman Sachs Group reiterated a "buy" rating and set a $90.00 target price on shares of Meritage Homes in a research report on Tuesday, January 13th. Citizens Jmp began coverage on shares of Meritage Homes in a research report on Wednesday, January 7th. They set a "market outperform" rating and a $90.00 target price on the stock. Wall Street Zen downgraded Meritage Homes from a "hold" rating to a "sell" rating in a research note on Saturday. Weiss Ratings reaffirmed a "hold (c)" rating on shares of Meritage Homes in a research note on Monday, December 29th. Finally, Citigroup began coverage on Meritage Homes in a research note on Wednesday, January 7th. They set an "outperform" rating on the stock. Two research analysts have rated the stock with a Strong Buy rating, four have issued a Buy rating, six have issued a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat, the company currently has a consensus rating of "Moderate Buy" and an average price target of $84.33.

Meritage Homes Stock Down 0.0%

Meritage Homes stock opened at $66.53 on Monday. The company has a quick ratio of 2.10, a current ratio of 2.10 and a debt-to-equity ratio of 0.35. Meritage Homes has a 12-month low of $58.03 and a 12-month high of $84.74. The firm's fifty day moving average is $69.12 and its 200 day moving average is $69.73. The company has a market capitalization of $4.44 billion, a PE ratio of 10.53, a PEG ratio of 1.19 and a beta of 1.50.

Meritage Homes Increases Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Tuesday, March 31st. Shareholders of record on Tuesday, March 17th were issued a dividend of $0.48 per share. The ex-dividend date was Tuesday, March 17th. This is a positive change from Meritage Homes's previous quarterly dividend of $0.43. This represents a $1.92 annualized dividend and a yield of 2.9%. Meritage Homes's dividend payout ratio is currently 30.38%.

Insiders Place Their Bets

In other Meritage Homes news, CFO Hilla Sferruzza sold 10,928 shares of the company's stock in a transaction on Monday, February 23rd. The shares were sold at an average price of $76.35, for a total transaction of $834,352.80. Following the transaction, the chief financial officer owned 124,961 shares in the company, valued at approximately $9,540,772.35. This represents a 8.04% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is accessible through this hyperlink. Also, EVP Javier Feliciano sold 3,580 shares of the company's stock in a transaction on Monday, February 23rd. The stock was sold at an average price of $76.24, for a total transaction of $272,939.20. Following the transaction, the executive vice president owned 44,935 shares in the company, valued at approximately $3,425,844.40. The trade was a 7.38% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders have sold 47,622 shares of company stock worth $3,640,273. Insiders own 2.20% of the company's stock.

Institutional Trading of Meritage Homes

Institutional investors and hedge funds have recently modified their holdings of the stock. Royal Bank of Canada raised its holdings in shares of Meritage Homes by 134.3% in the first quarter. Royal Bank of Canada now owns 38,658 shares of the construction company's stock valued at $2,740,000 after purchasing an additional 22,162 shares during the last quarter. AQR Capital Management LLC raised its holdings in shares of Meritage Homes by 51.7% in the first quarter. AQR Capital Management LLC now owns 12,937 shares of the construction company's stock valued at $917,000 after purchasing an additional 4,407 shares during the last quarter. Goldman Sachs Group Inc. raised its holdings in shares of Meritage Homes by 58.6% in the first quarter. Goldman Sachs Group Inc. now owns 1,058,850 shares of the construction company's stock valued at $75,051,000 after purchasing an additional 391,297 shares during the last quarter. Empowered Funds LLC raised its holdings in shares of Meritage Homes by 111.0% in the first quarter. Empowered Funds LLC now owns 32,971 shares of the construction company's stock valued at $2,337,000 after purchasing an additional 17,343 shares during the last quarter. Finally, UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC raised its holdings in shares of Meritage Homes by 102.8% in the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 319,150 shares of the construction company's stock valued at $22,621,000 after purchasing an additional 161,806 shares during the last quarter. 98.44% of the stock is owned by hedge funds and other institutional investors.

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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