Looking back on home builders stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Meritage Homes (NYSE: MTH) and its peers.

Traditionally, homebuilders have built competitive advantages with economies of scale that lead to advantaged purchasing and brand recognition among consumers. Aesthetic trends have always been important in the space, but more recently, energy efficiency and conservation are driving innovation. However, these companies are still at the whim of the macro, specifically interest rates that heavily impact new and existing home sales. In fact, homebuilders are one of the most cyclical subsectors within industrials.

The 11 home builders stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 2.8% while next quarter’s revenue guidance was in line.

Thankfully, share prices of the companies have been resilient as they are up 7% on average since the latest earnings results.

Weakest Q3: Meritage Homes (NYSE: MTH)

Originally founded in 1985 in Arizona as Monterey Homes, Meritage Homes (NYSE: MTH) is a homebuilder specializing in designing and constructing energy-efficient and single-family homes in the US.

Meritage Homes reported revenues of $1.42 billion, down 10.8% year on year. This print fell short of analysts’ expectations by 3.4%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ revenue and adjusted operating income estimates.

"Meritage successfully navigated a challenging third quarter, exceeding 2024 sales volumes and ending the quarter with our highest ever community count of 334, which was a 20% increase year-over-year. We leaned into our strategy, providing our customers certainty amidst an evolving housing market with a healthy selection of available inventory and payment affordability solutions," said Steven J. Hilton, executive chairman of Meritage Homes.

Meritage Homes delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 2.7% since reporting and currently trades at $72.96.

Read our full report on Meritage Homes here, it’s free for active Edge members.

Best Q3: Champion Homes (NYSE: SKY)

Founded in 1951, Champion Homes (NYSE: SKY) is a manufacturer of modular homes and buildings in North America.

Champion Homes reported revenues of $684.4 million, up 11% year on year, outperforming analysts’ expectations by 6.9%. The business had an incredible quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.

Champion Homes delivered the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 28.5% since reporting. It currently trades at $85.47.

Is now the time to buy Champion Homes? Access our full analysis of the earnings results here, it’s free for active Edge members.

LGI Homes (NASDAQ: LGIH)

Based in Texas, LGI Homes (NASDAQ: LGIH) is a homebuilding company specializing in constructing affordable, entry-level single-family homes in desirable communities across the United States.

LGI Homes reported revenues of $396.6 million, down 39.2% year on year, exceeding analysts’ expectations by 1.6%. Still, it was a softer quarter as it posted a significant miss of analysts’ adjusted operating income estimates.

LGI Homes delivered the slowest revenue growth in the group. Interestingly, the stock is up 28.4% since the results and currently trades at $52.28.

Read our full analysis of LGI Homes’s results here.

Installed Building Products (NYSE: IBP)

Founded in 1977, Installed Building Products (NYSE: IBP) is a company specializing in the installation of insulation, waterproofing, and other complementary building products for residential and commercial construction.

Installed Building Products reported revenues of $778.2 million, up 2.3% year on year. This number topped analysts’ expectations by 4%. Overall, it was a stunning quarter as it also put up a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.

The stock is up 11.8% since reporting and currently trades at $266.08.

Read our full, actionable report on Installed Building Products here, it’s free for active Edge members.

Taylor Morrison Home (NYSE: TMHC)

Named “America’s Most Trusted Home Builder” in 2019, Taylor Morrison Home (NYSE: TMHC) builds single family homes and communities across the United States.

Taylor Morrison Home reported revenues of $2.10 billion, down 1.2% year on year. This print beat analysts’ expectations by 3.4%. It was a strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.

The stock is up 1.1% since reporting and currently trades at $63.26.

Read our full, actionable report on Taylor Morrison Home here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

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