On Apr 25, 2014, shares of
Meritage Homes Corporation
) touched a 52-week low of $38.15 after reporting disappointing
first quarter 2014 results on Apr 23. Shares of Meritage
eventually closed at $38.26 on Apr 25, with an year-to-date
return of -18.9%.
MERITAGE HOMES (MTH): Free Stock Analysis
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What Led to the Drop?
On Apr 23, Meritage Homes reported weaker-than-expected results
in the first quarter 2014. Despite year-over-year increases,
Meritage Homes missed the Zacks Consensus Estimate for both
earnings and revenue in the first quarter of 2014.
Meritage Homes' first-quarter 2014 earnings per share of 62 cents
missed the Zacks Consensus Estimate of 64 cents by 3.1%, which we
believe is due to a slowdown in order trends in the quarter Other
) also witnessed a decline in orders in their recently reported
first quarter results.
The company's net sales orders declined 1.4% year over year to
1,525 units during the quarter, reflecting slower sales pace
across the Western region. The Western region reported 26%
decline in new sales orders.
Despite the year over year increase, reported revenues missed the
Zacks Consensus Estimate of $430 million by 5%, due to weak
The company also expects lower pricing power and increased land
costs for 2014, which might led to a decline in home closing
Most of the estimates moved downward in the past 7 days,
following the company's weak earnings release. During the last 7
days, the Zacks Consensus Estimate for second quarter 2014
declined 3.3% to 87 cents per share while that for 2014 declined
6.8% to $3.55 per share.
Other Stocks to Consider
A better-ranked stock in the homebuilding sector that deserves a
William Lyon Homes
) with a Zacks Rank #1 (Strong Buy).