• In late January 2026, Meritage Homes Corporation reported full-year 2025 results showing revenue of US$5,824.44 million and net income of US$453.01 million, alongside real estate-related impairments of US$9.31 million and completion of a multiyear US$735.91 million share repurchase program.
• The company paired these mixed results with guidance for 2026 revenue to remain roughly in line with 2025 and highlighted an exceptional backlog conversion rate supported by a 60-day closing guarantee and a growing community footprint.
• We’ll examine how Meritage Homes’ cautious 2026 revenue outlook, amid affordability pressures and margin compression, shapes its broader investment narrative.

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What Is Meritage Homes' Investment Narrative?

To own Meritage Homes today, you have to be comfortable with a slower, more efficiency-driven story rather than a rapid growth one. The latest results confirm that reality: full-year 2025 revenue and net income fell year on year, margins compressed and Q4 missed on revenue even as earnings per share beat expectations. Management’s 2026 guidance for roughly flat revenue, contingent on conditions not deteriorating further, suggests that near-term catalysts hinge on improving profitability, backlog conversion and community growth rather than a big volume recovery. The company is leaning into its 60-day closing guarantee, high backlog conversion and expanding community count, while returning cash via buybacks and dividends, but affordability pressures and weaker margins remain front and center. That mix keeps the near-term risk/reward finely balanced.

However, margin pressure and affordability trends may matter more than the headline revenue guidance. Despite retreating, Meritage Homes' shares might still be trading above their fair value and there could be some more downside. Discover how much.

Exploring Other Perspectives

Three Simply Wall St Community fair value views span about US$74 to just over US$202 per share, underscoring how differently investors are thinking about Meritage. Set that against management’s flat 2026 revenue outlook and recent margin compression and you can see why it pays to weigh several viewpoints before deciding how much of this slower-growth, efficiency-focused story you want in a portfolio.

Explore 3 other fair value estimates on Meritage Homes - why the stock might be worth just $74.00!

Build Your Own Meritage Homes Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.