• Meritage Homes reported its second quarter 2025 results in late July, revealing a decline in both revenue to US$1.62 billion and net income to US$146.88 million compared to the prior year.
• Despite these declines, the company continued its share buyback program, repurchasing 674,124 shares during the quarter and completing nearly 8% of its buyback authorization since 2019.
• We'll explore how Meritage's ongoing share repurchase program shapes its investment narrative amid recent earnings pressures.

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Meritage Homes Investment Narrative Recap

To be a shareholder in Meritage Homes right now, you need to believe that the firm's rapid community expansion and focus on entry-level buyers will eventually outweigh current market headwinds and weaker earnings. The recent Q2 results did confirm a material decline in both revenue and profitability, reflecting margin pressure from slowing demand and persistent affordability challenges; this remains the most important catalyst and biggest risk for the business in the short term, with the news providing reinforcement rather than a shift in that risk profile.

Among the latest company actions, Meritage's ongoing share buyback, repurchasing 674,124 shares last quarter, stands out. This move has increased the proportion of buybacks completed to nearly 8% of the company's authorization since 2019, which may offer some ongoing support to per-share metrics during periods of earnings volatility, but does not change the fundamental dependency on restoring volume growth amid affordability concerns.

Yet, against the draw of potential share buybacks, investors should recognize the heightened risk of unpredictable revenue and earnings swings due to...

Read the full narrative on Meritage Homes (it's free!)

Meritage Homes' outlook projects $7.2 billion in revenue and $553.0 million in earnings by 2028. This assumes a 4.8% annual revenue growth rate but a $85.3 million decrease in earnings from the current $638.3 million.

Uncover how Meritage Homes' forecasts yield a $85.75 fair value, a 21% upside to its current price.

Exploring Other Perspectives

Community fair value views for Meritage Homes span from US$85.75 to US$225 across three private investor estimates on Simply Wall St. These wide-ranging opinions contrast with ongoing concerns about margin compression and earnings volatility as key influences on company performance; explore the variety of perspectives to inform your next steps.

Explore 3 other fair value estimates on Meritage Homes - why the stock might be worth over 3x more than the current price!

Build Your Own Meritage Homes Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Meritage Homes research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Meritage Homes research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Meritage Homes' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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