As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the home builders industry, including Meritage Homes (NYSE:MTH) and its peers.
Traditionally, homebuilders have built competitive advantages with economies of scale that lead to advantaged purchasing and brand recognition among consumers. Aesthetic trends have always been important in the space, but more recently, energy efficiency and conservation are driving innovation. However, these companies are still at the whim of the macro, specifically interest rates that heavily impact new and existing home sales. In fact, homebuilders are one of the most cyclical subsectors within industrials.
The 12 home builders stocks we track reported a slower Q4. As a group, revenues beat analysts’ consensus estimates by 1.2%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.8% since the latest earnings results.
Meritage Homes (NYSE:MTH)
Originally founded in 1985 in Arizona as Monterey Homes, Meritage Homes (NYSE:MTH) is a homebuilder specializing in designing and constructing energy-efficient and single-family homes in the US.
Meritage Homes reported revenues of $1.62 billion, down 2.3% year on year. This print exceeded analysts’ expectations by 2.9%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ adjusted operating income estimates but a significant miss of analysts’ backlog estimates.
MANAGEMENT COMMENTS"2024 was another record-setting year for Meritage as we began to roll out our new move-in ready strategy and were able to capitalize on continuing demand for affordable, immediately available homes. For the full year 2024, we generated our highest annual closing volume of 15,611 homes and, despite a pullback in average sales price, we achieved a company-high home closing revenue of $6.3 billion," said Steven J. Hilton, executive chairman of Meritage Homes.
The stock is down 9.7% since reporting and currently trades at $71.22.
Read our full report on Meritage Homes here, it’s free.
Best Q4: Champion Homes (NYSE:SKY)
Founded in 1951, Champion Homes (NYSE:SKY) is a manufacturer of modular homes and buildings in North America.
Champion Homes reported revenues of $644.9 million, up 15.3% year on year, outperforming analysts’ expectations by 9.2%. The business had an incredible quarter with a solid beat of analysts’ sales volume estimates and an impressive beat of analysts’ EPS estimates.
Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 1.2% since reporting. It currently trades at $91.66.
Is now the time to buy Champion Homes? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: Toll Brothers (NYSE:TOL)
Started by two brothers who started by building and selling just one home in Pennsylvania, today Toll Brothers (NYSE:TOL) is a luxury homebuilder across the United States.
Toll Brothers reported revenues of $1.86 billion, down 4.6% year on year, falling short of analysts’ expectations by 2.9%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
As expected, the stock is down 13.9% since the results and currently trades at $105.05.
Read our full analysis of Toll Brothers’s results here.
LGI Homes (NASDAQ:LGIH)
Based in Texas, LGI Homes (NASDAQ:LGIH) is a homebuilding company specializing in constructing affordable, entry-level single-family homes in desirable communities across the United States.
LGI Homes reported revenues of $557.4 million, down 8.4% year on year. This result came in 11% below analysts' expectations. Overall, it was a disappointing quarter as it also recorded a significant miss of analysts’ adjusted operating income estimates.
LGI Homes had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 14.3% since reporting and currently trades at $65.16.
Read our full, actionable report on LGI Homes here, it’s free.
Lennar (NYSE:LEN)
One of the largest homebuilders in America, Lennar (NYSE:LEN) is known for constructing affordable, move-up, and retirement homes across a range of markets and communities.
Lennar reported revenues of $7.63 billion, up 4.4% year on year. This print surpassed analysts’ expectations by 2%. More broadly, it was a mixed quarter as it also logged a solid beat of analysts’ EPS estimates but a miss of analysts’ backlog estimates.
The stock is down 4.6% since reporting and currently trades at $114.51.
Read our full, actionable report on Lennar here, it’s free.
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