Meritage Homes Corporation: A Tale Of Community Expansion and Market Share Growth!

Meritage Homes commenced the year with a remarkable first quarter in 2024, demonstrating both strong execution and a robust demand environment, yet facing challenges due to the unpredictability of interest rates and increased land and material costs. On the performance front, Meritage Homes reported substantial gains, with first-quarter sales orders hitting a record 3,991 homes, reflecting a 14% year-over-year increase. This noteworthy jump was primarily driven by healthy spring sales, an 8% cancellation rate, and robust demand across all regions, particularly from entry-level homebuyers who make up more than 90% of the order volume. Home closing revenue reached $1.5 billion, supported by a high backlog conversion rate of 138% which led to 3,507 home deliveries. In terms of financial metrics, Meritage achieved a diluted earnings per share (EPS) of $5.06, buoyed by a home closing gross margin of 25.8% and controlled selling, general and administrative expenses (SG&A) at 10.4% of home closing revenue.