Is Meritage Homes Corp. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Meritage Homes Corp. has moved from fair to expensive, indicating that the company is overvalued. Key valuation ratios include a P/E ratio of 6, a price to book value of 0.89, and an EV to EBITDA ratio of 6.04, all of which suggest that the stock is trading at a premium compared to its earnings and asset values.
In comparison to its peers, Meritage Homes Corp. has a lower P/E ratio than Toll Brothers, Inc. at 11.10 and Taylor Morrison Home Corp. at 10.67, both of which are considered fairly valued or very attractive. The company's recent stock performance shows a 3-year return of 101.64%, which outperformed the S&P 500's 81.19% over the same period, but it has significantly underperformed in the 1-year and year-to-date comparisons, with returns of -30.53% and -8.80%, respectively, compared to the S&P 500's positive returns.