Taylor Morrison Home (TMHC) is back on investors radar after a strong third quarter, with revenue topping expectations and key housing metrics holding up in a tricky market for homebuilders.
See our latest analysis for Taylor Morrison Home.
The stock has cooled off a bit after the earnings pop, with a recent pullback leaving the share price at $62.44. That comes on top of a resilient year to date share price return and a standout three year total shareholder return of roughly 105 percent, suggesting longer term momentum is still very much intact even if near term sentiment is catching its breath.
If this kind of housing cycle story has you thinking about where else growth might surprise, it is worth exploring fast growing stocks with high insider ownership as a curated list of potential next ideas.
With earnings beating expectations and the share price still trading at a double digit discount to analyst targets and intrinsic value estimates, is Taylor Morrison quietly undervalued, or is the market already baking in future growth?
Most Popular Narrative: 15.2% Undervalued
With Taylor Morrison Home last closing at $62.44 against a narrative fair value of $73.63, the current setup points to a meaningful valuation gap driven by specific long term assumptions.
The analysts have a consensus price target of $72.516 for Taylor Morrison Home based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $85.0, and the most bearish reporting a price target of $65.0.
Want to see what kind of revenue glide path, profit margin profile, and future earnings multiple are baked into this gap, and how those assumptions stack up over the next few years? The numbers behind this narrative might surprise you, especially given the modest growth outlook and still supportive sector backdrop.
Result: Fair Value of $73.63 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, resilient margins and diversified product lines could support more stable earnings and demand, challenging the notion that growth and profitability must drift lower.
Find out about the key risks to this Taylor Morrison Home narrative.
Build Your Own Taylor Morrison Home Narrative
If you see the story differently or prefer to dig into the numbers yourself, you can build a custom view in just minutes: Do it your way
A great starting point for your Taylor Morrison Home research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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