Meritage Homes Corp

Latest Results (25.12.2024):

Home Closings and Revenue

In the third quarter of 2024, Meritage Homes Corp reported an 8% year-over-year increase in home closings, totaling 3,942 units. However, home closing revenue slightly decreased by 2% to $1.6 billion compared to the same period in 2023. This decline in revenue was attributed to a 9% decrease in the average sales price of closings, which was influenced by product and geographic mix changes.

Net Earnings and EPS

Meritage Homes Corp's net earnings for the third quarter of 2024 were $195.966 million, representing a 12% decrease from the $221.760 million reported in the third quarter of 2023. The diluted earnings per share (EPS) also saw a decline, dropping 11% to $5.34 from $5.98 in the previous year. This decrease was primarily due to lower home closing revenue and gross profit margins.

Orders and Backlog

During the third quarter of 2024, Meritage Homes Corp recorded 3,512 home orders, marking a slight 1% increase from the previous year. The ending backlog, however, saw a significant reduction, with units decreasing by 37% to 2,284 and the backlog value dropping by 40% to $931.656 million. The average sales price for the backlog also decreased by 6% to $408,000.

Dividends and Share Repurchases

In the third quarter of 2024, Meritage Homes Corp declared and paid quarterly cash dividends of $0.75 per share, totaling $27.1 million, a substantial increase from the $0.27 per share and $9.8 million paid in the third quarter of 2023. Additionally, the company repurchased 151,220 shares of stock, representing 0.4% of the shares outstanding at the beginning of the quarter.

Outlook and Strategy

Meritage Homes Corp's management remains optimistic about future growth, citing expectations of lower mortgage rates and favorable demographics as positive factors for homebuyer demand. The company's strategy focuses on affordable, quick-turning move-in ready homes, which contributed to a record backlog conversion rate of 145% in the third quarter of 2024. The company aims to continue growing its market share despite the volatile mortgage rate environment.