• In April 2026, Meritage Homes Corporation reported first-quarter 2026 results showing revenue of US$1,117.18 million and net income of US$55.31 million, both lower than the same period a year earlier, alongside basic and diluted earnings per share of US$0.82 from continuing operations.
• The company also completed a multi-year share repurchase program totaling 10,708,783 shares for US$865.91 million and guided full-year 2026 home closing volume and revenue to be roughly in line with 2025, signaling a preference for buybacks even as operational momentum appears to be slowing.
• Against this backdrop of weaker quarterly earnings and a cautious outlook, we’ll examine how flattish 2026 volume and revenue guidance affects Meritage Homes’ investment narrative.

Find 53 companies with promising cash flow potential yet trading below their fair value.

Meritage Homes Investment Narrative Recap

To own Meritage Homes, you need to be comfortable with a builder focused on entry-level and first move-up buyers, and with earnings tied closely to housing affordability and buyer sentiment. The latest quarter’s lower revenue and profit, combined with guidance for 2026 revenue and closings to hover around 2025 levels, reinforces that the near term hinges on stabilizing margins, while the key risk remains pressure on pricing and incentives rather than any single quarter’s volume outcome.

The completion of the multi-year share repurchase program, retiring 10,708,783 shares for US$865.91 million, stands out against softer results. With earnings under pressure in Q1 2026, this capital return decision matters for how per share metrics evolve if housing conditions stay choppy and 2026 revenue proves roughly flat, especially when paired with existing risks around incentives, margins, and relatively low backlog visibility.

Yet beneath the headline buybacks and cautious guidance, there is a less obvious risk investors should be aware of involving Meritage’s dependence on affordability in its core entry-level segment...

Meritage Homes' narrative projects $7.1 billion revenue and $549.0 million earnings by 2028. This requires 4.8% yearly revenue growth and an earnings decrease of $89.3 million from $638.3 million today.

Uncover how Meritage Homes' forecasts yield a $83.12 fair value, a 24% upside to its current price.

Exploring Other Perspectives

Before this weaker Q1, the most optimistic analysts were assuming roughly US$7.3 billion of revenue and about US$670.7 million of earnings by 2028, which looks far more upbeat than today’s flat 2026 guidance and reminds you that these bullish views on entry-level demand and margins may need to be revisited after this latest report.

Explore 3 other fair value estimates on Meritage Homes - why the stock might be worth less than half the current price!

Decide For Yourself

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your Meritage Homes research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Meritage Homes research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Meritage Homes' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.