Is Meritage Homes a Good Investment?

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Meritage Homes Intrinsic Value – Meritage Homes ($NYSE:MTH) is one of the largest homebuilders in the United States. Meritage Homes builds single-family homes and townhomes across the United States. The company has seen strong growth in recent years, driven by favorable demographics and low interest rates.

However, concerns about the overall macroeconomic picture and increasing cancellation rates have led me to believe that Meritage Homes is not a good investment at this time. Purchasing mortgage rate locks ahead of time was supposed to mitigate some of the potential cancellations, but the uptick proves that there is no sure solution.

In addition, the overall macroeconomic picture is one of slowing economic growth and rising interest rates. For these reasons, an investor’s best course of action is to sit on the sidelines when it comes to Meritage Homes.

Stock Price

There has been a lot of negative media exposure surrounding Meritage Homes, but that hasn’t stopped the company from being a good investment. On Wednesday, Meritage Homes stock opened at $72.5 and closed at $72.5, down by 0.7% from last closing price of 73.0. Despite the negative media coverage, Meritage Homes is still a good investment for those looking to get into the housing market.

VI Analysis – Meritage Homes Intrinsic Value Calculator

The VI app makes it easy to analyze a company’s fundamentals and assess its long-term potential. Based on this analysis, the intrinsic value of a MERITAGE HOMES share is around $101.3. However, the stock is currently traded at $72.5, representing a 28% discount to its intrinsic value.

VI 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

There are a number of reasons to consider investing in Meritage Homes. For one, the company has a strong track record of delivering quality homes and has been in business for over 30 years.

Additionally, Meritage Homes is a publicly traded company, which provides investors with greater liquidity and transparency. Another key reason to consider investing in Meritage Homes is the company’s robust growth prospects. In particular, Meritage Homes is benefiting from the strong demand for new housing in the United States. Looking ahead, Meritage Homes is well positioned to continue its growth trajectory as the U.S. housing market continues to recover. Consequently, investing in Meritage Homes could be a wise move for long-term investors.