# Meritage (MTH.US)

Canonical: https://gigainvestors.com/s/MTH

Analysis as of: 2026-10-16T07:30:27.845Z. Financial observations: FY1996–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $60.28 per share; close as of 2026-10-15.

Estimated value: low $123.13 per share, central $138.62 per share, high $159.26 per share. Buy at or below the central value $138.62 per share. Valuation as of 2026-10-16T07:30:27.845Z; scenarios are not confidence intervals.

Expected annual return: 21.8% at the stated quote. About 21.8% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 3 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 0

- Operating margin variation: 0.40×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.08×

- FY2018: 0.08×

- FY2019: 0.09×

- FY2020: 0.12×

- FY2021: 0.19×

- FY2022: 0.20×

- FY2023: 0.21×

- FY2024: 0.15×

- FY2025: 0.09×

- LTM to Jun 2026: 0.08×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 11.3%

- ROIC, second-lowest year: 6.0%

- Typical minus recent gross margin: 2.1 pp

- Typical gross margin (annual median): 21.0%

- Recent gross margin (lower of latest and 3-year median): 18.9%

- Years with nonpositive capital: 0

- Capital spending / revenue: 0.5%

- ROIC including acquisitions, ten-year median: 11.1%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 5.7%

- FY2018: 8.3%

- FY2019: 9.7%

- FY2020: 16.8%

- FY2021: 20.9%

- FY2022: 23.4%

- FY2023: 26.9%

- FY2024: 12.8%

- FY2025: 6.6%

- LTM to Jun 2026: 6.0%

### economics: fail

- incremental invested capital return below threshold

- working capital as a share of revenue rose more than 10pp and ends positive

- Owner earnings / net income, 5-yr: 1.00×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $3.7B

- Net income, five-year total: $3.7B

- Return on incremental invested capital: 6.7%

- Working capital / revenue, annual change: 1.8 pp

- Working capital / revenue, change between three-year averages: 11.8 pp

- Working capital / revenue, final three-year average: 90.5%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 1.00×

- FY2023: 0.98×

- FY2024: 1.00×

- FY2025: 1.00×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 6.2% vs 12.8%

- Per-share earnings: 1.70 to 9.96 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -1.7%

- Ordinary dilution, 5-year annual growth: -1.5%

- Market cap gain: $3.0B

- Cumulative retained earnings: $4.3B

- Diluted shares, 10-year annual growth: -1.7%

- Diluted shares, 5-year annual growth: -1.5%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 24.8%

- Per-share value change: $8.27

- Per-share value, starting three-year median: $1.70

- Per-share value, ending three-year median: $9.96

- Buybacks concentrated in cheaper years (correlation): 0.38

- Average buyback yield: 3.1%

- Buyback history: 8 years

- Debt-funded buybacks: Yes

- Acquisition spending: $63M

- Cumulative net income, 10 years: $4.9B

- ROIC, first three-year median: 6.2%

- ROIC, last three-year median: 12.8%

Chart: Earnings per share; fiscal year observations.

- FY2016: $1.76

- FY2017: $1.70

- FY2018: $2.79

- FY2019: $3.21

- FY2020: $5.50

- FY2021: $9.64

- FY2022: $13.37

- FY2023: $9.96

- FY2024: $10.72

- FY2025: $6.35

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: 4.4%

- Receivables to sales index (DSRI): 1.31×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 16.6%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.26×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.01×

Chart: Sloan accruals; fiscal year observations.

- FY2016: 8.8%

- FY2017: 7.1%

- FY2018: -1.0%

- FY2019: -2.9%

- FY2020: -2.8%

- FY2021: 18.5%

- FY2022: 10.2%

- FY2023: 6.0%

- FY2024: 14.2%

- FY2025: 4.4%

## Holders

- [Edgar Wachenheim](https://gigainvestors.com/GA): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 41% since Sep 2024 · "MTH Q4 Deep Dive: Demand Weakness and Margin Pressures Shape Outlook for 2026" (finance.yahoo.com, Jan 2026) · sales -6.9%

Story as of 2026-10-16T09:59:13.397Z; price observation 2026-10-15.

Price needs cash profits to shrink 11.1% a year for ten years

- 2025-10-30: MTH Q3 Deep Dive: Incentives and Market Uncertainty Weigh on Margins and Outlook ([finance.yahoo.com](https://finance.yahoo.com/news/mth-q3-deep-dive-incentives-001551739.html))

- 2026-01-29: MTH Q4 Deep Dive: Demand Weakness and Margin Pressures Shape Outlook for 2026 ([finance.yahoo.com](https://finance.yahoo.com/news/mth-q4-deep-dive-demand-202055230.html))

- 2026-04-23: Meritage projects Q2 2026 closings of 3,650-3,900 amid higher-than-anticipated incentives ([seekingalpha.com](https://seekingalpha.com/news/4579134-meritage-projects-q2-2026-closings-of-3650minus-3900-amid-higher-than-anticipated-incentives?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-07-29: Meritage Homes (NYSE:MTH) Reports Sales Below Analyst Estimates In Q2 CY2026 Earnings ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/meritage-homes-nyse-mth-reports-205031711.html))

- 2026-08-09: Meritage Homes (MTH) Could Be 7% Undervalued Following Softer Q2 And Lower Outlook ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/meritage-homes-mth-could-7-071717399.html))

### Sales · FY2025–2026

sales -6.9%; source https://www.sec.gov/Archives/edgar/data/833079/000083307926000010/mth-20251231.htm; observed 2026-02-13.

- FY2017: $3.2B 

- FY2018: $3.5B 

- FY2019: $3.7B 

- FY2020: $4.5B 

- FY2021: $5.1B 

- FY2022: $6.3B 

- FY2023: $6.1B 

- FY2024: $6.4B 

- FY2025: $5.9B 

- FY2026: $5.5B 

### Gross margin · FY2026

gross margin 18.9%; source https://www.sec.gov/Archives/edgar/data/833079/000083307926000010/mth-20251231.htm; observed 2026-02-13.

- FY2017: 18.4% 

- FY2018: 18.7% 

- FY2019: 19.3% 

- FY2020: 22.2% 

- FY2021: 28.0% 

- FY2022: 28.7% 

- FY2023: 24.6% 

- FY2024: 25.0% 

- FY2025: 19.7% 

- FY2026: 18.9% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in residential construction; annual sales are USD 5.9 billion.

- Source: https://www.sec.gov/Archives/edgar/data/833079/000083307926000010/mth-20251231.htm (filed 2026-02-13); FY2025: revenue 5857637000; grossProfit 1153644000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); MTH.US: Meritage Homes Corporation, together with its subsidiaries, designs and builds single-family attached and detached homes in the United States. The company operates through two segments: Homebuilding and Financial Services. It acquires and develops land; and constructs, markets, and sells homes for entry-level and first move-up buyers in Arizona, California, Colorado, Utah, Texas, Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, and Tennessee. The company also provides title and escrow, mortgage, insurance, title insurance, and closing/settlement services to its homebuyers. Meritage Homes Corporation was founded in 1985 and is based in Scottsdale, Arizona.

### Why customers stay

Margins ranged from 19.7% to 25% during 2023–25; it earns 11.3% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2023: grossProfit / revenue = 24.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2024: grossProfit / revenue = 25%.

- Source: https://www.sec.gov/Archives/edgar/data/833079/000083307926000010/mth-20251231.htm (filed 2026-02-13); FY2025: grossProfit / revenue = 19.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); 10-year return on capital observations [[2017,0.05697515672585646],[2018,0.08334201949179237],[2019,0.09695334187747297],[2020,0.16796826455216401],[2021,0.20942691613144718],[2022,0.23415656088860182],[2023,0.26915257440413765],[2024,0.12845139370537562],[2025,0.06635234707406085],[2026,0.06025216539791303]]; median 0.11270236779142428. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Reinvests 7.2% of cash earnings; earns 6.7% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2016: growth capex 684000; upkeep 15978000; cash acquisitions 0; owner earnings 149541000. Growth capex plus acquisitions / owner earnings = 0.004573996429072963.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2017: growth capex 1392000; upkeep 16704000; owner earnings 143255000. Growth capex / owner earnings = 0.009716938326759973.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2018: growth capex 3727351.186216075; upkeep 29687648.813783925; owner earnings 224610351.1862161. Growth capex / owner earnings = 0.016594743592764638.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2019: growth capex 0; upkeep 24385000; owner earnings 253201000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2020: growth capex 0; upkeep 19932000; owner earnings 434595000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2021: growth capex 0; upkeep 25664000; owner earnings 738025000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2022: growth capex 2223000; upkeep 24748000; cash acquisitions 5796000; owner earnings 992192000. Growth capex plus acquisitions / owner earnings = 0.008082105076436818.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2023: growth capex 0; upkeep 38192000; cash acquisitions 5991000; owner earnings 725890000. Growth capex plus acquisitions / owner earnings = 0.008253316618220392.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2024: growth capex 2343392.5259709805; upkeep 26314607.47402902; cash acquisitions 18545000; owner earnings 785830392.5259709. Growth capex plus acquisitions / owner earnings = 0.026581298871410905.

- Source: https://www.sec.gov/Archives/edgar/data/833079/000083307926000010/mth-20251231.htm (filed 2026-02-13); FY2025: growth capex 0; upkeep 25722000; cash acquisitions 32728000; owner earnings 452576000. Growth capex plus acquisitions / owner earnings = 0.07231492611185746.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); Incremental return on capital 0.06695539877518396, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); Dividend observations: [[2016,0],[2017,0],[2018,0],[2019,0],[2020,0],[2021,0],[2022,0],[2023,39534000],[2024,108590000],[2025,121072000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/833079/000083307926000010/mth-20251231.htm (filed 2026-02-13); FY2025: cash repurchases 294999000 USD.

### Are managers owners

Insiders own 2.6% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); MTH.US SharesStats.PercentInsiders = 2.595 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits shrink 11.1% yearly over ten years; actual growth was 15.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); Ten-year compound average after fade. Initial solved rate -0.168091965149963. Price 60.28; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 1.5266340954368656 → FY2025 6.343219151202557. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $15.48 per share

- 2016-11: $18.03 per share

- 2016-12: $17.40 per share

- 2017-01: $18.38 per share

- 2017-02: $17.78 per share

- 2017-03: $18.40 per share

- 2017-04: $19.48 per share

- 2017-05: $19.95 per share

- 2017-06: $21.10 per share

- 2017-07: $20.38 per share

- 2017-08: $20.35 per share

- 2017-09: $22.20 per share

- 2017-10: $24.35 per share

- 2017-11: $27.48 per share

- 2017-12: $25.60 per share

- 2018-01: $23.73 per share

- 2018-02: $21.20 per share

- 2018-03: $22.63 per share

- 2018-04: $22.25 per share

- 2018-05: $22.63 per share

- 2018-06: $21.98 per share

- 2018-07: $21.58 per share

- 2018-08: $21.58 per share

- 2018-09: $19.95 per share

- 2018-10: $18.63 per share

- 2018-11: $19.13 per share

- 2018-12: $18.36 per share

- 2019-01: $22.54 per share

- 2019-02: $21.93 per share

- 2019-03: $22.36 per share

- 2019-04: $25.58 per share

- 2019-05: $25.05 per share

- 2019-06: $25.67 per share

- 2019-07: $31.41 per share

- 2019-08: $32.67 per share

- 2019-09: $35.18 per share

- 2019-10: $36.05 per share

- 2019-11: $33.27 per share

- 2019-12: $30.56 per share

- 2020-01: $35.48 per share

- 2020-02: $31.73 per share

- 2020-03: $18.26 per share

- 2020-04: $26.28 per share

- 2020-05: $34.75 per share

- 2020-06: $38.06 per share

- 2020-07: $49.59 per share

- 2020-08: $48.02 per share

- 2020-09: $55.20 per share

- 2020-10: $43.55 per share

- 2020-11: $45.08 per share

- 2020-12: $41.41 per share

- 2021-01: $40.13 per share

- 2021-02: $42.16 per share

- 2021-03: $45.96 per share

- 2021-04: $53.20 per share

- 2021-05: $53.84 per share

- 2021-06: $47.04 per share

- 2021-07: $54.29 per share

- 2021-08: $55.77 per share

- 2021-09: $48.50 per share

- 2021-10: $54.36 per share

- 2021-11: $56.43 per share

- 2021-12: $61.03 per share

- 2022-01: $51.02 per share

- 2022-02: $49.29 per share

- 2022-03: $39.62 per share

- 2022-04: $41.28 per share

- 2022-05: $42.66 per share

- 2022-06: $36.25 per share

- 2022-07: $44.15 per share

- 2022-08: $39.18 per share

- 2022-09: $35.14 per share

- 2022-10: $38.08 per share

- 2022-11: $43.21 per share

- 2022-12: $46.10 per share

- 2023-01: $53.85 per share

- 2023-02: $54.62 per share

- 2023-03: $58.38 per share

- 2023-04: $64.03 per share

- 2023-05: $57.67 per share

- 2023-06: $71.14 per share

- 2023-07: $74.48 per share

- 2023-08: $69.52 per share

- 2023-09: $61.20 per share

- 2023-10: $57.01 per share

- 2023-11: $70.65 per share

- 2023-12: $87.10 per share

- 2024-01: $82.81 per share

- 2024-02: $78.83 per share

- 2024-03: $87.73 per share

- 2024-04: $82.87 per share

- 2024-05: $88.18 per share

- 2024-06: $80.93 per share

- 2024-07: $101.44 per share

- 2024-08: $99.04 per share

- 2024-09: $102.54 per share

- 2024-10: $90.60 per share

- 2024-11: $95.54 per share

- 2024-12: $76.91 per share

- 2025-01: $77.87 per share

- 2025-02: $72.47 per share

- 2025-03: $70.88 per share

- 2025-04: $68.14 per share

- 2025-05: $63.61 per share

- 2025-06: $66.97 per share

- 2025-07: $67.34 per share

- 2025-08: $77.69 per share

- 2025-09: $72.43 per share

- 2025-10: $67.56 per share

- 2025-11: $73.08 per share

- 2025-12: $65.80 per share

- 2026-01: $69.51 per share

- 2026-02: $75.42 per share

- 2026-03: $61.84 per share

- 2026-04: $67.34 per share

- 2026-05: $65.24 per share

- 2026-06: $83.85 per share

- 2026-07: $70.20 per share

- 2026-08: $69.43 per share

- 2026-09: $62.85 per share

- 2026-10: $60.28 per share

## Annual estimated value (USD per share)

- FY2016: low $26.31 per share, central $29.82 per share, high $34.49 per share

- FY2017: low $22.19 per share, central $25.07 per share, high $28.92 per share

- FY2018: low $30.32 per share, central $39.26 per share, high $45.45 per share

- FY2019: low $35.15 per share, central $48.86 per share, high $56.84 per share

- FY2020: low $59.13 per share, central $80.81 per share, high $93.44 per share

- FY2021: low $69.86 per share, central $96.91 per share, high $112.66 per share

- FY2022: low $121.22 per share, central $168.92 per share, high $196.69 per share

- FY2023: low $143.89 per share, central $200.93 per share, high $234.14 per share

- FY2024: low $152.83 per share, central $215.26 per share, high $251.61 per share

- FY2025: low $119.49 per share, central $134.70 per share, high $154.94 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/833079/000083307926000010/mth-20251231.htm); period 2025-12-31, filed 2026-02-13.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.