Meritage HomesFRA:MEY +0.70%81 Interest Coverage is 112.63 as of Mar. 2026, which is 54% below its 10-year median of 243.03. GuruFocus rates FRA:MEY with a GF Score™ of 81/100 and a GF Value™ of €58.31 (Modestly Overvalued). The stock has 11 warning signs investors should review. Among 78 Homebuilding & Construction companies, Meritage Homes ranks better than 89.74% on this metric.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's
Operating Income
by its Interest Expense. Meritage Homes's
Operating Income
for the
three
months ended in Mar. 2026 was €57 Mil. Meritage Homes's Interest Expense for the
three
months ended in Mar. 2026 was €-1 Mil.
Meritage Homes's interest coverage for the quarter that ended in Mar. 2026 was 112.63.
The higher the ratio, the stronger the company's financial strength is.
The historical rank and industry rank for Meritage Homes's Interest Coverage or its related term are showing as below:
FRA:MEY'
s Interest Coverage Range Over the Past 10 Years
Min: 36.72 Med: 243.03 Max: 31381.59
Current: 776.73
FRA:MEY's Interest Coverage is ranked better than 89.74% of 78
companies
in the Homebuilding & Construction industry
Industry Median: 8.305
vs FRA:MEY: 776.73
Meritage Homes (FRA:MEY) Interest Coverage Explanation
Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.
Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .
Meritage Homes Interest Coverage Related Terms
Meritage Homes Interest Coverage Historical Data
* Premium members only.
The historical data trend for Meritage Homes's Interest Coverage can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.
FRA:MEY vs IBP, SKY, CVCO: Interest Coverage Comparison
For the Residential Construction subindustry, Meritage Homes's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Meritage Homes Interest Coverage vs Homebuilding & Construction Industry
For the Homebuilding & Construction industry and Consumer Cyclical sector, Meritage Homes's Interest Coverage distribution charts can be found below:
* The bar in red indicates where Meritage Homes's Interest Coverage falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Meritage Homes (FRA:MEY) has a Interest Coverage of 112.63 as of Mar. 2026. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on Meritage Homes and its competitors. This is 54% below median its historical median of 243.03. Over the past decade, Meritage Homes' Interest Coverage has ranged from 36.72 to 31,381.59. According to the industry distribution chart, Meritage Homes ranks #8 out of 78 companies in the Homebuilding & Construction industry, placing it in the top 10.3%.
Is Meritage Homes' Interest Coverage too high?
Meritage Homes' current Interest Coverage of 112.63 is 54% below median its 10-year median of 243.03. Over the past 10 years, this metric has ranged from a low of 36.72 to a high of 31,381.59. The Homebuilding & Construction industry median Interest Coverage is 8.31. Meritage Homes' value of 112.63 is 1256.2% above this industry median. Based on the distribution chart, Meritage Homes ranks #8 out of 78 companies in the Homebuilding & Construction industry, which is in the top quartile — a strong position relative to peers. Overall, Meritage Homes has a GF Score™ of 81/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Meritage Homes' Interest Coverage compare to IBP and SKY?
According to the Homebuilding & Construction industry distribution chart, Meritage Homes ranks #8 out of 78 companies for Interest Coverage. This places Meritage Homes in the top 10% of its industry — outperforming the majority of peers. The industry median Interest Coverage is 8.31. Meritage Homes' value of 112.63 is 1256.2% above this benchmark. Historically, Meritage Homes' own Interest Coverage has ranged from 36.72 to 31,381.59 over the past decade. While the company's 10-year median is 243.03 vs. the industry median of 8.31, Meritage Homes has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Interest Coverage for a Homebuilding & Construction company?
The median Interest Coverage among Homebuilding & Construction companies is 8.31, based on 78 companies in the industry. Companies in the top quartile (top 25%) have a Interest Coverage significantly above this median, while those in the bottom quartile fall well below. However, Interest Coverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Meritage Homes's current Interest Coverage of 112.63 is 1256.2% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Interest Coverage mean?
A high Interest Coverage can signal that a stock is expensive relative to its fundamentals. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on Meritage Homes and its competitors. For the Homebuilding & Construction industry, the median Interest Coverage is 8.31 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Meritage Homes's current Interest Coverage is 112.63, which is 54% below median its own 10-year median of 243.03. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Meritage Homes stock overvalued right now?
Based on GuruFocus' analysis, Meritage Homes (FRA:MEY) is currently considered Modestly Overvalued. The stock's GF Value™ is €58.31, compared to a current price of €72.00 — trading 23.5% above its estimated fair value. The current Interest Coverage is 112.63, which is 54% below median its 10-year median of 243.03 and 1256.2% above the Homebuilding & Construction industry median of 8.31. Meritage Homes' overall GF Score™ is 81/100 with 11 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Interest Coverage calculated?
Interest Coverage is calculated from a company's financial statements. For Meritage Homes (FRA:MEY), the current Interest Coverage is 112.63 as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Meritage Homes (FRA:MEY) Overvalued in 2026?
Based on GuruFocus' analysis, Meritage Homes stock appears to be overvalued.
The current stock price of €72.00 is trading 23.5% above its estimated GF Value™ of €58.31.
GuruFocus considers Meritage Homes to be Modestly Overvalued.
Key valuation signals for FRA:MEY:
Interest Coverage: 112.63 (54% below median its 10-year median of 243.03)
GF Value™: €58.31 vs. price of €72.00 (23.5% above fair value)
Industry Position: 1256.2% above the Homebuilding & Construction median (#8 of 78)
No single metric tells the full story. See the FRA:MEY stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Meritage Homes Corp is engaged as a designer and builder of single-family attached and detached homes. It has operations in three regions: West, Central, and East, comprising twelve states: Arizona, California, Colorado, Utah, Tennessee, Texas, Alabama, Florida, Georgia, Mississippi, North Carolina, and South Carolina. The company operates with two principal business segments: homebuilding and financial services. The homebuilding segments are engaged in the business of acquiring and developing land, constructing homes, marketing and selling those homes, and providing warranty and customer services, and the financial services segment offers title and escrow, mortgage, and insurance services. The company generates key revenue from the Homebuilding segment.
81GF Score
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