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StocksUpdated•Originally published 6 May 2026•Updated 6 May 2026•

1 min read

Meritage Homes Rated Hold as Q1 2026 Earnings and Margins Slump

Key Facts

1MTH home closing revenue fell 17% y/y in Q1 2026.

2Net earnings declined 55% y/y as gross margin dropped 450 bps to 17.5%.

3Order value fell 10% y/y despite a 17% increase in community count.

Analysts have maintained a 'Hold' rating on Meritage Homes (MTH) following a disappointing Q1 2026 performance, marked by a 17% drop in home closing revenue and a 55% slump in net earnings. This downturn aligns with broader sector weakness, as Builders FirstSource (BLDR) reported a 10% decline in net sales and a 42.1% plunge in adjusted EBITDA. Profitability across the industry is under pressure, with BLDR's gross margin contracting by 220 basis points due to soft demand, mirroring the 450 basis point compression seen at MTH. Despite MTH expanding its community count, the total value of new orders fell by 10%, highlighting persistent buyer hesitation. Market experts suggest that significant margin erosion and the lack of immediate catalysts justify a cautious stance on both homebuilders and their suppliers.

28 days ago

Version History

Version 128 days ago

What changed: The story was updated to include financial results for Builders FirstSource (BLDR), showing a decline in sales and margins that aligns with the broader slowdown in the housing sector.