• Meritage Homes reported third quarter 2026 revenue of US$1,168.43 million and net income of US$67.78 million, both below the prior year. Diluted EPS from continuing operations was US$1.04 compared with US$1.39 a year earlier.
• Results for the first nine months of 2026 showed softer fundamentals for Meritage Homes, with revenue of US$3,686.25 million and net income of US$213.72 million. Lower earnings per share indicate pressure on profitability through most of the year.
• We will now look at how Meritage Homes' weaker third quarter earnings might influence the investment narrative around its margin recovery ambitions.

Spot shifting housing-cycle opportunities by comparing Meritage Homes' latest earnings pressure with our curated 35 high quality undervalued stocks.

Meritage Homes Investment Narrative Recap

To own Meritage Homes, you need to be comfortable with a housing model that leans hard into entry level and first move up buyers, and uses quick close spec inventory plus cost controls to support margins over time. The latest quarter showed pressure on that thesis, with revenue, earnings and diluted EPS from continuing operations all below the prior year.

In the short term, the key swing factor is how quickly adjusted home closing gross margins can stabilise while incentives remain a tool to address affordability. The biggest risk is that weaker demand and tighter affordability keep pulling on average selling prices and volumes, which could extend the current squeeze on profitability and cash generation.

The fresh earnings release for the quarter and nine months to 30 September 2026 is the key update to plug into this story. Management reported US$1,168.43 million of third quarter revenue and US$67.78 million of profit, with diluted EPS from continuing operations at US$1.04, all lower than a year earlier.

For the first nine months, revenue of US$3,686.25 million and net income of US$213.72 million indicate that the margin recovery narrative is still work in progress. As you weigh the catalysts around mix shift, spec inventory and cost reductions, this softer profitability record raises the bar on execution risk and makes future quarters more important to watch.

Meritage Homes' narrative projects US$6.0b revenue and US$401.8 million earnings by 2029. This assumes 5.0% yearly revenue growth and a roughly US$104 million earnings increase from US$297.8 million today.

Uncover why Meritage Homes' fair value is essentially in line with its current price.

Exploring Other Perspectives

Some of the most optimistic analysts framed Meritage Homes’ balance sheet as the real swing factor. Before this earnings release, their models leaned on revenue reaching about US$6.2b and earnings near US$436.4 million by 2029. You can see how that more upbeat story might shift once these softer results are fully reflected.

Explore 3 other Meritage Homes fair value estimates, including one that suggests as much as 1070% upside from the current price!

Decide For Yourself

Don't just follow the ticker. Dig into the data and build a conviction that's truly your own.

• A great starting point for your Meritage Homes research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• See our latest analysis for Meritage Homes. The report includes a comprehensive fundamental analysis summarized in a single visual, the Snowflake, making it easy to evaluate Meritage Homes' overall financial health at a glance.

Looking For More Investment Ideas Beyond Meritage Homes?

If the Meritage Homes story has sharpened your thinking about risk, reward and balance sheet strength, it can be useful to compare it with other opportunities using the Simply Wall St Screener.

• Focus on quality at a reasonable price by scanning for companies that combine strong fundamentals with attractive valuations through the 19 high quality undiscovered gems.
• Prioritise resilience and capital preservation by filtering for businesses with sturdier financial profiles using the 31 resilient stocks with low risk scores.
• Target financially disciplined operators by reviewing a curated list of solid balance sheet and fundamentals (24 results) that may complement or contrast your view on Meritage Homes.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Disclaimer:This article represents the opinion of the author only. It does not represent the opinion of Webull, nor should it be viewed as an indication that Webull either agrees with or confirms the truthfulness or accuracy of the information. It should not be considered as investment advice from Webull or anyone else, nor should it be used as the basis of any investment decision.