Taylor Morrison (TMHC): Has the Market Overlooked This 17.8% Valuation Discount?

Taylor Morrison Home (TMHC) has quietly delivered a strong multi year run, but recent choppy trading has some investors asking whether this homebuilder still offers upside or if it is time to lock in gains.

See our latest analysis for Taylor Morrison Home.

At around $61.02 per share, recent softness in Taylor Morrison Home’s 7 day share price return contrasts with its solid multi year total shareholder returns. This suggests momentum has cooled slightly even though the longer term story still looks constructive.

If Taylor Morrison’s run has you rethinking your watchlist, this could be a good moment to explore fast growing stocks with high insider ownership for other compelling ideas.

With the stock trading near $61, yet still sitting at a near 20 percent estimated discount to intrinsic value and a sizable gap to analyst targets, should investors view this pullback as a fresh entry point or assume the market is already pricing in Taylor Morrison’s next leg of growth?

Most Popular Narrative: 17.8% Undervalued

With Taylor Morrison Home last closing at $61.02 against a narrative fair value of $74.25, the current discount implies investors may be underestimating its earnings staying power.

The analysts have a consensus price target of $72.516 for Taylor Morrison Home based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $85.0, and the most bearish reporting a price target of just $65.0.

Read the complete narrative.

Want to see how modest revenue slippage, steady margins and a richer earnings multiple still add up to higher value than today’s price suggests? The full narrative unpacks the precise profit path, valuation reset and buyback assumptions that power this fair value upgrade, and the numbers may surprise you.

Result: Fair Value of $74.25 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, resilient gross margins and a well diversified product mix could sustain earnings better than expected and challenge assumptions of muted growth and limited upside.

Find out about the key risks to this Taylor Morrison Home narrative.

Build Your Own Taylor Morrison Home Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a custom view in just minutes, Do it your way.

A great starting point for your Taylor Morrison Home research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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