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Dec 31, 2023
Meritage Homes Q4 2023 Earnings Report
Meritage Homes reported strong orders and solid financial performance, driven by healthy demand and effective execution.
Key Takeaways
Meritage Homes reported a 60% year-over-year increase in sales orders for Q4 2023, driven by decreasing interest rates and recovering consumer confidence. Home closing revenue was $1.6 billion, and diluted EPS was $5.38. The company's backlog conversion reached a record 110%.
Sales orders increased by 60% year-over-year due to higher absorption pace.
Home closing revenue was $1.6 billion, reflecting lower volume and ASP.
Home closing gross margin was 25.2%, benefiting from improved cycle time and lower lumber costs.
Net earnings decreased by 24% to $198.9 million, with diluted EPS at $5.38.
Forward Guidance
Meritage Homes anticipates continued confidence from entry-level buyers and is well-positioned to leverage its spec inventory in the current demand environment as the economy stabilizes.
Positive Outlook
- Growing spec inventory levels
- Well-positioned to take advantage of positive demand environment
- Entry-level buyers will continue to gain confidence
- Favorable need-based demand for millennials and Gen Z
- Continuing shortage of existing homes for sale
Challenges Ahead
- Changes in mortgage interest rates
- Inflation in the cost of materials
- Supply chain and labor constraints
- Adverse effect of slow absorption rates
- Potential exposure to impacts from natural disasters
Historical Earnings Impact
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Avg. Return Before/After Earnings
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