Should I Buy MTH? MTH 2026 Analysis

Should You Buy Meritage Homes Corp (MTH) Today? Analysis, Price Targets, and 2026 Outlook.

Conclusion

Hold

Latest Price

75.910

1 Day change

0.56%

52 Week Range

84.730

Analysis Updated At

2026/02/05

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Not a good buy right now: price is extended/overbought and sitting at/near resistance (~75.6–77.9), which is a poor entry for an impatient buyer.
Near-term setup looks mixed: momentum is positive, but risk/reward is unfavorable at current levels given resistance overhead and weakening fundamentals.
Options flow today leans defensive (heavy put volume), reinforcing caution for an immediate entry.
Intellectia signals do not provide a high-conviction timing edge today:
- AI Stock Picker: No signal on given stock today.
- SwingMax: No signal on given stock today.
Best stance: hold/avoid new buys at 75–76; only becomes attractive on a pullback closer to support (~71.9) or a clean breakout above ~77.9.

Technical Analysis

Trend/Momentum: MACD histogram is positive (0.106) and expanding, indicating bullish momentum is still building.
Overbought risk: RSI(6) at ~71.75 suggests the stock is overheated short-term, increasing pullback probability.
Moving averages: converging MAs suggest the trend is not strongly established; price is more prone to chop near levels.
Key levels:
- Pivot: 71.913 (first “better entry” area if it pulls back)
- Resistance: R1 75.611 (being tested now), then R2 77.895 (next breakout level)
- Support: S1 68.215, S2 65.931
Pattern-based projection (from similar candlesticks): ~70% chance of -0.89% next day, +2.88% next week, +9.24% next month (short-term dip risk before a potentially better swing).

Options Data

Bullish

Open Interest Put-Call Ratio

Bearish

Option Volume Put-Call Ratio

Positioning (Open Interest): Put/Call OI ratio 0.54 is bullish (more call OI than put OI), suggesting longer-lived positioning is constructive.
Flow (Today’s Volume): Put/Call volume ratio 4.28 is bearish/defensive (puts dominated today’s trading), often a short-term caution signal.
Volatility: IV 30d ~45.26 vs historical vol ~41.76; IV percentile ~79.28 indicates options are relatively expensive and uncertainty is elevated.
Activity: volume vs 30-day average is very high (~58x), signaling an event/positioning day rather than “normal” trading.

Technical Summary

Sell

Buy

Positive Catalysts

- Capital return catalyst: company plans ~$400M share buybacks in 2026, supportive for EPS/price floor if executed.
- Supply/industry framing: some sell-side (e.g., UBS) expects 2026 homebuilding conditions to improve vs 2025 as production moderates and housing supply remains constrained.
- Smart money signal: hedge funds are net buyers, with buying amount up ~123% QoQ.
- Operational outlook: 2026 closings expected to match 2025, with projected community count growth of ~5%–10% (stability + moderate growth).

Neutral/Negative Catalysts

- Fundamental deterioration in latest quarter: Q4 2025 results showed sharp YoY declines in revenue, net income, EPS, and gross margin.
- Margin pressure: adjusted gross margin cited at 19.3% vs 23.3% a year ago, impacted by land deal terminations/charges and other costs; broader land inflation remains a concern.
- Sell-side caution increasing: multiple price target cuts and a notable downgrade (BofA) citing downside risk to 2026 gross margin estimates.
- Options tape today is defensive (put-heavy volume), which can precede near-term weakness.
- No insider buying tailwind: insiders are reported neutral with no significant recent trend.

Financial Performance

Latest quarter: 2025/Q4.
Revenue: $1.436B, down ~11.47% YoY (top-line contraction).
Net income: $84.0M, down ~51.33% YoY (profitability down sharply).
EPS: 1.20, down ~49.15% YoY.
Gross margin (snapshot): down ~44.44% YoY (material margin compression).
Takeaway: the company is prioritizing capital redeployment (including buybacks), but the near-term growth/margin trend is negative, which reduces confidence in chasing the stock near resistance.

Growth

Profitability

Efficiency

Analyst Ratings and Price Target Trends

Recent trend: ratings have drifted more cautious overall, with several price target cuts and at least one downgrade.
Key changes:
- Keefe Bruyette (2026-02-03): PT cut to $76 from $78, Market Perform (cites challenging environment/outlook).
- UBS (2026-01-30, 2026-01-23): PT cuts (to $95, then $101) while maintaining Buy.
- BofA (2026-01-16): Downgrade to Neutral from Buy, PT raised to $82, citing margin downside risk and less compelling valuation post-rally.
- Citizens (2026-01-07): Initiated Outperform, PT $90 (valuation + dividend yield support).
- Evercore/JPMorgan (2025-12-04): In Line/Neutral with modest PT adjustments; JPM is cautious on 2026 sector fundamentals.
Wall Street pros: buybacks/dividend support, potential 2026 macro stabilization, top-tier volume builder profile.
Wall Street cons: affordability/demand concerns, land inflation and margin pressure, and sentiment increasingly focused on downside risk to 2026 estimates.
Influential/political trading check: no recent congress trading data available (last 90 days).

MTH Should I Buy