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

Zacks Equity Research

Taylor Morrison Home (TMHC) closed at $27.30 in the latest trading session, marking a +0.37% move from the prior day. This move lagged the S&P 500's daily gain of 0.41%. At the same time, the Dow added 0.57%, and the tech-heavy Nasdaq gained 0.7%.

Prior to today's trading, shares of the home builder had gained 5.51% over the past month. This has lagged the Construction sector's gain of 5.76% and outpaced the S&P 500's gain of 2.04% in that time.

TMHC will be looking to display strength as it nears its next earnings release, which is expected to be October 30, 2019. In that report, analysts expect TMHC to post earnings of $0.66 per share. This would mark a year-over-year decline of 20.48%. Our most recent consensus estimate is calling for quarterly revenue of $1.15 billion, up 10.71% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.77 per share and revenue of $4.73 billion. These totals would mark changes of +4.53% and +11.97%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for TMHC. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. TMHC is currently sporting a Zacks Rank of #1 (Strong Buy).

Valuation is also important, so investors should note that TMHC has a Forward P/E ratio of 9.83 right now. For comparison, its industry has an average Forward P/E of 11.28, which means TMHC is trading at a discount to the group.

Also, we should mention that TMHC has a PEG ratio of 1.82. 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. The Building Products - Home Builders industry currently had an average PEG ratio of 1.26 as of yesterday's close.

The Building Products - Home Builders industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 8, which puts it in the top 4% 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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