Stock fact sheet · data as of
Meritage Homes Corporation (MTH): fair value, margin of safety and Wheel Score
Consumer Cyclical · Residential Construction · United States · Value
Is MTH undervalued?
MTH has a margin of safety of 40%: the stock closed at 60.28 on 16 Oct 2026 against a GLS average fair value of 101.28. 6 of the 9 valuation models that produced a number sit above the price. Our screens treat a discount this large as a strong starting point for a cash-secured put, not as a verdict - the fair value is a model output, and a wide gap can mean the models are missing something the market knows.
There is a wide gap between GLS Growth (14.48) and Graham Growth (238.70). When the models are this far apart the "fair value" is really a range, and the margin of safety above should be read with that range in mind.
The nightly engine files MTH under Value: positive earnings at a P/E of 18 or less.
Nine valuation models for MTH
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 108.19 | +79% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 91.95 | +53% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 238.70 | +296% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 101.04 | +68% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 14.48 | -76% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 155.28 | +158% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 119.39 | +98% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 27.52 | -54% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 54.96 | -9% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | 73.44 | +22% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 76.75 | +27% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Meritage Homes Corporation scores 6 of 9 on the Piotroski F-score: a middling result that passes the Sunday Scan's "6 or more" rule. Some of the nine tests on profitability, leverage and efficiency are failed, so the accounts are worth a look before selling a put on the name. A GLS Moat score of 4.0/10 is a weak reading: the ten-year history the score grades (revenue, EPS, book value, margins, cash flow, share count, ROIC) has not been steady, so the Moat part of the Wheel Score contributes little.
Returns on capital are moderate - ROIC 6.4%, ROE 8.7%, ROA 5.9% - with debt at 0.36 times equity and a free-cash-flow yield of 10.6%.
The dividend yield is 3.10% at a payout ratio of 37%; for a wheel trader holding assigned shares the dividend adds to the covered-call premium, and the ex-dividend date is worth knowing before a call is sold. Revenue comes mainly from Real Estate 50%, Home Building 49%, Land 1% (quarter Q2 FY2026).
Institutional ownership scores 10/10, insider activity 1/10 and Congressional trading 5/10 on the GLS smart-money scales.
| Piotroski F-score | 6 / 9 | ROIC | 6.4% |
|---|---|---|---|
| GLS Moat | 4.0 / 10 | ROE | 8.7% |
| Debt / equity | 0.36 | ROA | 5.9% |
| Free-cash-flow yield | 10.6% | Payout ratio | 37% |
| Institutions | 10 / 10 | Insiders · Congress | 1 · 5 / 10 |
Wheel Score 80: Prime
With a Wheel Score of 80, Meritage Homes Corporation sits in the Prime band - price, quality and premium all line up for the wheel strategy. The parts: Value 25/25, Health 13/20, Moat 6/15, Premium 20/20, Stability 16/20. A high score is a ranking, not a signal: it says nothing about timing, the earnings date or your position size.
Implied volatility is 43% on the near-the-money contracts 20-60 days out - inside the 35-60% range the Wheel Score pays full marks for: enough premium to be worth selling, not so much that the risk is unpaid. Chain open interest is 3,051 contracts across all expiries - enough for the wheel at normal size.
Volume runs at 894k shares a day on a market cap of $3.9B, with a beta of 1.34 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score gives that 16 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 25 / 25 | 40% margin of safety | |
| Health | 13 / 20 | Piotroski 6/9 | |
| Moat | 6 / 15 | moat 4.0/10 | |
| Premium | 20 / 20 | implied volatility 43% | |
| Stability | 16 / 20 | 894k shares/day, $3.9B cap, beta 1.34 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
Meritage Homes Corporation reports earnings on 27 Oct 2026 (after the close) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Residential Construction
The 12 companies below are the closest to Meritage Homes Corporation by market cap within the Residential Construction industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| CVCO Cavco Industries, Inc. | 535.60 | 530.46 | -1% | 67Good | $4.1B |
| SKY Champion Homes, Inc. | 75.90 | 80.03 | +5% | 76Good | $4.1B |
| MHO M/I Homes, Inc. | 126.02 | 176.77 | +29% | 76Good | $3.2B |
| IBP Installed Building Products, Inc. | 187.94 | 112.54 | -67% | 57Fair | $5.0B |
| GRBK Green Brick Partners, Inc. | 61.98 | 91.90 | +33% | 79Good | $2.7B |
| KBH KB Home | 43.65 | 62.28 | +30% | 80Prime | $2.7B |
| HOVNP Hovnanian Enterprises, Inc. PFD DEP1/1000A | 16.85 | 130.60 | +87% | 39No options | $2.5B |
| CCS Century Communities, Inc. | 55.55 | 55.18 | -1% | 59Fair | $1.6B |
| TOL Toll Brothers, Inc. | 130.41 | 199.69 | +35% | 85Prime | $12.0B |
| LGIH LGI Homes, Inc. | 44.08 | 92.94 | +53% | 72Good | $1.0B |
| NVR NVR, Inc. | 5,940.83 | 6,229.48 | +5% | 39No options | $15.9B |
| BZH Beazer Homes USA, Inc. | 33.41 | 25.56 | -31% | 45Weak | $891M |
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Start free See the Sunday ScanQuestions about MTH
Is MTH undervalued right now?
By the GLS models, yes: at 60.28 the stock is 40% below the average fair value of 101.28 (data as of 16 Oct 2026). Whether the discount is deserved is the question to research next.
What is the Wheel Score of MTH and what does it mean?
MTH scores 80 out of 100 (Prime). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for MTH?
101.28 per share as of 16 Oct 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Meritage Homes Corporation report earnings next?
The next earnings report is due on 27 Oct 2026 (after the close), 11 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does MTH have listed options, and how liquid are they?
Yes. The nightly snapshot found 230 listed contracts with 3,051 open interest across all expiries and implied volatility of 43% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.