QualityDipStocks / Consumer Discretionary · Homebuilding
Meritage Homes MTH
Outside our quality screen, so we don’t track its dips. It’s 19% below its 52-week high.
Outside our quality screen, trading well below our fair value estimate.
- Fair value est.
- $139.37+102%
- Market Value
- forming
- Off 52-wk high
- −19%
- Risk vs market
- Market-likebeta 0.94
5 bullish · 4 bearish See why
Priced in
How much growth the market assumed at the 52-week high, the low and today (a reverse DCF).
At the high ($85.18, Jun 26) the price assumed about 11%/yr free-cash-flow growth; at the low ($57.85, Oct 12) about −6%; today about −6%. The last 3 years delivered −37%/yr (free cash flow).
Dashed line: what the last 3 years delivered, −37%/yr (free cash flow)
| High | Low | Now | |
|---|---|---|---|
| Price | $85.18Jun 26 | $57.85Oct 12 | $69.01 |
| Implied growth | +11% | −6% | −6% |
| P/E | 15.0× | 11.6× | 15.1× |
| P/FCF | 24.3× | 9.2× | 9.3× |
What this means: the higher the implied growth, the more the price already counts on. If today's number sits well below what the business has delivered, the market expects less than its track record.
How it’s computed
Reverse DCF: the same 10-year free-cash-flow model as our fair value estimate (9.5% discount rate, growth for years 1–5 fading to 3% by year 10, 3% after), solved for the growth that makes it equal the market value at each price. For the high and the low we use only the filings that were public on that day, so nothing from a later report leaks back. Market value = that close × diluted shares. P/E = market value / 12-month net income; Price / FCF = market value / 12-month free cash flow; EV / Sales = (market value + debt − cash) / 12-month revenue. Hidden when the share count moved over 20% (split, merger), free cash flow is negative, or the company reports in another currency.
Valuation
What we estimate it's worth, and how it ranks on value vs every stock we cover.
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 6.0% ±2 points. Bear = 10.5% and 4.0%; bull = 8.5% and 8.0% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price is below even the bear case.
Cyclical / peak cash flow — treat with care
What the price implies To be worth today’s price, MTH’s free cash flow would need to shrink about 6% a year for five years; our estimate uses 6%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 31 to Nov 2, 252 sessions). Beta = how much MTH moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Moves about in line with the market, and its own price swings are 3.1× the S&P 500’s.
- Beta vs S&P 500
- 0.94
- Volatility
- 40% vs 13% SPY
- Correlation SPY
- 0.30
- Correlation QQQ
- 0.15
How it ranks
Where MTH stands vs every one of the 1,996 stocks we cover that has the number. Longer bar = better.
Top quarter on 3 of 3 measures
- Discount to fair value estimate102% · price below our base caseTop 8%of 1,314
- Free cash flow yield11% · free cash flow vs market capTop 10%of 1,391
- Dividends + buybacks yield12% · cash paid out or used to retire shares, vs market capTop 3%of 1,836
From SEC filings and our fair value estimate model. A ranking, not advice.
Valuation details
DCF $139.37 · FCF value $125.47
Cyclical / peak cash flow — treat with care
Assumes 6.0% growth for 5 years (default; under two years of revenue in SEC data), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $7.43 a share (trailing 12 months to Sep 30, 2026), from the 10-Q filed Oct 30, 2026.
Fundamentals
The business itself: sales, profits, cash and debt, from SEC filings.
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
ValuationFree-cash-flow yield of 10.8% (price / FCF 9.3×): $484M of free cash in the last 12 months.
ValuationOur DCF fair value estimate is $139.37, 102% above the price (cyclical or peak cash flow, so treat with care).
Cash returnsShare count down 8.5% in a year: $435M of buybacks over 12 months.
ValuationP/E of 15.1× vs a 20.7× median for the 341 Consumer Discretionary companies we cover.
Cash returnsDividend yield of 2.7% ($124M paid over 12 months, 41% of earnings).
Top bearish points 4 of 5
GrowthDiluted EPS fell 41% to $6.35 in FY2025.
ProfitabilityReturn on equity fell 7 points in two fiscal years, to 9% in FY2025.
ProfitabilityReturn on equity is only 6% over the last 12 months.
QualityDoesn’t pass our quality screen: ROE under 12% and ROIC under 10%; sales down vs the year-ago quarter; net debt 3.1× EBITDA (limit 3×).
All fundamentals
P/E 15.1 · FCF yield 10.8% · ROE 6%
Valuation
- P/E
- 15.1×Consumer Discretionary median 20.7×
- Price / FCF
- 9.3×
- FCF yield
- 10.8%
- EV / EBITDA
- n/aD&A or debt not tagged in SEC data
- Price / sales
- n/anot reported in its SEC filings
- Price / book
- 0.89×
- Market cap
- $4.5Bprice × diluted shares
- Enterprise value
- n/anot reported in its SEC filings
Growth
- Revenue, 12 months
- n/anot reported in its SEC filings
- Sales growth, 12 months
- n/ano year-ago 12-month revenue
- Sales growth, 3 yrs
- n/anot reported in its SEC filings
- Diluted EPS, 12 months
- $4.44
- EPS growth, last FY
- −40.8%
- Net income, 12 months
- $298M
- Net income growth
- −45%12 months vs before
Profitability
- Gross margin
- n/agross profit isn't reported (common for service and financial companies)
- Operating margin
- n/anot reported in its SEC filings
- Net margin
- n/anot reported in its SEC filings
- FCF margin
- n/anot reported in its SEC filings
- Return on equity
- 6%
- Return on invested capital
- n/aoperating income, debt, equity or cash not tagged
Balance sheet
- Cash & short-term inv.
- $677M
- Total debt
- n/anot reported in its SEC filings
- Net cash
- n/acash or debt not tagged in SEC data
- Debt / equity
- n/adebt or equity not tagged in SEC data
- Interest coverage
- n/ainterest expense not tagged in SEC data
Cash flow & returns
- Free cash flow, 12 months
- $484M
- FCF growth, 12 months
- n/anot reported in its SEC filings
- Dividend yield
- 2.75%$124M paid
- Payout ratio
- 41%
- Buybacks, 12 months
- $435M9.7% of market cap
- Share count, 1 year
- −8.5%diluted shares vs a year ago
- Stock-based comp
- $22M
Trailing 12 months to Sep 30, 2026; balance sheet at Sep 30, 2026. From Meritage Homes’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
The business
FCF $0.3B · Sales −17%
- Free cash flow, 12 months$0.3B
- Free-cash-flow yield10.8%
- Free-cash-flow margin6%
- Gross margin18%
- Operating margin7%
- Return on invested capital4%
- Return on equity6%
- Sales growth (latest quarter vs year-ago quarter)−17%
- Net debt / EBITDA3.1×
Chart & levels
Where the price is vs its key levels and trends.
Key levels
Every level vs today’s $69.01
- 52-wk lowlowest close, 1 year$57.85−16.2%
- PriceMon Nov 2 close$69.01you are here
- 52-wk highhighest close, 1 year$85.18+23.4%
- Fair value est.base case$139.37+102.0%
Momentum & 52-week range
RSI 65 · 5 days +8.5%
Signals
Reversal signal setups, the public ledger and the next earnings date.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only run on companies that pass our quality screen.
MTH is outside our quality screen
One text when a published rule fires on one of the 332 quality companies we track: the ticker, the price, the stop and a link to the numbers. Nothing else.
Voices & buzz
Who is talking about it, and how it compares with peers.
Who’s talking about it
Notable investors, executives, analysts and public figures on Meritage Homes in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 3, 1:01 PM ET.
Compare with peers
Closest in size in Homebuilding
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.