MERITAGE HOMES Reports Fourth Quarter Fiscal Year 2022 Earnings Results on February 1, 2023.

Earnings Overview

MERITAGE HOMES ($NYSE:MTH) reported their financial results for the fourth quarter of fiscal year 2022, ending December 31, 2022, on February 1, 2023. Total revenue rose by 10.5% year-over-year to USD 262.4 million while net income surged 32.8% year-over-year to USD 2000.7 million.

Transcripts Simplified

In the fourth quarter of 2022, Home closing revenue grew 32% year-over-year to $2.0 billion, combining 29% greater home closing volume and 3% higher ASPs when compared to prior year. Gross margin for the quarter was 25.2%, which was a 380 bps deterioration from the prior year due to greater incentives, higher direct costs, and several nonrecurring items. Excluding these nonrecurring items, adjusted gross margin was 25.7% compared to 29.2% in Q4 of 2021. SG& A as a percentage of home closing revenue was 8.4% for the quarter, which was a slight improvement over 8.5% in the prior year. We’re encouraged to see some incremental interest in January and continue to believe in the viability of this channel due to the historical countercyclical strength of rental market and higher interest rate environment. We expect that price concessions elevated discounts and a continuation of financing incentives for rate locks and buydown will negatively impact gross margins in 2023.

However, with our sales ASP down 10% to $389,000 this quarter when compared to last year, we’ve already taken material pricing action and are starting to make some headway to reduce direct costs and improve cycle time.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Meritage Homes. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Meritage Homes. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Meritage Homes. More…

Key Ratios Snapshot

Some of the financial key ratios for Meritage Homes are shown below. More…

Market Price

On Wednesday, the company’s stock opened at $107.3 and closed at $109.5, up by 1.7% from its last closing price of $107.7. This solid financial performance signals MERITAGE HOMES‘ ability to consistently generate profits and meet investor expectations. Going forward, MERITAGE HOMES expects to continue its strong financial performance in the coming quarters, with improved operating cash flow and higher profits.

The company has also committed to investing in research and development to improve the quality of its products and services. With these efforts, MERITAGE HOMES is positioning itself to become a leader in the industry, delivering long-term value for its shareholders. Live Quote…

Analysis

At GoodWhale, we recently conducted an analysis of MERITAGE HOMES‘s wellbeing. Our findings indicate that MERITAGE HOMES is a medium risk investment in terms of financial and business aspects. We found two risk warnings in their balance sheet and cashflow statement. If you’re curious to learn more about our findings, please register with us to check it out. We hope our analysis helps you make informed decisions about your investments. More…

Peers

Beazer Homes USA Inc is a privately held company that is the tenth largest homebuilder in the United States. Skyline Champion Corp is a publicly traded company and the fifth largest builder in the United States. Taylor Morrison Home Corp is a publicly traded company and is the seventh largest homebuilder in the United States.

– Beazer Homes USA Inc ($NYSE:BZH)

Beazer Homes USA Inc is one of the largest homebuilders in the United States. The company has a market cap of 311.19M as of 2022 and a return on equity of 15.8%. Beazer Homes builds and sells single-family homes, townhomes, and condominiums in the United States. The company was founded in 1985 and is headquartered in Atlanta, Georgia.

– Skyline Champion Corp ($NYSE:SKY)

Skyline Champion Corporation is an American publicly traded company and one of the largest manufacturers of manufactured homes, modular homes, and park model RVs in North America. The company is headquartered in Elkhart, Indiana.

As of 2022, Skyline Champion Corporation has a market capitalization of 3.08 billion and a return on equity of 30.7%. The company’s primary business is the design, production, and sale of manufactured homes, modular homes, and park model RVs. Skyline Champion Corporation operates in three segments: Factory-Built Housing, Modular Buildings, and Park Models.

– Taylor Morrison Home Corp ($NYSE:TMHC)

Taylor Morrison Home Corporation is a homebuilder and land developer in the United States. The Company’s segments include Homebuilding and Financial Services. The Homebuilding segment builds and sells single-family detached and attached homes designed primarily for the entry-level and first move-up markets. This segment also provides mortgage banking and title services to homebuyers in its communities. The Financial Services segment provides mortgage banking and title services to third-party homebuyers in communities where it does not build homes, as well as to homebuyers of Taylor Morrison homes. The Company operates in Arizona, California, Colorado, Florida, Georgia, Illinois, North Carolina and Texas.

Summary

MERITAGE HOMES reported strong fourth quarter financial results for the fiscal year 2022, ending December 31, 2022. Total revenue was up 10.5% year-on-year to USD 262.4 million, and net income also grew 32.8% to USD 2000.7 million. This excellent performance indicates that MERITAGE HOMES is a sound investment opportunity for investors. The company’s strong growth potential gives investors plenty of upside potential, and its competitive advantages make it an attractive option for those looking for a safe and reliable long-term return.