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Meritage Homes (MTH) is like:

• The Toyota of homebuilding, focusing on mass-producing reliable, energy-efficient, and value-oriented homes for a broad market.
• The Hyundai of new houses, known for delivering modern designs, good features, and strong value for a wide range of homebuyers.

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• Single-Family Homes: New construction homes designed for energy efficiency and modern living, primarily targeting first-time and first-move-up buyers.
• Mortgage Lending: Provides home financing solutions through a subsidiary to assist customers in purchasing Meritage homes.
• Title Services: Offers real estate settlement services and title insurance to facilitate the closing process for home purchases.

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Meritage Homes (symbol: MTH) primarily sells homes directly to individual homebuyers. As a result, it does not have major corporate customers. The company serves the following categories of individual customers:

• Entry-Level Homebuyers: This category includes individuals and families who are purchasing their first home. They are typically seeking affordability, modern designs, and energy-efficient features in growing communities. Meritage Homes often targets this segment with more compact homes and efficient land use to keep prices competitive.
• First-Move-Up Homebuyers: These are individuals or families who already own a home but are looking to upgrade. They typically seek a larger home, more premium features, better community amenities, or a different location as their needs evolve. Meritage Homes offers a variety of floor plans and communities that cater to those looking for more space and enhanced living.

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Phillippe Lord, Chief Executive Officer

Phillippe Lord became CEO of Meritage Homes in January 2021. He initially joined the company in 2008, where he was instrumental in creating the strategic operations and market research department. He served as President of the West Region from 2012 to 2015 and then as Chief Operating Officer and Executive Vice President from 2015 to 2020. Before joining Meritage Homes, Mr. Lord held leadership positions at Acacia Capital, Centex Homes, and Pinnacle West Capital.

Hilla Sferruzza, Executive Vice President, Chief Financial Officer

Hilla Sferruzza was appointed Chief Financial Officer of Meritage Homes in April 2016. She began her career at Meritage Homes in 2006, serving as Corporate Controller (2010-2015) and Chief Accounting Officer (2010-2021). Prior to her tenure at Meritage Homes, Ms. Sferruzza held various management roles at Starwood Hotels and Resorts Worldwide, Inc., which was later acquired by Marriott International. She also worked as a public auditor for KPMG. She is a Certified Public Accountant (CPA).

Steven J. Hilton, Executive Chairman of the Board

Steven J. Hilton co-founded Monterey Homes, the predecessor to Meritage Homes, in 1985. He led Meritage Homes for 35 years as Chairman and CEO until his retirement as CEO in January 2021, and continues to serve as Executive Chairman. Under his leadership, Monterey Homes became a publicly traded company in 1997.

Malissia Clinton, Executive Vice President, General Counsel and Secretary

Malissia Clinton joined Meritage Homes in 2022. Before Meritage, she spent 12 years at The Aerospace Corporation, where her most recent role was Senior Vice President, General Counsel and Secretary. From 1998 to 2009, she served as Senior Counsel for Special Projects at Northrop Grumman. She began her legal career as a litigator at Tuttle and Taylor. Ms. Clinton also serves as a board director for 3D Systems Corporation (NYSE: DDD) and Pacaso.

Javier Feliciano, Executive Vice President, Chief People Officer

Javier Feliciano joined Meritage Homes in November 2015 as Chief Human Resources Officer, a role now known as Chief People Officer. His prior experience includes leadership positions at Ford Motor Company, PepsiCo, Apollo Education Group, and Valeo. At Apollo Education Group, he was Vice President, Human Resources and HR Director from 2010 to 2015.

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The key risks to Meritage Homes' business are primarily driven by macroeconomic factors affecting the housing market and construction costs:

1. High Mortgage Rates and Weakening Housing Demand: Elevated and volatile mortgage rates significantly suppress buyer demand and affordability, leading to slower sales and the need for increased sales incentives. This directly impacts the company's revenue and overall profitability.
2. Rising Construction and Land Costs: Meritage Homes faces risks from increasing costs for construction materials, potentially exacerbated by tariffs, and rising lot acquisition costs. These higher input costs can squeeze profit margins.
3. Pressure on Profitability and Margins: The combination of slower sales volume, the necessity of offering incentives to attract buyers, and increased operating expenses, such as Selling, General, and Administrative (SG&A) costs, places continuous pressure on the company's gross and net profit margins.

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Meritage Homes (MTH) primarily focuses on designing and building energy-efficient, single-family homes for entry-level and first move-up buyers in the United States. The company operates in fast-growing markets across the West, Central, and East regions of the country, including states such as Arizona, California, Colorado, Utah, Texas, Florida, Georgia, North Carolina, South Carolina, and Tennessee.

The addressable market for Meritage Homes' main products can be estimated by the U.S. single-family housing construction market. The market size for single-family housing construction in the U.S. was estimated at $771.08 billion in 2024 and is projected to grow to $804.08 billion in 2025. This market is expected to reach $1.02 trillion by 2029, demonstrating a compound annual growth rate (CAGR) of 6.2%.

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Meritage Homes (MTH) is expected to drive future revenue growth over the next 2-3 years through several key strategies and market dynamics:

1. Expansion of Community Count: Meritage Homes is focused on increasing its active community count. The company anticipates mid-double-digit year-over-year growth in community count for 2025 and another double-digit increase for 2026. As of the third quarter of 2025, Meritage achieved a record community count of 334, marking a 20% increase from the prior year. This expansion of its footprint in various markets is a direct driver for higher sales volumes.

2. Strategic Focus on Entry-Level and First Move-Up Buyers: Meritage Homes emphasizes building affordable, energy-efficient, and move-in-ready homes, primarily catering to entry-level and first move-up buyers. This strategy helps the company maintain a competitive edge in a volatile market by providing consumers with confidence and affordable payment options. In the fourth quarter of 2024, entry-level homes represented 91% of sales orders, up from 88% in the prior year.

3. "Move-in Ready" Strategy and Efficient Backlog Conversion: The company's "move-in ready" speculative building approach and its "60-day closing commitment" are crucial to its operational efficiency and demand capture. This strategy leads to faster cycle times and strong backlog conversion rates, such as a company-record 177% in Q4 2024. More than 50% of closings in Q4 2024 were homes sold within the same quarter, demonstrating the effectiveness of this approach in meeting immediate buyer demand.

4. Strategic Land Acquisitions: Meritage Homes has been actively investing in land acquisition and development to secure future growth. In 2024, the company allocated $2.5 billion to land spend, controlling approximately 14,400 net new lots, including those from the acquisition of Elliott Homes. As of March 31, 2025, Meritage owned or controlled approximately 84,200 lots, providing a multi-year supply for future community development.

5. Potential for Stabilizing or Declining Mortgage Rates: Analysts and company management suggest that a stabilization or decline in mortgage rates could significantly boost demand and profitability. While Meritage currently utilizes financing incentives to drive sales, a more favorable interest rate environment could reduce the need for such incentives, improving gross margins and overall profitability. The company has a long-term gross margin target of 22.5–23.5%, which is contingent on improved economic conditions and reduced incentive burdens.

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1. Share Repurchases

• In 2024, Meritage Homes repurchased $125.9 million of its shares.
• For the first nine months of 2025, the company repurchased $145 million in stock.
• As of September 30, 2025, $664 million remained available under the authorized share repurchase program, with an additional $500 million approved by the Board in Q3 2025.

2. Share Issuance

• In 2024, Meritage Homes issued $575.0 million of convertible senior notes.
• In Q1 2025, the company issued $500 million in 10-year senior notes at 5.65%.

4. Outbound Investments

• Meritage Homes expanded into new markets in Alabama and the Gulf Coast in 2024, securing approximately 37,000 net new lots.
• The company made a strategic investment through the acquisition of Elliott Homes, contributing to community growth in regions like the Gulf Coast.

5. Capital Expenditures

• In 2023, Meritage Homes' land acquisition and development spend was $1.9 billion.
• The company invested approximately $1.5 billion in land acquisition and development during 2022.
• For Q2 2025, land acquisition and development spending was reduced to $509 million, and the full-year 2025 land spend target was lowered from $2.5 billion to $2.0 billion, indicating a disciplined approach to capital preservation.