Meritage Homes Corporation research snapshot
MTH AI stock analysis as of the August 3, 2026 data cutoff reads Meritage Homes as a sun-belt homebuilder trading below book value after a soft spring selling season, with a strong balance sheet and an aggressive capital return program offsetting falling earnings. The stock closed at $70.20 on July 31, 2026, with an after-hours print of $71.20 and a market capitalization near $4.58 billion, re-verified as $70.20 times 65.17 million shares outstanding per the StockAnalysis.com quote and statistics pages. The Q2 2026 report, released July 29, 2026, showed home closing revenue of $1.39 billion down 14% on 11% fewer closings and a 4% lower average sales price, GAAP diluted EPS of $1.37 down 33% from $2.04, and adjusted diluted EPS of $1.42 that beat the $1.38 consensus. Management cut full year 2026 home closing volume and revenue guidance to about 5% below 2025 results, guided Q3 2026 to roughly 18% gross margin and $1.10 to $1.30 in diluted EPS, and kept the 5% to 10% community count growth outlook. Offsetting the softness are $807 million of cash with no revolver borrowings, a 17.1% net debt to capital ratio, $131 million returned to shareholders in Q2 and $292 million in the first half (201% of earnings), buybacks executed at a 16% discount to book, a 12% higher dividend, and a book value per share that rose 5% year over year to about $77.61. At 0.90x book value, 14.63x trailing GAAP EPS, and 12.53x forward earnings, the stock is priced as a cyclical with a balance sheet cushion, and analysts hold a consensus Buy with an average target of $82.38. This page is for information only and is not investment advice.
Current price
$70.20
Market cap
$4.58 billion
AI score
59 / 100
Rating
Cyclical homebuilder below book value with soft demand, a strong balance sheet, and a consensus Buy target
Trend status
Neutral to cautious: price below its 20-day and 50-day moving averages, holding just above its 100-day and 200-day moving averages
Data cutoff (updated monthly)
August 4, 2026
Informational use only. This page is not investment advice.
| Dimension | Conclusion | Confidence |
|---|---|---|
| Business quality | Meritage is a well-run, capital-disciplined sun-belt homebuilder with a quick-close operating model, 340 active communities as of June 30, 2026, and a small Financial Services arm, with TTM revenue near $5.39 billion and TTM net income near $329 million. | Medium |
| Moat | Limited moat. Scale in land purchasing and construction, the GreenSmart energy-efficiency brand, and a move-in-ready quick-close model give modest differentiation, but buyers shop across builders, switching costs are near zero, and the model can be copied. | Low-medium |
| Management | Executive Chairman Steve Hilton and CEO Phillippe Lord run disciplined capital allocation: $230 million of buybacks in H1 2026 at a 16% discount to book, a 12% higher dividend to $0.48, $292 million returned to shareholders (201% of earnings), and a refinanced $980 million revolver. | Medium-high |
| Financial trend | Declining. Q2 2026 home closing revenue fell 14%, GAAP EPS fell 33% to $1.37, adjusted EPS of $1.42 beat consensus, and FY2026 guidance was cut to about 5% below FY2025, with gross margin down 280 bps on lost leverage and higher lot costs. | High |
| Valuation | At 0.90x book value, 14.63x trailing GAAP EPS, 12.53x forward PE, 0.85x sales, and an 8.27% shareholder yield, MTH looks cheap, but the discount reflects cyclical earnings risk and a price below book value of about $77.61. | Medium |
| Technical trend | MTH closed at $70.20 on July 31, 2026, below its 20-day and 50-day moving averages near $73.82 and $73.16, and just above its 100-day and 200-day moving averages near $68.67 and $69.92, with 14-day RSI near 39.76 and 14-day ADX near 18.69. | Medium |
| Risk level | Elevated. Mortgage rates, housing affordability, incentive pressure, higher lot costs, oil and gas and lumber prices, and the risk of a deeper housing downturn are the main threats, mitigated by $807 million of cash, a 17.1% net debt to capital ratio, and an investment grade credit profile. | Medium-high |
| AI confidence | Medium-high for descriptive facts and cross-checked math that matched across StockAnalysis.com, the Q2 2026 earnings release, and the earnings call transcript. Lower for housing cycle timing and forward return estimates. | Medium-high data confidence |
| Investment certainty | Medium-low. The valuation and balance sheet cushion help, but earnings are falling and the housing cycle outlook is uncertain, so the page gives a framework, not a buy or sell instruction. | Medium-low |
MTH AI stock forecast
The MTH AI stock forecast uses scenario ranges around the July 31, 2026 close of $70.20 and the consensus paths for adjusted EPS near $5.03 in FY2026 and $6.30 in FY2027. The framework points to a bearish area near $40 to $55, a base area near $72 to $88, and a bullish area near $95 to $120 over the next three years. These are scenarios, not price commitments.
$95 to $120
More likely if mortgage rates fall, housing demand stabilizes and grows, community count keeps expanding, margins recover toward the 22.5% to 23.5% long-term target, and the stock re-rates from below book toward a 14x to 16x multiple on recovering EPS.
$72 to $88
More likely if FY2026 closes about 5% below FY2025 as guided, adjusted EPS follows the consensus path toward $5.03 this year and $6.30 next year, and MTH holds a 12x to 14x multiple near the analyst average target of $82.38.
$40 to $55
More likely if a housing downturn deepens, mortgage rates stay high, lot cost pressure and incentive use keep compressing margins, EPS falls toward the $3.50 to $4.50 area, and the stock trades at a bigger discount to book value as builders did in prior downturns.
MTH AI technical analysis
MTH AI technical analysis is neutral to cautious as of the August 3, 2026 data cutoff. The stock closed at $70.20 on July 31, 2026, down about 14% over the past 20 sessions into the post-earnings pullback. Price sits below its 20-day and 50-day moving averages near $73.82 and $73.16 and just above its 100-day and 200-day moving averages near $68.67 and $69.92, with 14-day RSI near 39.76 and a weak 14-day ADX near 18.69.
| Level | Value | Why it matters |
|---|---|---|
| Current price | $70.20 | StockAnalysis.com real-time quote at the July 31, 2026 close; market cap math uses 65.17 million shares outstanding. |
| 5-day moving average | $71.84 | Barchart reported the 5-day moving average near $71.84, above the July 31 close, reflecting the short-term pullback. |
| 20-day moving average | $73.82 | Barchart reported the 20-day moving average near $73.82, about 14% above the current price, confirming the recent decline. |
| 50-day moving average | $73.16 | Barchart and StockAnalysis.com both reported the 50-day moving average near $73.16 as of July 31, 2026. |
| 100-day moving average | $68.67 | Barchart reported the 100-day moving average near $68.67, just below the current price and a first support zone. |
| 200-day moving average | $69.92 | Barchart and StockAnalysis.com both reported the 200-day trend line near $69.92, with price holding just above it. |
| Near support | $68.7 to $70 | The 100-day and 200-day moving average cluster near $68.67 to $69.92 is the first support; the $65 area is the next level below. |
| Key support | $58 to $65 | Below the moving average cluster, the $58.03 52-week low and the $65 area are the major downside reference points. |
| Near resistance | $73 to $74 | The 20-day and 50-day moving averages near $73.82 and $73.16 cap the immediate upside until a recovery confirms. |
| Key resistance | $80 to $85.38 | The 52-week high of $85.38 is the main overhead, with the $80 area as an intermediate reference. |
| Momentum | RSI near 40, ADX near 19 | 14-day RSI near 39.76 on StockAnalysis.com and Barchart is below neutral and points to weak momentum; 14-day ADX near 18.69 signals a non-trending tape. |
| Volume | About 0.92 million average shares | Barchart listed 20-day average volume near 916,000 shares and StockAnalysis.com near 916,000 on July 31, 2026, useful for judging the quality of any support test. |
| Volatility | Elevated | Barchart reported 14-day historic volatility near 32.6% and 50-day near 41.1%, so position sizing should account for large swings around housing data, rate moves, and earnings. |
| Invalidation | Close below $68.6 | A decisive close below the 100-day moving average near $68.67 would open the $65 area; a close below $58.03 would be a fresh 52-week low and would turn the chart bearish. |
MTH AI trading strategy
The MTH AI trading strategy is a rules-based research framework for trading and watching a cyclical homebuilder in a softening demand environment. It is not personal advice and should be paired with fresh chart data, filings, mortgage rate news, position sizing, and a defined invalidation level.
Watch for MTH to reclaim its 20-day moving average near $73.82 and the 50-day near $73.16 on rising volume, with the 200-day trend line near $69.92 still below price, before treating the uptrend as restored.
A failed bounce that closes below the 100-day and 200-day cluster near $68.7 to $70, or a break below $58.03, should trigger a stop and review.
If MTH holds the $68.7 to $70 support cluster or tests the $65 area, compare the reaction with Q3 2026 guidance execution, housing cycle indicators such as mortgage rates and absorption, and incentive trends before acting.
Do not average down without a maximum loss rule because cheap builders can stay cheap while earnings fall and land values adjust.
Track Q3 2026 closings, average sales price, home closing gross margin versus the roughly 18% guide, community count growth of 5% to 10%, land spend of $1.7 billion to $2.0 billion, buyback pace, and mortgage rate direction.
Reduce confidence if FY2026 guidance is cut again below 5% below FY2025, margins keep falling on lot cost and incentive pressure, or orders and absorption keep decelerating.
Investment research summary
Meritage buys land, builds move-in-ready single-family homes for entry-level and first move-up buyers across the sun belt, and sells them quickly with a sub-110-day cycle time and a 200% backlog conversion, with a small Financial Services segment for title, escrow, mortgage, and insurance.
The moat is limited. Scale in land purchasing and construction, the GreenSmart energy-efficiency brand, and the quick-close operating model provide modest differentiation, but customers shop across builders and switching costs are near zero.
The thesis fails if housing demand keeps fading, mortgage rates stay elevated, higher lot costs keep compressing margins as they did in Q2 2026, the geographic mix shift to lower-ASP East markets keeps cutting ASP, oil and gas and lumber costs rise, or incentive use erases the direct cost savings.
Executive Chairman Steve Hilton and CEO Phillippe Lord run disciplined capital allocation: $230 million of buybacks in H1 2026 at a 16% discount to book, a 12% higher dividend, $292 million returned to shareholders (201% of earnings), and a refinanced $980 million revolver, while management is transparent about the softer market.
Homebuilding is structurally supported by housing undersupply and Millennial and Gen Z demand, but the industry is in a soft patch with affordability pressure and volatile mortgage rates, and Meritage is gradually shifting part of its mix toward first move-up buyers over time.
At 0.90x book value, 14.63x trailing GAAP EPS, 12.53x forward PE, and an 8.27% shareholder yield, MTH is priced as a cyclical with a balance sheet cushion. The margin of safety depends on whether margins and earnings stabilize near current levels rather than falling further.
Source-backed data
Every metric below includes a source and last verification date.
| Metric | Value | Source | Last verified |
|---|---|---|---|
| MTH price | $70.20 at the July 31, 2026 close, $71.20 after hours | StockAnalysis.com real-time quote | August 3, 2026 |
| Market capitalization | $4.58 billion, computed as $70.20 x 65.17 million shares outstanding | StockAnalysis.com quote and share statistics | August 3, 2026 |
| Q2 2026 adjusted results | Adjusted diluted EPS of $1.42 versus the $1.38 consensus, excluding $3.6 million of real estate inventory impairments and $0.3 million in terminated land deal walk-away charges | Meritage Q2 2026 earnings release and TheFly consensus | July 29, 2026 |
| Q2 2026 GAAP results | Home closing revenue of $1.39 billion down 14%, 3,725 homes closed down 11%, average sales price on closings of $373,000 down 4%, GAAP diluted EPS of $1.37 down 33% from $2.04, net earnings of $91 million down 38% | Meritage Q2 2026 earnings release | July 29, 2026 |
| Q2 2026 gross margin | Home closing gross margin of 18.3%, down 280 bps from 21.1%, with adjusted home closing gross margin of 18.6% | Meritage Q2 2026 earnings release | July 29, 2026 |
| FY2026 guidance | Home closing volume and revenue updated to around 5% below FY2025 results, with home closing revenue able to trend lower if incentives rise | Meritage Q2 2026 earnings release | July 29, 2026 |
| Q3 2026 guidance | Closings of 3,300 to 3,600, home closing revenue of $1.26 billion to $1.35 billion, home closing gross margin around 18%, effective tax rate of 24.5% to 25%, and diluted EPS of $1.10 to $1.30 | Meritage Q2 2026 earnings call | July 30, 2026 |
| First-half 2026 results | Orders down 7%, closings down 12%, home closing revenue down 16% to $2.5 billion, net earnings down 46% to $146 million, adjusted diluted EPS of $2.27 versus $3.79, and adjusted home closing margin of 18.2% down 350 bps | Meritage Q2 2026 earnings release | July 29, 2026 |
| Balance sheet and liquidity | $807 million of cash, no borrowings under the revolving credit facility, net debt to capital of 17.1%, debt to capital of 26.8%, and book value per share up 5% year over year | Meritage Q2 2026 earnings release | July 29, 2026 |
| Community count | 340 active communities as of June 30, 2026, up 9% year over year and down 1% sequentially, with 5% to 10% community count growth maintained for FY2026 | Meritage Q2 2026 earnings release and call | July 30, 2026 |
| Lot position | About 73,200 lots owned or controlled as of June 30, 2026, a 5.2-year supply, with about 1,700 net new lots added in Q2 and about 15,300 lots still in diligence | Meritage Q2 2026 earnings call | July 30, 2026 |
| Capital returns | $131 million returned in Q2 2026 and $292 million in H1 (201% of earnings); H1 buybacks of $230 million for 3,344,160 shares at a 16% discount to book; $284 million remaining under the repurchase program | Meritage Q2 2026 earnings release and call | July 30, 2026 |
| Dividend | Quarterly dividend of $0.48 per share in Q2 2026, up 12% from $0.43, with a $1.92 annualized dividend and a 2.74% yield per StockAnalysis.com | Meritage Q2 2026 earnings release and StockAnalysis.com | July 29, 2026 |
| Revenue and earnings history | FY2025 revenue of $5.86 billion down 8.4%, net income of $453 million down 42.4%, and EPS of $6.35, cross-checked across StockAnalysis.com and SEC filings | StockAnalysis.com financials | August 3, 2026 |
| TTM financials | Revenue of $5.39 billion down 13.3%, net income of $329 million, EPS of $4.80, and gross margin of 18.28% | StockAnalysis.com statistics | August 3, 2026 |
| Valuation ratios | 14.63x trailing PE, 12.53x forward PE, 0.85x PS, 0.90x PB, 11.03x P/FCF, 13.87x EV/EBITDA, and an 8.27% shareholder yield | StockAnalysis.com statistics | August 3, 2026 |
| Balance sheet detail | Cash of $807.27 million, total debt of $1.91 billion, net cash of minus $1.10 billion, equity of $5.06 billion, and book value per share of $77.61 | StockAnalysis.com statistics | August 3, 2026 |
| Cash flow | Operating cash flow of $437.94 million and free cash flow of $414.71 million over TTM, with capital expenditures of $23.24 million | StockAnalysis.com statistics | August 3, 2026 |
| Analyst consensus | Buy with an average target of $82.38 across 9 analysts, low $72, median $84, and high $93, representing about 17% upside from the July 31, 2026 close | StockAnalysis.com forecast | July 31, 2026 |
| Analyst rating mix, July 2026 | 4 Strong Buy, 1 Buy, 4 Hold, 0 Sell, 0 Strong Sell out of 9 analysts | StockAnalysis.com forecast recommendation trends | July 31, 2026 |
| Recent analyst target updates | Goldman Sachs maintains Buy at $93 on July 31, UBS raises to $88 from $86 on July 31, Evercore ISI maintains Hold at $69 on July 30, Truist maintains Buy on July 30, and J.P. Morgan reiterates Hold at $58 from $62 on April 28 | StockAnalysis.com forecast | July 31, 2026 |
| FY2026 and FY2027 consensus | FY2026 revenue estimate of $5.40 billion with adjusted EPS of $5.03, and FY2027 revenue estimate of $5.90 billion with adjusted EPS of $6.30 | StockAnalysis.com forecast | July 31, 2026 |
| Share statistics | 65.17 million shares outstanding, float of 63.46 million, insider ownership of 2.61%, and shares down 5.54% year over year | StockAnalysis.com statistics | August 3, 2026 |
| Short interest | 3.36 million shares short, 5.16% of shares outstanding, 5.30% of float, and 3.34 days to cover | StockAnalysis.com statistics | August 3, 2026 |
| 52-week range | $58.03 to $85.38, with a +3.28% price change over 52 weeks and a beta of 1.36 | StockAnalysis.com statistics | August 3, 2026 |
| Technical snapshot | 5-day SMA near $71.84, 20-day SMA near $73.82, 50-day SMA near $73.16, 100-day SMA near $68.67, 200-day SMA near $69.92, 14-day RSI near 39.76, 14-day ADX near 18.69, 14-day historic volatility near 32.6%, and 20-day average volume near 916,000 | Barchart and StockAnalysis.com technical snapshots | August 3, 2026 |
This MTH AI stock analysis is an informational research tool, not investment advice, a recommendation, or a promise of future return. Forecast ranges are scenarios based on available filings, quote snapshots, and third-party data as of the stated cutoff date. They may be wrong, incomplete, or outdated after new earnings, housing data, mortgage rate moves, or macro conditions.
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