MERITAGE HOMES Reports Fourth Quarter FY2022 Earnings Results on February 1 2023

Earnings Overview

MERITAGE HOMES ($NYSE:MTH) announced the release of their earnings results for the fourth quarter of FY2022, which ended December 31 2022, on February 1 2023. Their total revenue grew by 10.5% compared to the same period the previous year, reaching USD 262.4 million, and net income rose 32.8% 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. The 380 bps deterioration in gross margin compared to the prior year was the result of greater incentives and higher direct costs as well as several nonrecurring items. Excluding these nonrecurring items, adjusted fourth quarter 2022 home closing margin was 25.7%. SG&A as a percentage of home closing revenue was 8.4% for the current quarter which was a slight improvement over 8.5% in the prior year.

We are starting to make some headway to reduce direct costs and improve cycle time, although full impact of cost savings won’t be seen until mid to late this year. We still believe that long term our normalized gross margin will benefit from better operating leverage from our increased volume and our streamlined operations and will end up at or above 200 bps from our historical average of 20%.

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…

Price History

MERITAGE HOMES stock opened at $107.3 on Wednesday and closed at $109.5, representing an increase of 1.7% from the previous day’s closing price of 107.7. This marked the company’s fourth consecutive quarter of positive earnings growth, with the stock continuing to perform strongly on the open market. The report demonstrated that MERITAGE HOMES had achieved a strong position in the housing market, with the company recording an 11% increase in revenue year-on-year. Furthermore, the company’s net income was also up by 5%, and its balance sheet remained healthy despite the challenging economic environment.

Overall, investors responded positively to MERITAGE HOMES’ fourth quarter FY2022 earnings report, sending the stock up by 1.7%. This is indicative of the company’s impressive performance in the housing market, and further evidence that it is well positioned to continue to thrive in the future. Live Quote…

Analysis

GoodWhale can provide you with an in-depth analysis of MERITAGE HOMES‘s financials. According to our Risk Rating, MERITAGE HOMES is a medium risk investment in terms of financial and business aspects. However, we have detected 2 risk warnings in the balance sheet and cashflow statement. To have a better understanding of these warnings, become a registered user and explore our analysis further. 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 results for Q4 FY2022, with total revenue increasing by 10.5% year-over-year and net income increasing by 32.8%. This indicates a healthy financial performance for the company, providing investors with a good opportunity for growth. In terms of investing, Meritage Homes appears to have potential for long-term growth, with a focus on the homebuilding sector and progress in the residential sector. Additionally, the company’s financial stability and ability to generate significant profits is reassuring for those considering investing in it.