Taylor Morrison
TMHC
$72.45
-0.03%
Taylor Morrison Home Corporation is a U.S.-based residential construction company that designs, builds, and sells single-family and multi-family homes, as well as master-planned and lifestyle communities, operating under brands like Taylor Morrison, William Lyon Signature, and Darling Homes. As one of the largest public homebuilders in the country, it holds a strong competitive position in key markets across the Sun Belt and Western states, differentiating itself through a focus on design-forward communities and an integrated financial services arm. The current investor narrative is dominated by Berkshire Hathaway's all-cash acquisition announcement in June 2026, which has created a valuation floor for the stock and sparked debate about the strategic rationale under new CEO Greg Abel, while the company navigates a challenging housing market characterized by elevated mortgage rates and shifting buyer demand.…
TMHC
Taylor Morrison
$72.45
Related headlines
Investment Opinion: Should I buy TMHC Today?
Rating: Hold. The stock is fairly valued given the acquisition premium, with limited upside to the average analyst target of $66.75 (7.9% downside). The thesis is that Berkshire's acquisition provides a floor, but the stock has already priced in most of the deal's benefits.
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TMHC 12-Month Price Forecast
The AI stance is neutral because the acquisition creates a binary outcome: if it closes, the stock is likely to stay near current levels, but if it fails, significant downside exists. The high beta and cyclicality add risk, but the low valuation and strong balance sheet provide some support. Upgrades to bullish would require clear evidence of housing recovery or a higher deal price; downgrades to bearish would occur if the deal collapses or revenue decline accelerates.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Taylor Morrison's 12-month outlook, with a consensus price target around $66.75 and implied upside of -7.9% versus the current price.
Average Target
$66.75
0 analysts
Implied Upside
-7.9%
vs. current price
Analyst Count
—
covering this stock
Price Range
$49 - $73
Analyst target range
The wide target spread of $24 (from $49 to $73) signals high uncertainty, with the low target likely pricing in a failed acquisition or a severe housing downturn, while the high target assumes the deal closes and the company benefits from Berkshire's backing. Recent institutional ratings show a notable downgrade trend, with Barclays, Raymond James, Wolfe Research, RBC Capital, and Truist all moving from more bullish stances to neutral or hold ratings in June and July 2026, likely in response to the acquisition premium being realized. This pattern suggests that analysts see limited upside from current levels, as the stock has already priced in much of the deal's benefits. The limited coverage and recent downgrades imply that the stock may be less efficiently priced, offering opportunities for investors who can assess the acquisition's strategic merits independently.
Bulls vs Bears: TMHC Investment Factors
The bull case is anchored by the Berkshire acquisition, which provides a valuation floor and strategic backing, while the bear case is driven by deteriorating fundamentals and limited analyst upside. Currently, the bull case has stronger evidence because the acquisition is highly likely to close, and the stock is trading near its high with strong momentum. The most important tension is whether the housing market recovery will materialize as Berkshire expects, or if continued rate hikes will prolong the downturn, potentially undermining the deal's strategic rationale. If the acquisition closes, the stock is likely to remain near the deal price; if it fails, the downside could be significant.
Bullish
- Berkshire Hathaway acquisition at 24% premium: Berkshire Hathaway's all-cash acquisition at a 24% premium to the pre-announcement price establishes a valuation floor and signals confidence in TMHC's assets. The deal is likely to pass the shareholder vote on July 22, 2026, with minimal risk, as noted in recent news.
- Stock near 52-week high with strong momentum: TMHC is trading at $72.45, just 0.07% below its 52-week high of $72.50, and has gained 12.66% over the past year. The stock's relative strength over 3 months is +10.90% versus the S&P 500, indicating robust investor confidence.
- Undervalued on trailing earnings: The trailing PE is 7.45x, well below the market average, and the price-to-book ratio is 0.93x, implying the stock trades below its book value. This suggests the market is pricing in significant pessimism, offering a margin of safety.
- Strong balance sheet with low leverage: Debt-to-equity is only 0.38, and the current ratio is 6.24, indicating ample liquidity to weather housing market downturns. This financial stability reduces bankruptcy risk and supports the acquisition's financing.
Bearish
- Revenue declining sharply year-over-year: Q1 2026 revenue fell 26.84% year-over-year to $1.387 billion, following sequential declines from $2.100 billion in Q4 2025. This indicates a deteriorating demand environment due to high mortgage rates, which could pressure earnings further.
- Forward PE implies earnings contraction: The forward PE of 11.53x is significantly higher than the trailing PE of 7.45x, signaling that the market expects earnings to decline. The negative PEG ratio of -1.19 confirms this pessimistic outlook.
- Analyst downgrades and limited upside: Five major firms (Barclays, Raymond James, Wolfe Research, RBC Capital, Truist) downgraded TMHC to neutral/hold in June-July 2026, reflecting that the acquisition premium has been realized. The average analyst target of $66.75 is 7.9% below the current price, implying limited upside.
- High beta and cyclical sensitivity: With a beta of 1.443, TMHC is highly sensitive to macroeconomic conditions. Rising interest rates or a housing downturn could lead to outsized declines, as seen in the 23.8% max drawdown over the past year.
TMHC Technical Analysis
Taylor Morrison's stock has been in a strong uptrend over the past year, with a 12.66% gain, and is currently trading at $72.45, just 0.07% below its 52-week high of $72.50. The stock sits at 99.9% of its 52-week range, indicating it is near the upper boundary, which typically reflects robust momentum and investor confidence, though it also raises the risk of short-term overextension. The 52-week low of $54.15 was set in May 2026, and the stock has since rallied sharply, suggesting a recovery from a mid-year dip.
Beta
1.44
1.44x market volatility
Max Drawdown
-23.8%
Largest decline past year
52-Week Range
$54-$73
Price range past year
Annual Return
+12.7%
Cumulative gain past year
| Period | TMHC Return | S&P 500 |
|---|---|---|
| 1m | +1.1% | +1.7% |
| 3m | +14.6% | +4.7% |
| 6m | +16.4% | +10.4% |
| 1y | +12.7% | +21.9% |
| ytd | +23.2% | +11.1% |
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TMHC Fundamental Analysis
Taylor Morrison's revenue has been volatile, with the most recent quarter (Q1 2026) showing revenue of $1.387 billion, a 26.84% decline year-over-year, following a pattern of sequential declines from $2.100 billion in Q4 2025 and $2.096 billion in Q3 2025. This deceleration reflects a challenging housing market with higher mortgage rates dampening demand, though the company's revenue mix includes home sales ($1.311 billion), financial services ($49.3 million), and land sales ($14.5 million), with home sales being the primary driver. The growth trajectory is clearly negative, which raises concerns about the company's ability to maintain its earnings power in the current environment.
Quarterly Revenue
$1.4B
2026-03
Revenue YoY Growth
-26.8%
YoY Comparison
Gross Margin
20.9%
Latest Quarter
Free Cash Flow
$709650000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is TMHC Overvalued?
Given Taylor Morrison's positive net income, the PE ratio is the most appropriate valuation metric. The trailing PE stands at 7.45x, while the forward PE is 11.53x, indicating that the market expects earnings to decline, which is consistent with the recent revenue contraction. The gap between trailing and forward PE suggests a pessimistic outlook, as investors are pricing in lower future earnings. The stock's PEG ratio is negative at -1.19, reflecting expected earnings declines, which further underscores the market's cautious stance.
PE
7.5x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 2x~9x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
6.7x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are significant. Revenue declined 26.84% year-over-year in Q1 2026, and the forward PE of 11.53x implies expected earnings contraction. The company's net margin fell to 7.24% in Q1 2026 from 11.26% a year earlier, indicating margin pressure. While debt-to-equity is low at 0.38, the reliance on home sales (94.5% of revenue) creates concentration risk. If demand continues to weaken, cash flow could deteriorate, though the current ratio of 6.24 provides a buffer.
FAQ
The key risks are: 1) Acquisition failure, which could send the stock down to the 52-week low of $54.15 or lower (analyst low target $49). 2) Continued revenue decline, as Q1 2026 revenue fell 26.84% YoY. 3) High interest rates, given the beta of 1.443, making the stock sensitive to macro conditions. 4) Analyst downgrades, as five firms have already moved to hold, limiting upside. The most severe risk is the deal collapsing, which would remove the valuation floor.
The 12-month forecast is a base case of $66.75 (50% probability), a bull case of $73.00 (35% probability), and a bear case of $49.00 (15% probability). The most likely scenario is that the acquisition closes and the stock trades near the average analyst target, reflecting modest uncertainty. The key assumption is that the deal completes without major issues and housing demand stabilizes.
TMHC is fairly valued relative to its acquisition price. The trailing PE of 7.45x is low, but the forward PE of 11.53x suggests earnings are expected to decline. The price-to-book ratio of 0.93x indicates the stock trades below book value, which is typical for homebuilders. The market is pricing in a housing downturn, but the acquisition premium has lifted the stock to near its high. Overall, the valuation is reasonable but not a bargain.
TMHC is a hold for most investors. The stock is trading at $72.45, near its 52-week high, with an average analyst target of $66.75, implying 7.9% downside. The Berkshire acquisition provides a floor, but the stock has already priced in the premium. For risk-tolerant investors who believe the deal will close and housing will recover, it could be a buy, but the limited upside and high beta make it less attractive for conservative portfolios.
TMHC is best suited for a medium-term investment horizon of 12-24 months, aligned with the acquisition timeline. The stock's high beta (1.443) and cyclicality make it volatile for short-term trading, while the acquisition provides a defined catalyst. Long-term investors could benefit if Berkshire's ownership improves operations, but the current valuation limits upside. A minimum holding period of 12 months is recommended to capture the deal's outcome.