The 10-second takeaway
For the quarter ended June 30 (Q2), Meritage Homes beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share grew significantly. GAAP earnings per share increased significantly.
Margins increased across the board.
Meritage Homes recorded revenue of $450.0 million. The 13 analysts polled by S&P Capital IQ predicted sales of $413.7 million on the same basis. GAAP reported sales were 60% higher than the prior-year quarter's $282.1 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.78. The eight earnings estimates compiled by S&P Capital IQ predicted $0.47 per share. Non-GAAP EPS of $0.78 for Q2 were 169% higher than the prior-year quarter's $0.29 per share. GAAP EPS of $0.74 for Q2 were 208% higher than the prior-year quarter's $0.24 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 21.2%, 260 basis points better than the prior-year quarter. Operating margin was 9.3%, 480 basis points better than the prior-year quarter. Net margin was 6.2%, 340 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $499.2 million. On the bottom line, the average EPS estimate is $0.67.
Next year's average estimate for revenue is $1.81 billion. The average EPS estimate is $2.35.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Meritage Homes is outperform, with an average price target of $51.58.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends Meritage Homes. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.