LGIH - Meritage Homes: An Overlooked Homebuilder In A Growth Trajectory

• MTH's business model as a 100% spec builder and its strategic shift to a pure entry-level player provide the company with a significant competitive advantage to capture the elevated Millennials demand.
• The 300 community count is attainable and supported by the recent $551 million investment in land acquisitions and development and the management's plan for a $2 billion investment in 2022.
• Despite MTH's high home price tag, which is close to the median home price of $390.5 thousand, the management plans to lower ASPs addressing any affordability concern.
• The current low land-optioned mix of 37% implies strong upside potential for enhanced profitability and financial flexibility.
• MTH maintains one of the lowest valuation multiples in the homebuilding sector and, considering its growth trajectory and improving fundamentals, is well-positioned to outperform its peers.

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