Meritage Homes Corp. Hits 52-Week Low - Analyst Blog

By
A A A

On Apr 25, 2014, shares of Meritage Homes Corporation ( MTH ) 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%.

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 homebuilders like PulteGroup Inc. ( PHM ) and NVR, Inc. ( NVR ) 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 orders.

The company also expects lower pricing power and increased land costs for 2014, which might led to a decline in home closing gross margin.

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 mention is William Lyon Homes ( WLH ) with a Zacks Rank #1 (Strong Buy).



MERITAGE HOMES (MTH): Free Stock Analysis Report

NVR INC (NVR): Free Stock Analysis Report

PULTE GROUP ONC (PHM): Free Stock Analysis Report

WILLIAM LYON HM (WLH): Get Free Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: MTH , NVR , PHM , WLH

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Your Car Is Spying on You
Your Car Is Spying on You           

Stocks

Referenced

50%
100%
75%
100%

Most Active by Volume

73,078,214
  • $30.33 ▼ 3.90%
57,046,796
  • $15.52 ▲ 0.45%
51,290,831
  • $100.57 ▲ 0.04%
39,855,468
  • $8.13 ▲ 1.37%
31,693,544
  • $5.50 ▲ 20.35%
31,532,510
  • $10.33 ▲ 0.78%
31,526,753
  • $39.10 ▲ 47.21%
28,366,542
  • $26.36 ▲ 1.19%
As of 8/20/2014, 04:04 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com