Market Overview

Meritage Homes's Earnings Outlook

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On Wednesday, October 21, Meritage Homes (NYSE: MTH) will release its latest earnings report. Decipher the announcement with Benzinga's help.

The Definitions of Net Income, Earnings, And Earnings Per Share (EPS)

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings and Revenue

Meritage Homes earnings will be near $2.41 per share on sales of $1.11 billion, according to analysts. In the same quarter last year, Meritage Homes reported earnings per share of $1.79 on revenue of $940.88 million.

Why Analyst Estimates And Earnings Surprises Are Important

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a given company yields the "consensus estimates." If the company posts earnings or revenue above or below the consensus estimate, the stock may move by a considerable margin.

If the company were to match the consensus estimate when it reports Wednesday, earnings would be up 34.64%. Revenue would be up 17.97% from the year-ago period. Meritage Homes's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019
EPS Estimate 1.43 1.28 1.93 1.49
EPS Actual 2.38 1.83 2.65 1.79
Revenue Estimate 888.61 M 799.94 M 1.04 B 923.15 M
Revenue Actual 1.03 B 901.01 M 1.14 B 940.88 M

Stock Performance

For a full 12 months, the return has risen by 48.86%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

Do not be surprised to see the stock move on comments made during its conference call. Meritage Homes is scheduled to hold the call at 11:00:00 ET and can be accessed here: https://investors.meritagehomes.com/news-events-presentations/ir-calendar/detail/6896/third-quarter-2020-earnings-release-and-webcast-conference

 

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Posted-In: Earnings