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Dec 31, 2020
Meritage Homes Q4 2020 Earnings Report
Meritage Homes reported a record fourth quarter with a 420 bps increase in home closing gross margin, a 50% increase in diluted EPS, and a 52% increase in orders compared to the prior year.
Key Takeaways
Meritage Homes announced record fourth-quarter results, achieving its highest quarterly home closings and revenue in the company's history. The company's strategic focus on entry-level and first move-up markets allowed it to capitalize on significant demand, driving volume, profitability, and return on equity.
Total orders for the fourth quarter of 2020 were 52% higher year-over-year, driven by an 87% increase in absorptions per store.
Home closing revenue increased by 28% to $1.4 billion, reflecting a 32% higher home closing volume.
Home closing gross margin improved by 420 bps to 24.0% in the fourth quarter of 2020.
Net earnings were $152.5 million ($3.97 per diluted share) for this quarter, compared to $103.6 million ($2.65 per diluted share) for the same quarter in the prior year.
Meritage Homes
Meritage Homes
Meritage Homes Revenue by Geographic Location
Revenue by Geographic Location
West Region Revenue
CapyFin.comCentral Region Revenue
CapyFin.comEast Region Revenue
CapyFin.com Forward Guidance
For the full year 2021, the company is projecting 11,500-12,500 home closings with home closing revenue between $4.2-4.6 billion, home closing gross margin of 22.0-23.0% and an effective tax rate of about 23.0%.
Positive Outlook
- Projecting 11,500-12,500 home closings for the full year 2021.
- Expecting home closing revenue between $4.2-4.6 billion for 2021.
- Anticipating home closing gross margin of 22.0-23.0% for the full year 2021.
- Expecting an effective tax rate of about 23.0% for 2021.
- Aiming to close out 2021 with approximately 235-245 communities.
Revenue & Expenses
Visualization of income flow from segment revenue to net income