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Taylor Morrison Home (TMHC) Gains But Lags Market: What You Should Know

Zacks Equity Research

In the latest trading session, Taylor Morrison Home (TMHC) closed at $26.04, marking a +0.54% move from the previous day. This move lagged the S&P 500's daily gain of 1.09%. Elsewhere, the Dow gained 1.21%, while the tech-heavy Nasdaq added 1.34%.

Coming into today, shares of the home builder had gained 5.67% in the past month. In that same time, the Construction sector gained 1.96%, while the S&P 500 lost 1.17%.

Wall Street will be looking for positivity from TMHC as it approaches its next earnings report date. On that day, TMHC is projected to report earnings of $0.66 per share, which would represent a year-over-year decline of 20.48%. Meanwhile, our latest consensus estimate is calling for revenue of $1.15 billion, up 10.71% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.77 per share and revenue of $4.73 billion, which would represent changes of +4.53% and +11.97%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for TMHC. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.36% higher. TMHC is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that TMHC has a Forward P/E ratio of 9.36 right now. For comparison, its industry has an average Forward P/E of 10.76, which means TMHC is trading at a discount to the group.

Also, we should mention that TMHC has a PEG ratio of 1.73. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Building Products - Home Builders stocks are, on average, holding a PEG ratio of 1.2 based on yesterday's closing prices.

The Building Products - Home Builders industry is part of the Construction sector. This group has a Zacks Industry Rank of 22, putting it in the top 9% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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