Discounted Cash Flow (DCF) Analysis Unlevered

Meritage Homes Corporation (MTH)

$86.3

+0.19 (+0.22%)

All numbers are in Millions, Currency in USD

Stock DCF: -4.79 | 86.3 | overvalue

Operating Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	3,254.83	3,543.92	3,677.84	4,506.31	5,147.33	5,783.17	6,497.56	7,300.19	8,201.97	9,215.15
Revenue (%)
EBITDA	268.08	311.01	339.24	566.79	981.40	669.46	752.15	845.07	949.46	1,066.74
EBITDA (%)
EBIT	251.37	284.04	311.31	535.74	955.15	632.07	710.15	797.87	896.43	1,007.17
EBIT (%)
Depreciation	16.70	26.97	27.92	31.05	26.24	37.39	42	47.19	53.02	59.57
Depreciation (%)

Balance Sheet Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Total Cash	170.75	311.47	319.47	745.62	624.10	594.41	667.84	750.34	843.03	947.17
Total Cash (%)
Account Receivables	79.32	77.28	88.49	98.57	147.55	139.69	156.95	176.34	198.12	222.60
Account Receivables (%)
Inventories	2,731.38	2,742.62	2,744.36	2,778.04	3,734.41	4,280.98	4,809.81	5,403.95	6,071.50	6,821.50
Inventories (%)
Accounts Payable	140.52	128.17	155.02	175.25	216.01	234.04	262.95	295.43	331.92	372.93
Accounts Payable (%)
Capital Expenditure	-18.10	-33.41	-24.38	-19.93	-25.66	-35.89	-40.32	-45.30	-50.90	-57.19
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 86.3
Beta	1.617
Diluted Shares Outstanding	37.72
Cost of Debt
Tax Rate	22.77
After-tax Cost of Debt	0.02%
Risk-Free Rate
Market Risk Premium
Cost of Equity	10.510
Total Debt	1,186.21
Total Equity	3,255.06
Total Capital	4,441.27
Debt Weighting	26.71
Equity Weighting	73.29
Wacc

Build Up Free Cash

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	3,254.83	3,543.92	3,677.84	4,506.31	5,147.33	5,783.17	6,497.56	7,300.19	8,201.97	9,215.15
EBITDA	268.08	311.01	339.24	566.79	981.40	669.46	752.15	845.07	949.46	1,066.74
EBIT	251.37	284.04	311.31	535.74	955.15	632.07	710.15	797.87	896.43	1,007.17
Tax Rate	42.12%	19.74%	17.59%	20.63%	22.77%	24.57%	24.57%	24.57%	24.57%	24.57%
EBIAT	145.48	227.96	256.56	425.20	737.69	476.77	535.66	601.83	676.17	759.70
Depreciation	16.70	26.97	27.92	31.05	26.24	37.39	42	47.19	53.02	59.57
Accounts Receivable	-	2.03	-11.21	-10.08	-48.98	7.85	-17.26	-19.39	-21.78	-24.47
Inventories	-	-11.24	-1.74	-33.68	-956.37	-546.57	-528.82	-594.15	-667.54	-750
Accounts Payable	-	-12.35	26.86	20.23	40.76	18.03	28.91	32.48	36.49	41
Capital Expenditure	-18.10	-33.41	-24.39	-19.93	-25.66	-35.89	-40.32	-45.30	-50.90	-57.19
UFCF	144.09	199.96	274.01	412.79	-226.31	-42.43	20.17	22.66	25.46	28.61
WACC
PV UFCF						-39.39	17.39	18.14	18.92	19.74
SUM PV UFCF										34.79

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.71
Free cash flow (t + 1)	29.18
Terminal Value	511.07
Present Value of Terminal Value	352.53

Intrinsic Value

Enterprise Value	387.32
Net Debt	567.87
Equity Value	-180.55
Shares Outstanding	37.72
Equity Value Per Share	-4.79