Looking back on home builders stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Taylor Morrison Home (NYSE: TMHC) and its peers.

Traditionally, homebuilders have built competitive advantages with economies of scale that lead to advantaged purchasing and brand recognition among consumers. Aesthetic trends have always been important in the space, but more recently, energy efficiency and conservation are driving innovation. However, these companies are still at the whim of the macro, specifically interest rates that heavily impact new and existing home sales. In fact, homebuilders are one of the most cyclical subsectors within industrials.

The 11 home builders stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 2.8% while next quarter’s revenue guidance was in line.

Thankfully, share prices of the companies have been resilient as they are up 8.9% on average since the latest earnings results.

Taylor Morrison Home (NYSE: TMHC)

Named “America’s Most Trusted Home Builder” in 2019, Taylor Morrison Home (NYSE: TMHC) builds single family homes and communities across the United States.

Taylor Morrison Home reported revenues of $2.10 billion, down 1.2% year on year. This print exceeded analysts’ expectations by 3.4%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.

"We are pleased to report strong third quarter results despite the continuation of challenging market conditions. Driven by our diversified portfolio and team's careful calibration of inventory, pricing and pace across our well-located communities, we once again met or exceeded our guidance on all key metrics, including home closings volume, price and gross margin. The ongoing execution of our balanced operating strategy has allowed us to maintain healthy performance even as we have adjusted pricing and incentives, particularly in entry-level price points. Combined with a thoughtful approach to land-lighter financing tools and effective cost management, our business is generating strong bottom-line earnings, cash flow and returns for our shareholders," said Sheryl Palmer, Taylor Morrison CEO and Chairman.

Interestingly, the stock is up 3.1% since reporting and currently trades at $64.56.

Is now the time to buy Taylor Morrison Home? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Champion Homes (NYSE: SKY)

Founded in 1951, Champion Homes (NYSE: SKY) is a manufacturer of modular homes and buildings in North America.

Champion Homes reported revenues of $684.4 million, up 11% year on year, outperforming analysts’ expectations by 6.9%. The business had an incredible quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.

Champion Homes achieved the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 27.2% since reporting. It currently trades at $84.63.

Is now the time to buy Champion Homes? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Meritage Homes (NYSE: MTH)

Originally founded in 1985 in Arizona as Monterey Homes, Meritage Homes (NYSE: MTH) is a homebuilder specializing in designing and constructing energy-efficient and single-family homes in the US.

Meritage Homes reported revenues of $1.42 billion, down 10.8% year on year, falling short of analysts’ expectations by 3.4%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue estimates and a significant miss of analysts’ adjusted operating income estimates.

Meritage Homes delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 5.1% since the results and currently trades at $74.68.

Read our full analysis of Meritage Homes’s results here.

KB Home (NYSE: KBH)

The first homebuilder to be listed on the NYSE, KB Home (NYSE: KB) is a homebuilding company targeting the first-time home buyer and move-up buyer markets.

KB Home reported revenues of $1.62 billion, down 7.5% year on year. This result beat analysts’ expectations by 1.2%. Zooming out, it was a slower quarter as it logged a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ backlog estimates.

KB Home had the weakest full-year guidance update among its peers. The stock is up 4.2% since reporting and currently trades at $65.84.

Read our full, actionable report on KB Home here, it’s free for active Edge members.

Installed Building Products (NYSE: IBP)

Founded in 1977, Installed Building Products (NYSE: IBP) is a company specializing in the installation of insulation, waterproofing, and other complementary building products for residential and commercial construction.

Installed Building Products reported revenues of $778.2 million, up 2.3% year on year. This print topped analysts’ expectations by 4%. It was a stunning quarter as it also put up a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.

The stock is up 11.5% since reporting and currently trades at $265.33.

Read our full, actionable report on Installed Building Products here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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