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    Meritage Homes (MTH) Could Be 6% Undervalued After Lower Q3 Earnings

    Simply Wall St·11/07/2026 14:23:21
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    Meritage Homes (MTH) just released third quarter and year to date results, with both revenue and net income lower than the prior year. This puts the latest earnings squarely in focus for shareholders.

    Meritage Homes shares closed at US$68.05 after the earnings release, with the 1 day share price return falling 4.2%. This comes even though the 7 day and 30 day share price returns of 5.55% and 13.28% point to short term momentum that contrasts with a softer 90 day share price return and a more modest 1 year total shareholder return of 4.42%.

    Compare Meritage Homes' latest move with a curated 39 high quality undervalued stocks that share solid fundamentals yet trade at prices the market may not fully reflect.

    For Meritage Homes, softer earnings and a pullback in the share price set up a simple tension: Has most of the easy upside already played out, or do the current numbers still leave meaningful value on the table?

    Most Popular Narrative: 5% Undervalued

    Against Meritage Homes' last close at $68.05, the widely followed fair value estimate of $71.88 points to a modest valuation gap that hinges on how effectively management converts cost actions and land spending into long term profitability.

    Structural cost reductions that lowered direct construction costs per square foot by nearly 6% year over year, combined with a pipeline of lower-basis land expected to flow into closings from late 2027, give Meritage Homes a path to recover toward its 22.5% to 23.5% long term gross margin target and potentially support higher net margins and earnings over time.

    See why 7 investors see Meritage Homes as 5% undervalued.

    Result: Fair Value of $71.88 (UNDERVALUED)

    Still, the recent Q3 earnings miss with lower home closing revenue and softer gross margins, together with more cautious external analyst sentiment, could challenge the view that Meritage Homes is undervalued.

    Find out about the key risks to this Meritage Homes narrative.

    Next Steps

    Mixed signals around Meritage Homes are clear. Move quickly to conduct your own research, weigh both the concerns and the potential upside, and ground your view in the 3 key rewards and 1 important warning sign.

    Looking for more ideas beyond Meritage Homes?

    If Meritage Homes has sharpened your focus, now is the moment to widen your search and line up the next set of candidates before others move first.