Meritage Homes (FRA:MEY) GF Value Rank : 3 (As of Jun. 22, 2024)

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What is Meritage Homes GF Value Rank?

Meritage Homes has the GF Value Rank of 3.

The GF Value Rank is determined by the price-to-GF-Value (P/GF Value) ratio, a proprietary metric calculated based on historical multiples along with an adjustment factor based on a company's past returns and growth and future estimates of the business' performance.

GuruFocus found that for valuation, we cannot simply give stocks a better GF Value rank simply because they have a lower P/GF Value ratio. Backtesting shows that over the long term, the two worst-performing groups are the most expensive group (with the highest P/GF Value ratio) and the least expensive group (with the lowest P/GF Value ratio).

We can understand why the most expensive group underperforms. We were initially puzzled by the underperformance of the least expensive group, but we realized there is a reason why some stocks are super cheap. If they look too undervalued, it is often because the businesses behind them are poor quality. The market realized this and gave them low valuations. In a way, the market is efficient.

After multiple backtesting analyses, we granted the stocks in third-cheapest percentile the highest GF Value rank, as they have performed the best over a full market cycle. Stock performance is actually not as sensitive to valuation as it is to growth and profitability. On average, the companies in the 20%-50% valuation groups have similar performances. Therefore, we should avoid the most expensive and the least expensive stocks. We can be more tolerant of valuation.

Please click GF Score to see more details on the GF Score's 5 Key Aspects of Analysis.

Competitive Comparison of Meritage Homes's GF Value Rank

For the Residential Construction subindustry, Meritage Homes's GF Value Rank, along with its competitors' market caps and GF Value Rank 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's GF Value Rank Distribution in the Homebuilding & Construction Industry

For the Homebuilding & Construction industry and Consumer Cyclical sector, Meritage Homes's GF Value Rank distribution charts can be found below:

* The bar in red indicates where Meritage Homes's GF Value Rank falls into.

Meritage Homes GF Value Rank Related Terms

Thank you for viewing the detailed overview of Meritage Homes's GF Value Rank provided by GuruFocus.com. Please click on the following links to see related term pages.

Meritage Homes (FRA:MEY) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Homebuilding & Construction » Meritage Homes Corp (FRA:MEY) » Definitions » GF Value Rank

Comparable Companies

Traded in Other Exchanges

MTH:USA

Address

8800 East Raintree Drive, Suite 300, Scottsdale, AZ, USA, 85260

Website

https://www.meritagehomes.com

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, which are comprised of ten states: Arizona, California, Colorado, Texas, Florida, Georgia, North Carolina, South Carolina, Tennessee, and Utah. 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 offer title and escrow, mortgage, and insurance services. The company generates key revenue from the homebuilding segment.

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