Overview

* Meritage Homes ( MTH ) Q2 home closing revenue fell 5% yr/yr to $1.6 bln

* Net earnings for Q2 declined 37% to $147 mln, reflecting lower gross margins

* Diluted EPS for Q2 decreased to $2.04, impacted by higher SG&A and tax rates

Outlook

* Meritage targets $2.0 bln land acquisition and development spend for full year, down from $2.5 bln

Result Drivers

* FINANCING INCENTIVES - Greater utilization of financing incentives led to a decrease in average sales prices, impacting revenue

* HIGHER COSTS - Increased lot costs and terminated land deal charges contributed to lower gross margins

* SPEC STRATEGY - Improved cycle times and spec strategy drove higher backlog conversion rates, according to CEO Phillippe Lord

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q2 Home $1.60

Closing bln

Revenue

Q2 EPS $2.04

Q2 Net $147 mln

Income

Analyst Coverage

* The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 7 "hold" and no "sell" or "strong sell"

* The average consensus recommendation for the homebuilding peer group is "buy"

* Wall Street's median 12-month price target for Meritage Homes Corp ( MTH ) is $89.00, about 15.3% above its July 22 closing price of $75.37

* The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 7 three months ago

Press Release:

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)