Home Builders Stocks Q4 Teardown: Meritage Homes (NYSE:MTH) Vs The Rest

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Meritage Homes (NYSE:MTH) and the best and worst performers in the home builders industry.

Traditionally, homebuilders have built competitive advantages with economies of scale that lead to advantaged purchasing and brand recognition among consumers. Aesthetic trends have always been important in the space, but more recently, energy efficiency and conservation are driving innovation. However, these companies are still at the whim of the macro, specifically interest rates that heavily impact new and existing home sales. In fact, homebuilders are one of the most cyclical subsectors within industrials.

The 13 home builders stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 3.6%.

While some home builders stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.5% since the latest earnings results.

Weakest Q4: Meritage Homes (NYSE:MTH)

Originally founded in 1985 in Arizona as Monterey Homes, Meritage Homes (NYSE:MTH) is a homebuilder specializing in designing and constructing energy-efficient and single-family homes in the US.

Meritage Homes reported revenues of $1.44 billion, down 11.5% year on year. This print fell short of analysts’ expectations by 3.8%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ revenue estimates and a significant miss of analysts’ adjusted operating income estimates.

Meritage Homes delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 4.2% since reporting and currently trades at $72.08.

Read our full report on Meritage Homes here, it’s free.

Best Q4: Taylor Morrison Home (NYSE:TMHC)

Named “America’s Most Trusted Home Builder” in 2019, Taylor Morrison Home (NYSE:TMHC) builds single family homes and communities across the United States.

Taylor Morrison Home reported revenues of $2.1 billion, down 10.9% year on year, outperforming analysts’ expectations by 7.2%. The business had a stunning quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 4.2% since reporting. It currently trades at $63.60.

Is now the time to buy Taylor Morrison Home? Access our full analysis of the earnings results here, it’s free.

LGI Homes (NASDAQ:LGIH)

Based in Texas, LGI Homes (NASDAQ:LGIH) is a homebuilding company specializing in constructing affordable, entry-level single-family homes in desirable communities across the United States.

LGI Homes reported revenues of $474 million, down 15% year on year, falling short of analysts’ expectations by 0.8%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.

As expected, the stock is down 19.2% since the results and currently trades at $49.13.

Read our full analysis of LGI Homes’s results here.

Toll Brothers (NYSE:TOL)

Started by two brothers who started by building and selling just one home in Pennsylvania, today Toll Brothers (NYSE:TOL) is a luxury homebuilder across the United States.

Toll Brothers reported revenues of $2.15 billion, up 15.4% year on year. This print topped analysts’ expectations by 15.7%. Taking a step back, it was a mixed quarter as it also recorded an impressive beat of analysts’ revenue estimates but a significant miss of analysts’ EBITDA estimates.

Toll Brothers scored the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is down 6.2% since reporting and currently trades at $153.70.

Read our full, actionable report on Toll Brothers here, it’s free.

KB Home (NYSE:KBH)

The first homebuilder to be listed on the NYSE, KB Home (NYSE:KB) is a homebuilding company targeting the first-time home buyer and move-up buyer markets.

KB Home reported revenues of $1.69 billion, down 15.3% year on year. This number beat analysts’ expectations by 2.3%. Aside from that, it was a slower quarter as it logged a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.

The stock is down 3.5% since reporting and currently trades at $60.55.

Read our full, actionable report on KB Home here, it’s free.

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