Taylor Morrison (TMHC) AI Stock Analysis

• Market Cap: $5.67B
• Dividend Yield: N/A
• Average Volume (3M): 1.16M
• Price to Earnings (P/E): 6.7
• Beta (1Y): 1.15
• Revenue Growth: 10.11%
• EPS Growth: 19.06%
• Country: US
• Employees: 3,000
• Sector: Consumer Cyclical
• Sector Strength: 63
• Industry: Residential Construction
• EPS (TTM): 8.28
• Shares Outstanding: 101,737,680
• 10 Day Avg. Volume: 1,079,111
• 30 Day Avg. Volume: 1,158,700
• PEG Ratio: 0.35
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.74
• Price to Cash Flow (P/CF): 3.50
• P/FCF Ratio: 3.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $74.71
• Price Target Upside: 33.94% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

Taylor Morrison demonstrates strong financial performance and a positive outlook from its earnings call, supported by strategic initiatives. While technical analysis indicates potential short-term weakness, the valuation suggests the stock may be undervalued. The company's strengths in financial health and strategic planning outweigh the risks, earning a solid overall score.

Positive Factors

Delivery Volume and Financial Metrics

Higher delivery volume, lower SG&A/sales and a lower tax rate than expected were the primary drivers of the core beat.

Order Growth

Unit orders rose 11%, beating the 5% estimate.

Negative Factors

Price Target

The price target drops slightly from $86 to $83 due to expectations of an at-best flat interest rate environment in 2025.

Taylor Morrison Business Overview & Revenue Model

Company Description

Taylor Morrison Home Corporation, together with its subsidiaries, operates as a public homebuilder in the United States. The company designs, builds, and sells single and multi-family detached and attached homes; and develops lifestyle and master-planned communities. It also develops and constructs multi-use properties consisting of commercial space, retail, and multi-family properties under the Urban Form brand name; and offers title insurance and closing settlement services, as well as financial services. In addition, the company operates under the Taylor Morrison, William Lyon Signature, and Darling Homes brand names in Arizona, California, Colorado, Florida, Georgia, Nevada, North and South Carolina, Oregon, Texas, and Washington. Taylor Morrison Home Corporation was founded in 1936 and is headquartered in Scottsdale, Arizona.

How the Company Makes Money

Taylor Morrison makes money primarily through the sale of homes, which includes both single-family and multi-family residential properties. The company's revenue model is centered on acquiring land, developing lots, and constructing homes that are then sold to consumers. Revenue is primarily generated from the home sales process, with additional income streams from the financing and insurance services offered to buyers. The company benefits from strategic partnerships with suppliers and contractors to manage costs and maintain quality standards. Additionally, Taylor Morrison may engage in joint ventures or partnerships to expand its market reach and leverage local expertise in different regions. Economic factors such as interest rates, housing demand, and government incentives for homebuyers also significantly impact the company's earnings.

Taylor Morrison Financial Statement Overview

Summary

Taylor Morrison's financial performance is robust, with strong revenue and profit growth. The income statement shows improved margins and strong profitability. The balance sheet is stable with increased equity and reduced debt, although high liabilities remain a concern. Cash flow is positive but could benefit from improved cash conversion efficiency.

Income Statement

Taylor Morrison demonstrates robust profitability with a consistent increase in gross and net profit margins. Gross profit margin increased from approximately 17.3% in 2020 to 24.3% in 2024. The net profit margin also improved significantly from around 4.0% in 2020 to 10.9% in 2024. Revenue growth was strong, with a notable increase of 10.1% from 2023 to 2024, indicating healthy business expansion. Both EBIT and EBITDA margins have strengthened, signaling efficient operations. Overall, the company's income statement reflects solid financial health and growth potential, although maintaining this trajectory amidst industry fluctuations is crucial.

Balance Sheet

The balance sheet of Taylor Morrison indicates strong equity growth, with stockholders' equity rising from $3.5 billion in 2020 to $5.87 billion in 2024. The debt-to-equity ratio showcases improvement, dropping significantly due to increased equity and reduced total debt in recent years. The equity ratio improved to 63.1% in 2024, highlighting the company's solid financial foundation. However, relatively high total liabilities pose a potential risk if not managed efficiently. Overall, the balance sheet is stable, though vigilance over liabilities is advised.

Cash Flow

Taylor Morrison's cash flow analysis reveals positive trends in free cash flow, with a remarkable increase from $363 million in 2019 to $173.75 million in 2024. The operating cash flow to net income ratio, however, declined from 4.6 in 2020 to 0.24 in 2024, indicating less cash generation from operations relative to net income. Despite these fluctuations, the company maintains a positive operating cash flow, which is crucial for sustaining business operations and investments. While the cash flow is generally solid, improved cash conversion efficiency would be beneficial.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
8.17B	7.42B	8.22B	7.50B	6.13B
	Gross Profit
1.98B	1.78B	2.09B	1.55B	1.04B
	EBIT
1.21B	1.08B	1.36B	826.92M	571.92M
	EBITDA
1.25B	1.12B	1.48B	919.52M	509.18M
	Net Income Common Stockholders
883.31M	768.93M	1.05B	663.03M	243.44M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
487.15M	798.57M	725.58M	834.93M	538.14M
	Total Assets
9.30B	8.67B	8.47B	8.73B	7.74B
	Total Debt
79.00M	2.10B	2.58B	3.40B	3.01B
	Net Debt
-408.15M	1.30B	1.86B	2.57B	2.48B
	Total Liabilities
3.42B	3.34B	3.82B	4.76B	4.14B
	Stockholders Equity
5.87B	5.31B	4.63B	3.93B	3.50B
Cash Flow		Free Cash Flow
173.75M	772.74M	1.08B	355.45M	1.09B
	Operating Cash Flow
210.08M	806.17M	1.11B	376.65M	1.12B
	Investing Cash Flow
-136.44M	-97.19M	-14.88M	-74.26M	-312.80M
	Financing Cash Flow
-393.57M	-628.51M	-1.20B	-155.00K	-604.94M

Taylor Morrison Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 55.78
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TMHC, the sentiment is Negative. The current price of 55.78 is below the 20-day moving average (MA) of 59.02, below the 50-day MA of 60.82, and below the 200-day MA of 64.43, indicating a bearish trend. The MACD of -1.38 indicates Positive momentum. The RSI at 41.03 is Neutral, neither overbought nor oversold. The STOCH value of 44.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TMHC.

Taylor Morrison Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PHM	74 Outperform	$19.06B	6.43	27.40%	0.89%	11.74%	25.66%
TMHC	73 Outperform	$5.67B	6.73	15.80%	―	10.11%	19.06%
MTH	73 Outperform	$4.60B	5.97	16.12%	2.43%	4.18%	7.50%
TOL	69 Neutral	$9.31B	6.44	20.38%	0.98%	5.86%	12.20%
LEN	68 Neutral	$27.61B	7.66	14.97%	1.90%	2.03%	-3.80%
NVR	66 Neutral	$21.39B	14.19	39.23%	―	10.81%	10.16%
Sector *	59 Neutral	$11.48B	10.33	-0.21%	4.02%	1.19%	-15.83%

Taylor Morrison Corporate Events

Taylor Morrison Announces Executive Leadership Transition

On March 13, 2025, Taylor Morrison Home Corporation announced the retirement of Darrell Sherman, Executive Vice President, Chief Legal Officer, and Secretary, effective May 31, 2025, after nearly 16 years of service. Sherman will be succeeded by Todd Merrill, currently Vice President and General Counsel of Operations, effective June 1, 2025. Sherman’s departure is due to his new role as a mission president for the Church of Jesus Christ of Latter-day Saints. The transition is expected to be smooth, with Merrill’s extensive experience within the company positioning him well to support Taylor Morrison’s future growth and strategic initiatives.

Taylor Morrison Strengthens Board with Strategic Appointments

Taylor Morrison has appointed Heather Ostis, a seasoned supply chain executive from Starbucks, to its Board of Directors effective March 1, 2025. Ostis’s extensive experience in global procurement and supply chain management is seen as a strategic asset for the company as it navigates the complexities of homebuilding operations. This appointment, along with the recent addition of Fletcher Previn, underscores Taylor Morrison’s commitment to enhancing its board’s expertise in critical areas such as supply chain and IT, reflecting its focus on evolving consumer demographics and market trends.