Is Taylor Morrison Home Corporation (TMHC) positioned for future growth?

Taylor Morrison Home Corporation (NYSE: TMHC) stock jumped 1.34% on Friday to $28.02 against a previous-day closing price of $27.65. With 1.01 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.2 million shares. During the session, the Residential Construction company that operates in wider Consumer Cyclical sector, reached to the highest price of $28.36 whereas the lowest price it dropped to was $27.36. The 52-week range on TMHC shows that it touched its highest point at $35.51 and its lowest point at $20.05 during that stretch. It currently has a 1-year price target of $34.00. Beta for the stock currently stands at 1.75.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of TMHC was down-trending over the past week, with a drop of -0.99%, but this was up by 12.94% over a month. Three-month performance dropped to -4.89% while six-month performance fell -10.02%. The stock gained 5.78% in the past year, while it has lost -19.85% so far this year. A look at the trailing 12-month EPS for TMHC yields 7.41 with Next year EPS estimates of 7.52. For the next quarter, that number is 2.53. This implies an EPS growth rate of 174.80% for this year and -18.74% for next year. EPS is expected to grow by 13.12% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 24.90%.

Float and Shares Shorts:

At present, 117.93 million TMHC shares are outstanding with a float of 114.45 million shares on hand for trading. On Jul 14, 2022, short shares totaled 5.32 million, which was 4.68% higher than short shares on Jun 14, 2022. In addition to Ms. Sheryl Denise Palmer as the firm’s Chairman, Pres & CEO, Mr. Darrell C. Sherman Esq. serves as its Exec. VP, Chief Legal Officer & Sec.

Institutional Ownership:

Through their ownership of 104.90% of TMHC’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 59.16% of TMHC, in contrast to 5.63% held by mutual funds. Shares owned by individuals account for 31.88%. As the largest shareholder in TMHC with 11.31% of the stake, BlackRock Fund Advisors holds 13,532,553 shares worth 13,532,553. A second-largest stockholder of TMHC, The Vanguard Group, Inc., holds 10,924,928 shares, controlling over 9.13% of the firm’s shares. Fidelity Management & Research Co is the third largest shareholder in TMHC, holding 9,845,726 shares or 8.23% stake. With a 2.99% stake in TMHC, the Vanguard Selected Value Fund is the largest stakeholder. A total of 3,571,543 shares are owned by the mutual fund manager. The iShares Core S&P Mid Cap ETF, which owns about 2.87% of TMHC stock, is the second-largest Mutual Fund holder. It holds 3,434,485 shares valued at 80.23 million. Fidelity Low Priced Stock Fund holds 2.82% of the stake in TMHC, owning 3,374,545 shares worth 78.83 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2022, TMHC reported revenue of $2.00B and operating income of $375.94M. It generated $290.99M net income for the quarter, which came to $908.55M over the last twelve months. The EBITDA in the recently reported quarter was $371.38M and diluted EPS was $2.45. EBITDA for the full year was $1.22B.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for TMHC since 11 analysts follow the stock currently. There are 4 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 6 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With TMHC analysts setting a high price target of $51.00 and a low target of $28.00, the average target price over the next 12 months is $33.44. Based on these targets, TMHC could surge 82.01% to reach the target high and fall by -0.07% to reach the target low. Reaching the average price target will result in a growth of 19.34% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. TMHC will report FY 2022 earnings on 02/07/2023. Analysts have provided yearly estimates in a range of $9.99 being high and $9.31 being low. For TMHC, this leads to a yearly average estimate of $9.57. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Taylor Morrison Home Corporation surprised analysts by $0.61 when it reported $2.45 EPS against a consensus estimate of $1.84. The surprise factor in the prior quarter was $0.19. Based on analyst estimates, the high estimate for the next quarter is $2.58 and the low estimate is $2.39. The average estimate for the next quarter is thus $2.51.

Summary of Insider Activity:

Insiders traded TMHC stock several times over the past three months with 3 Buys and 0 Sells. In these transactions, 21,441 shares were bought while 0 shares were sold. The number of buy transactions has increased to 33 while that of sell transactions has risen to 53 over the past year. The total number of shares bought during that period was 711,801 while 788,692 shares were sold.

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