Meritage Homes Reports Q2 Profit Drop Beats Revenue Estimates

Meritage Homes reported a 37% drop in net earnings and a 5% decline in home closing revenue in the second quarter of 2025, with net profit falling to $147 million and earnings per share dropping to $2.04. Despite these declines, the company beat Wall Street revenue and earnings estimates, reporting $1.6 billion in revenue and demonstrating operational strength through faster home construction and a focus on move-in ready inventory. The homebuilder sold 3,914 homes and maintained a solid average absorption rate of 4.3 net sales per month, navigating challenges like high mortgage rates and reduced consumer confidence. Management highlighted strategic moves including reduced land acquisition spending and increased shareholder returns through dividends and share repurchases. While backlog decreased by over 37% year-on-year, analysts remain optimistic with an average price target suggesting upside potential of around 15-21%, and brokerages rating the stock as an outperform. Overall, Meritage Homes is positioning itself to remain competitive by emphasizing faster build times, affordable homes, and liquidity strength amid a challenging housing market environment.