Why did MTH's Q4 2024 EPS surprise analysts?

Meritage Homes' Q4 2024 EPS of $4.72 exceeded analysts' expectations, as reflected by the EPS surprise of 7.27%. This outcome can be dissected into the following factors: 1. **Strategic Market Expansions**: Meritage Homes has been actively expanding its community count and entering new markets. Such strategic moves can lead to increased demand and higher home closing volumes, thereby boosting earnings. 2. **Efficient Cost Management**: Despite challenges like rising lot costs and decreased average sales prices, Meritage Homes has demonstrated effective cost management, as evidenced by the company's gross margin improvements. This suggests that the company has been successful in managing its operational efficiencies, which can positively impact profitability. 3. **Record Deliveries and Revenue**: Meritage Homes celebrated a record-setting year in 2024, with fourth-quarter deliveries reaching 4,044 homes and total closing revenue of $6.3 billion. This achievement, coupled with a strong backlog conversion rate and return on equity, indicates a robust business performance that can lead to higher earnings. In summary, Meritage Homes' Q4 2024 EPS surpassed analysts' expectations due to a combination of strategic market expansions, efficient cost management, and record deliveries and revenue. These factors collectively contribute to the company's strong financial performance and higher-than-expected earnings.