Taylor Morrison Home Corporation ( TMHC ) has essentially gone nowhere since I wrote about it as my top pick for the bearish-to-bullish reversal in the stocks of home builders . That reversal lasted justDr. Duru has blogged about financial markets since the year 2000. A veteran of the dot-com bubble and bust, the financial crisis, and the coronavirus pandemic, he fully appreciates the value in trading and investing around the extremes of market behavior. In this spirit, his blog "One-Twenty Two" delivers a ...

Financial Performance - Home closings revenue for 2025 reached $7.8 billion with a gross margin of 22.5%[18] - The company achieved 12,997 home closings and net sales orders of 11,074[18] - Approximately $1.8 billion of liquidity was reported, indicating strong financial health[18] - Home closings revenue for Q1 2025 was 24%, Q2 was 25%, Q3 was 26%, and Q4 was 25%, indicating a stable revenue stream throughout the year[56] - Income before income taxes for Q1 2025 was 27%, Q2 was 25%, Q3 was 26%, and Q4 was 22%, reflecting fluctuations in profitability across quarters[56] - The company experienced a cancellation rate of 13.2% for the year ended December 31, 2025, compared to 9.5% in 2024 and 12.1% in 2023, indicating an increase in buyer apprehension[97] - The Federal Reserve raised interest rates 11 times from 2022 to 2024, leading to increased cancellations and a negative impact on net sales orders[87] Capital Management - 6.5 million common shares were repurchased for $381.0 million, reflecting a commitment to returning capital to shareholders[18] - The company repurchased a total of 6,452,728 shares of common stock in 2025 and 5,607,852 shares in 2024[215] - The average price paid per share for the total repurchased shares in the quarter ended December 31, 2025, was $59.39[216] - The company has a stock repurchase program authorized for up to $1 billion through December 31, 2027[216] Business Operations - The company operates a "Build-to-Rent" business under the Yardly brand, focusing on rental communities across multiple markets[42] - The company operates a mortgage lending operation, TMHF, which funds loans through warehouse credit facilities and earns revenue from originating, selling, and servicing residential mortgage loans[57] - TMHF has expanded its correspondent relationships, enhancing stability and consistency in the loan origination process[58] - The company employs approximately 3,000 full-time equivalent employees as of December 31, 2025, with no employees covered by collective bargaining agreements[74] - The company focuses on attracting and retaining talent, offering competitive compensation packages and a range of benefits, including medical, dental, and vision insurance[77] Market Conditions - The company faces risks from economic conditions, including rising interest rates, high inflation, and supply chain interruptions, which could adversely affect its business[85] - The U.S. unemployment rate was reported at 4.4% as of December 2025, which may affect demand for new homes and increase loan delinquencies[109] - Labor shortages and increased labor costs could lead to delays and increased costs in developing communities and building homes, adversely affecting operating results[94] - The company operates in a highly competitive environment, facing competition from both large national builders and local homebuilders, which could affect land acquisition and pricing strategies[106] Regulatory and Compliance Risks - The company is subject to various local, state, and federal regulations that can impact its operations, including zoning, building design, and environmental laws[64] - The company faces potential liabilities and costs from existing and future litigation, including a recent judgment of $64.7 million related to club membership fees[155] - Compliance with expanding sustainability regulations may raise ongoing costs and adversely affect operational results and stock price[115] - The company is subject to numerous federal, state, and local regulations that could adversely affect its financial services business, including underwriting guidelines and maximum loan amounts[167] Sustainability and Community Relations - The company has a commitment to sustainability, integrating sustainable values into its business practices and highlighting these efforts in its Sustainability and Belonging Report[70] - Negative publicity or poor community relations could adversely affect sales and revenue, as unfavorable media reports may impact consumer perception[151] Cybersecurity - The company maintains a comprehensive cybersecurity program, conducting quarterly risk assessments and engaging independent third parties semi-annually[191][192] - The Chief Information Officer (CIO) has over 25 years of experience in IT, with more than 20 years at the company, leading cybersecurity efforts[197] - The company has developed mitigation plans for material cybersecurity risks, including additional technology controls and increased training[193] - The company's cybersecurity governance includes quarterly reviews and biannual updates to the Board of Directors on the state of the cybersecurity program[199][201] Financial Risks - The company’s substantial debt could limit its ability to fulfill debt-related obligations and may require refinancing on unfavorable terms[172] - A breach of restrictive covenants in the company’s debt agreements could lead to acceleration of debt repayment obligations[178] - The company has exposure to credit risks if it is unable to sell originated loans in the secondary mortgage market, which could negatively impact liquidity[164] - The company’s ability to access capital may be limited due to constriction in capital markets, potentially delaying or abandoning development plans[171]

Core Insights - Taylor Morrison launches a new brand platform, "Homes Built for Real Life," focusing on authentic, everyday moments rather than idealized portrayals of homeownership [1] - The campaign reflects consumer preferences for relatable content and aims to resonate with younger generations, particularly Gen Z and Millennials [1] Consumer Preferences - Third-party research indicates a strong preference for honest, everyday moments over staged content [1] - Gen Z homebuyers increased from 6% in 2024 to 9% in 2025, highlighting a growing market segment [1] - Millennials, the largest demographic for Taylor Morrison, comprised approximately 30% of U.S. social media users in 2025, with nearly 70% using platforms like Instagram, Facebook, and TikTok daily [1] Design Philosophy - Taylor Morrison's home designs are informed by customer research and over a century of experience, featuring flexible layouts that adapt to real-life routines [1] - Kitchens are designed for gathering, and floor plans reflect natural movement throughout the day, aligning with the brand's commitment to supporting everyday living [1] Company Overview - Taylor Morrison is a leading homebuilder and developer in the U.S., serving a diverse range of consumers, including first-time buyers and luxury homebuyers [1] - The company has been recognized as America's Most Trusted® Builder since 2016, emphasizing its commitment to sustainable operations [1]

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Core Insights - Taylor Morrison Home Corporation emphasizes its competitive advantage through a strong consumer focus, which has led to recognition as America's most trusted builder for eleven consecutive years and inclusion in Fortune's most admired companies list [1] - The company has effectively navigated a challenging market characterized by lower consumer confidence and increased competition by leveraging its diverse operating model and broad consumer reach [2] Financial Performance - In 2025, the company reported a net income of $783 million, or $7.77 per diluted share, with an adjusted net income of $830 million, or $8.24 per diluted share [23] - The fourth-quarter results included a net income of $174 million, or $1.76 per diluted share, and an adjusted net income of $188 million, or $1.91 per diluted share [23] - The company achieved a 13% return on equity and a 14% growth in book value per share, supported by $381 million in share repurchases [3] Sales and Orders - In the fourth quarter, net orders totaled 2,499 homes, down 5% year-over-year, with a monthly absorption pace of 2.4 homes per community [24] - The company delivered 12,997 homes in 2025, generating approximately $7.8 billion in home closings revenue, with an average closing price of $597,000 [26] - The sales mix included 31% entry-level, 49% move-up, and 20% resort lifestyle buyers, with strong sales in Florida, California, and Phoenix [7] Market Conditions and Strategy - The company anticipates a solid year in 2026, focusing on new community openings, with over 100 new outlets planned, including more than 20 Esplanade communities [9][10] - Inventory management remains a priority, with a 24% reduction in spec home inventory since 2025, although nearly 3,000 unsold homes remain [11] - The company is shifting focus away from non-core submarkets to concentrate on move-up and resort lifestyle segments, which are expected to yield higher returns [13][14] Operational Efficiency - The company has improved construction cycle times, allowing for greater production flexibility and the ability to start homes later in the year while still closing by year-end [10] - The SG&A ratio was 9.5% for the full year, reflecting a 40 basis-point improvement compared to 2024, driven by lower payroll-related costs and efficiencies from digital tools [30] Future Outlook - The company expects to deliver around 11,000 homes in 2026, with an average closing price projected between $580,000 and $590,000 [27] - Gross margins are expected to improve gradually throughout the year, driven by an increase in the share of to-be-built home deliveries [29] - The company maintains a strong liquidity position of approximately $1.8 billion, including $850 million in unrestricted cash [32]

Financial Data and Key Metrics Changes - In Q4 2025, reported net income was $174 million or $1.76 per diluted share, while adjusted net income was $188 million or $1.91 per diluted share, reflecting a solid performance despite market challenges [25][26] - For the full year 2025, reported net income was $783 million or $7.77 per diluted share, with adjusted net income at $830 million or $8.24 per diluted share [25][26] - The company achieved a 13% return on equity and a 14% growth in book value per share [5] Business Line Data and Key Metrics Changes - The company delivered nearly 13,000 homes in 2025 with an adjusted home closings gross margin of 23% [5] - In Q4, net orders totaled 2,499 homes, down 5% YoY, driven by a moderation in monthly absorption pace [25][26] - The average price of homes delivered in Q4 was $596,000, generating approximately $2 billion in home closings revenue [26] Market Data and Key Metrics Changes - Sales were strongest in the east and west regions, particularly in Florida, California, and Phoenix, while the central region, especially Texas, showed slower performance [11] - The company experienced a 7% YoY net order growth in its Esplanade resort lifestyle communities, while move-up sales saw a low single-digit decline [10] Company Strategy and Development Direction - The company plans to accelerate new community openings in 2026, with over 100 new outlets expected, including more than 20 new Esplanade outlets [12][13] - A focus on the move-up and resort lifestyle segments is emphasized, with a strategic shift away from non-core submarkets that cater to price-sensitive buyers [15][16] - The company aims to maintain a controlled ratio of at least 65% for home-building lots to optimize capital efficiency [19] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about sales success in Q4 2025 and early momentum in 2026, despite ongoing affordability constraints and elevated inventory levels [9][11] - The company anticipates that consumer confidence in the economic and political outlook will be critical for demand recovery [9] - Management highlighted the importance of understanding consumer needs and preferences, which has contributed to the company's reputation as a trusted builder [8] Other Important Information - The company repurchased 1.2 million shares for $71 million in Q4 2025, totaling 6.5 million shares for approximately $381 million for the full year [33] - The company ended Q4 with strong liquidity of approximately $1.8 billion, including $850 million in unrestricted cash [32] Q&A Session Summary Question: Long-term view on business mix and geographies - Management expects a slight decrease in the entry-level mix, focusing on core markets and avoiding fringe locations that attract different buyers [40][41] Question: Spec versus to-be-built mix - Management aims for a more balanced mix, potentially reaching a 50/50 split between spec and to-be-built homes over time, though achieving this in 2026 may be challenging [44][46] Question: Absorption rates in new communities - New communities are performing well, with strong interest and sales, indicating positive absorption trends compared to legacy communities [63] Question: Construction cost outlook - Management anticipates stable construction costs but is monitoring potential increases in lumber prices and other cost factors [54][56] Question: Incentives and gross margin guidance - Incentives were relatively flat from Q4 to Q1, with expectations for gross margins to improve gradually as the mix shifts towards to-be-built homes [60][62]

Financial Data and Key Metrics Changes - In Q4 2025, reported net income was $174 million or $1.76 per diluted share, while adjusted net income was $188 million or $1.91 per diluted share [24] - For the full year 2025, reported net income was $783 million or $7.77 per diluted share, with adjusted net income at $830 million or $8.24 per diluted share [24] - The company achieved a 13% return on equity and a 14% growth in book value per share [5] Business Line Data and Key Metrics Changes - In Q4 2025, net orders totaled 2,499 homes, down 5% year-over-year, with a monthly absorption pace of 2.4 homes per community [24][25] - Home closings revenue for Q4 was approximately $2 billion, with an average closing price of $596,000 [25][26] - The home closings gross margin was 21.8%, slightly above prior guidance, but down from 24.8% in Q4 2024 [29] Market Data and Key Metrics Changes - Sales were strongest in the east and west areas, particularly in Florida, California, and Phoenix, while the central region, especially Texas, showed slower performance [11] - The company entered 2026 with a backlog of just over 2,800 homes, lower than normal due to slower sales of to-be-built homes in 2025 [11] Company Strategy and Development Direction - The company plans to accelerate the number of new community openings in 2026, with over 100 new outlets planned, including more than 20 new Esplanade outlets [12] - The focus will be on move-up and resort lifestyle segments, with a strategic shift away from non-core submarkets that cater to price-sensitive buyers [14][15] - The company aims to reach 20,000 closings in the long term, emphasizing attractive returns on invested capital [14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about sales success in Q4 2025 and early momentum in 2026, despite elevated inventory levels and competitive pricing dynamics [9][10] - Consumer confidence in the economic outlook is deemed critical for demand recovery, with management noting improvements in affordability and wage growth [9] Other Important Information - The company repurchased 1.2 million shares for $71 million in Q4 2025, totaling 6.5 million shares for approximately $381 million for the full year [32] - The company maintains strong liquidity of approximately $1.8 billion, including $850 million in unrestricted cash [32] Q&A Session Summary Question: Long-term view on business mix and geographies - Management expects a slight decrease in entry-level mix but will continue to focus on professional first-time buyers, particularly millennials [39][40] Question: Spec versus to-be-built mix - Management is encouraged by the shift towards to-be-built sales but does not expect a 50/50 mix in 2026 [43][44] Question: Esplanade community growth and absorption rates - Absorption rates in Esplanade communities are consistent with the overall business, with no significant change expected [51] Question: Construction cost outlook - Management anticipates stable construction costs but is monitoring lumber prices and other potential cost increases [53][54] Question: Land investment strategy - The company is shifting focus back to core markets for land investments, finding better opportunities in move-up and resort lifestyle segments [82]

Financial Data and Key Metrics Changes - In Q4 2025, reported net income was $174 million or $1.76 per diluted share, while adjusted net income was $188 million or $1.91 per diluted share, reflecting a solid performance despite market challenges [25][26] - For the full year 2025, reported net income was $783 million or $7.77 per diluted share, with adjusted net income at $830 million or $8.24 per diluted share, indicating strong overall financial health [25][26] - The company achieved a return on equity of 13% and a 14% growth in book value per share [5] Business Line Data and Key Metrics Changes - The company delivered nearly 13,000 homes in 2025 with an adjusted home closings gross margin of 23% [5] - In Q4 2025, net orders totaled 2,499 homes, down 5% year-over-year, driven by a moderation in monthly absorption pace [25][26] - The average price of homes delivered in Q4 was $596,000, generating approximately $2 billion in home closings revenue [26] Market Data and Key Metrics Changes - Sales were strongest in the east and west areas, particularly in Florida, California, and Phoenix, while the central region, especially Texas, showed slower performance [10] - The company experienced a 7% year-over-year net order growth in its Esplanade resort lifestyle communities, contrasting with declines in other segments [10] Company Strategy and Development Direction - The company plans to accelerate new community openings in 2026, with over 100 new outlets planned, including more than 20 new Esplanade outlets [12] - The focus will shift towards serving more discerning entry-level demand and enhancing the build-to-rent platform, Yardly, to meet affordable housing needs [15][22] - The company aims to concentrate efforts on core markets and limit investments in non-core submarkets to optimize capital efficiency [14][20] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about sales momentum in early 2026, despite ongoing market challenges such as elevated inventory levels and consumer confidence issues [8][9] - The company anticipates that the spring selling season will be critical for home closing deliveries and margins, with expectations for gradual margin improvement throughout the year [30][31] Other Important Information - The company repurchased 1.2 million shares for $71 million in Q4 2025, totaling 6.5 million shares for approximately $381 million for the full year [33] - The board approved an increase in the share repurchase authorization to $1 billion, reflecting a commitment to return excess capital to shareholders [33] Q&A Session Summary Question: Long-term view on business mix and geographies - Management expects a slight decrease in entry-level buyer mix, focusing on core markets like Florida and Texas while pulling back from California due to underwriting constraints [40][42] Question: Spec versus to-be-built mix - The intention is to gradually shift back towards a more balanced mix, with a target of 50/50 over time, though achieving this in 2026 may be challenging [43][46] Question: Absorption rates in new communities - New communities are performing well, with strong interest and sales activity, indicating positive momentum as the spring selling season approaches [64] Question: Construction cost outlook - While construction costs are expected to remain stable, there are concerns about potential increases in lumber prices and other materials [56] Question: Incentives and gross margin guidance - Incentives were relatively flat from Q4 to Q1, with expectations for gross margins to improve as the mix shifts towards to-be-built homes [78][80]

Investor Presentation Fourth Quarter 2025 About Taylor Morrison (NYSE: TMHC) We are backed by a reputation for an exceptional customer experience and a commitment to our teams and communities Our portfolio of brands offers for-sale and for-rent housing in distinctive communities, complemented by financial services Headquartered in Scottsdale, AZ Leading builder with operations across 12 states Diverse product offerings in prime locations Experienced leadership team Balanced operating model delivers strong f ...

分组1 - Taylor Morrison Home (TMHC) reported quarterly earnings of $1.91 per share, exceeding the Zacks Consensus Estimate of $1.73 per share, but down from $2.64 per share a year ago, representing an earnings surprise of +10.56% [1] - The company achieved revenues of $2.1 billion for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 7.63%, compared to year-ago revenues of $2.36 billion [2] - Taylor Morrison shares have increased approximately 12.8% since the beginning of the year, outperforming the S&P 500's gain of 1.4% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $1.24 on revenues of $1.58 billion, and for the current fiscal year, it is $6.74 on revenues of $7.45 billion [7] - The Zacks Industry Rank indicates that the Building Products - Home Builders sector is currently in the bottom 2% of over 250 Zacks industries, suggesting potential underperformance compared to higher-ranked industries [8]