DCF Tool

MTH

Meritage Homes Corp. – New Single-Family Housing Construction (except For-Sale Builders)
Meritage Homes is the sixth-largest public homebuilder in the United States, based on homes closed in 2020. Meritage offers a variety of homes that are designed with a focus on first-time and first move-up buyers in Arizona, California, Colorado, Texas, Florida, Georgia, North Carolina, South Carolina and Tennessee.
Analysis Results
Intrinsic Value $2,146.24
Latest Price $87.97
Relative Value 96% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 52.5%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.3%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 52.5%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 1.0 0.932
2023 1.53 1.32
2024 2.33 1.88
2025 3.55 2.67
2026 5.41 3.8
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 104 billion. This corresponds to a present value of 67.9 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 10.6 billion. Adding in the terminal value gives a total present value of 78.5 billion.

There are presently 36.6 million outstanding shares, so the intrinsic value per share is 2146.24.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 765,883,000
Current Cash 618,335,000
Current Liabilities 569,725,000
Current Debt 0
Non-Cash Working Capital (NCWC) -422,177,000
Change in NCWC -52,559,000
EBIT 968,476,000
Tax Provision 217,390,000
Depreciation and Amortization 26,245,000
Capital Expenditure -25,664,000
Unlevered Free Cash Flow 696,002,083
Current Assets 844,194,000
Current Cash 745,621,000
Current Liabilities 468,191,000
Current Debt 0
Non-Cash Working Capital (NCWC) -369,618,000
Change in NCWC -87,063,000
EBIT 529,081,000
Tax Provision 110,091,000
Depreciation and Amortization 31,052,000
Capital Expenditure -19,932,000
Unlevered Free Cash Flow 343,972,392
Current Assets 407,958,000
Current Cash 319,466,000
Current Liabilities 371,047,000
Current Debt 0
Non-Cash Working Capital (NCWC) -282,555,000
Change in NCWC -25,173,000
EBIT 307,373,000
Tax Provision 53,282,000
Depreciation and Amortization 27,923,000
Capital Expenditure -24,385,000
Unlevered Free Cash Flow 231,677,202
Current Assets 388,751,000
Current Cash 311,466,000
Current Liabilities 334,667,000
Current Debt 0
Non-Cash Working Capital (NCWC) -257,382,000
Change in NCWC 53,930,000
EBIT 273,423,000
Tax Provision 55,922,000
Depreciation and Amortization 26,966,000
Capital Expenditure -33,415,000
Unlevered Free Cash Flow 266,922,905
Current Assets 250,063,000
Current Cash 170,746,000
Current Liabilities 390,629,000
Current Debt 0
Non-Cash Working Capital (NCWC) -311,312,000
Change in NCWC -41,785,000
EBIT 244,967,000
Tax Provision 104,264,000
Depreciation and Amortization 16,704,000
Capital Expenditure -18,096,000
Unlevered Free Cash Flow 98,600,995
Current Assets 202,057,000
Current Cash 131,702,000
Current Liabilities 339,882,000
Current Debt 0
Non-Cash Working Capital (NCWC) -269,527,000
Change in NCWC -23,023,000
EBIT 218,279,000
Tax Provision 68,519,000
Depreciation and Amortization 15,978,000
Capital Expenditure -16,662,000
Unlevered Free Cash Flow 125,984,185
Current Assets 319,504,000
Current Cash 262,208,000
Current Liabilities 303,800,000
Current Debt 0
Non-Cash Working Capital (NCWC) -246,504,000
Change in NCWC -95,963,000
EBIT 206,375,000
Tax Provision 60,726,000
Depreciation and Amortization 14,241,000
Capital Expenditure -16,092,000
Unlevered Free Cash Flow 42,414,775
Current Assets 224,233,000
Current Cash 103,333,000
Current Liabilities 271,441,000
Current Debt 0
Non-Cash Working Capital (NCWC) -150,541,000
Change in NCWC 51,397,000
EBIT 207,008,000
Tax Provision 66,176,000
Depreciation and Amortization 11,614,000
Capital Expenditure -20,788,000
Unlevered Free Cash Flow 183,502,381
Current Assets 402,806,000
Current Cash 363,823,000
Current Liabilities 256,914,000
Current Debt 15,993,000
Non-Cash Working Capital (NCWC) -201,938,000
Change in NCWC -63,673,000
EBIT 194,755,000
Tax Provision 53,208,000
Depreciation and Amortization 9,934,000
Capital Expenditure -15,783,000
Unlevered Free Cash Flow 66,909,099
Current Assets 276,821,000
Current Cash 256,531,000
Current Liabilities 158,555,000
Current Debt 0
Non-Cash Working Capital (NCWC) -138,265,000
Change in NCWC -27,140,000
EBIT 67,423,000
Tax Provision -76,309,000
Depreciation and Amortization 8,196,000
Capital Expenditure -10,863,000
Unlevered Free Cash Flow 37,616,000

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