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MTH vs TOL
Which Stock Would AI Choose? Meritage Homes (MTH) vs. Toll Brothers (TOL) Stock Comparison
Key Takeaways
- Both MTH and TOL are U.S. homebuilders, but they serve sharply different buyer segments: entry-level and first move-up versus luxury.
- Recent order trends have diverged, with TOL posting year-over-year order growth while MTH has seen orders and margins contract.
- Margins remain under pressure across the sector from elevated mortgage rates and weaker consumer confidence, though the luxury end has proven more resilient.
- Market positioning differs by valuation, dividend profile, and balance-sheet scale, giving each stock a distinct risk and reward profile.
Introduction
Homebuilders sit at the intersection of interest rates, affordability, and consumer sentiment, making them a useful lens for gauging the broader housing cycle. This stock comparison examines two of the sector's most recognized names: Meritage Homes and Toll Brothers. Although both companies design and build single-family homes, their business models are built around different buyers, which produces meaningful differences in relative performance and market positioning. Traders and investors tracking cyclical, rate-sensitive equities may find this comparison useful for understanding how a mid-tier builder and a luxury builder are navigating the same macro environment in recent weeks and months.
MTH Overview and Recent Performance
MTH, or Meritage Homes, is the fifth-largest public U.S. homebuilder and focuses on energy-efficient, entry-level and first move-up homes across the Sun Belt and Southeast. This positioning ties the company closely to affordability, meaning it is especially sensitive to changes in mortgage rates and first-time buyer confidence. In recent quarters, those forces have weighed on results: Meritage reported softer order volumes, lower average selling prices, and compressed gross margins, reflecting a softer spring selling season and higher incentive use to move inventory.
Management has responded with disciplined capital allocation, moderating land spending while continuing share repurchases and dividends. The company has also maintained strong liquidity and a relatively low net debt-to-capital ratio. However, sell-side earnings estimates have been revised lower in recent weeks, and the stock's relative performance has lagged the broader market over the past year, underscoring the cyclical headwinds facing its affordability-sensitive customer base.
TOL Overview and Recent Performance
TOL, or Toll Brothers, is the largest U.S. luxury homebuilder, with an average delivered home price above roughly $1 million. Because its buyers tend to be higher-income and often use cash or substantial down payments, Toll Brothers has historically been less exposed to short-term mortgage-rate swings than entry-level builders. Recent market activity reflects that resilience: while deliveries declined year over year, net signed contracts grew, and the company's average selling price rose on a favorable product and geographic mix.
The company has continued expanding its community count, integrating a strategic acquisition in the Northwest Arkansas market, and raising its full-year guidance across key homebuilding metrics. Margin compression from inventory impairments and higher selling, general, and administrative costs has been a headwind, but order trends and a large, well-capitalized balance sheet have supported sentiment. Like Meritage, Toll Brothers has actively returned capital through buybacks and dividends in recent periods.
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Head-to-Head Comparison
The most important contrast between these two companies is their customer base and the resulting sensitivity to the housing cycle. Meritage Homes targets cost-conscious buyers, so its volume and pricing power tend to weaken quickly when mortgage rates rise and affordability erodes. Toll Brothers, by contrast, serves affluent buyers with greater financial flexibility, which has translated into steadier order growth and higher realized prices even as the broader market softened.
Scale and capital structure also differ. Toll Brothers operates with a materially larger market capitalization, a bigger revenue base, and a longer-standing luxury brand, while Meritage carries a leaner footprint focused on high-growth Sun Belt markets. On valuation, Meritage trades at a lower forward earnings multiple but faces more pronounced downward earnings revisions, whereas Toll Brothers commands a premium that reflects its margin profile and demand stability. Both companies share common sector risks: elevated mortgage rates, input-cost inflation, and uncertain consumer confidence.
Tickeron AI Verdict
Based on observable factors, Tickeron's AI would likely lean toward TOL in the current environment. The relative consistency of its order growth, rising average selling prices, resilient luxury buyer base, and improved forward guidance suggest more stable trend conditions than Meritage's contracting orders and declining estimates. That said, the verdict is probabilistic rather than definitive; MTH could regain favor if affordability improves and rate pressures ease. The balance of current evidence, however, favors the builder with steadier demand and stronger near-term catalysts.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is MTH is a Buy and TOL is a StrongBuy.
MTH's RSI Oscillator climbs out of oversold territory
The RSI Indicator for MTH moved out of oversold territory on October 15, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 27 similar instances when the indicator left oversold territory. In 20 of the 27 cases the stock moved higher. This puts the odds of a move higher at 74%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 22, 2026. You may want to consider a long position or call options on MTH as a result. In 55 of 81 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 68%.
The Moving Average Convergence Divergence (MACD) for MTH just turned positive on October 20, 2026. Looking at past instances where MTH's MACD turned positive, the stock continued to rise in 36 of 53 cases over the following month. The odds of a continued upward trend are 68%.
Following a +8.21% 3-day Advance, the price is estimated to grow further. Considering data from situations where MTH advanced for three days, in 200 of 291 cases, the price rose further within the following month. The odds of a continued upward trend are 69%.
Bearish Trend Analysis
The Stochastic Oscillator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.
The 50-day moving average for MTH moved below the 200-day moving average on October 01, 2026. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where MTH declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 70%.
MTH broke above its upper Bollinger Band on October 22, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for MTH entered a downward trend on October 23, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 8 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 44 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.820) is normal, around the industry mean (1.728). P/E Ratio (13.174) is within average values for comparable stocks, (8.907). Projected Growth (PEG Ratio) (0.090) is also within normal values, averaging (1.217). Dividend Yield (0.030) settles around the average of (0.019) among similar stocks. P/S Ratio (0.814) is also within normal values, averaging (24.205).
The Tickeron Price Growth Rating for this company is 70 (best 1 - 100 worst), indicating slightly worse than average price growth. MTH’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 72 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. MTH’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 72, placing this stock worse than average.
The Tickeron Seasonality Score of 75 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron SMR rating for this company is 80 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
Momentum Indicator for TOL turns positive, indicating new upward trend
TOL saw its Momentum Indicator move above the 0 level on October 21, 2026. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 86 similar instances where the indicator turned positive. In 64 of the 86 cases, the stock moved higher in the following days. The odds of a move higher are at 74%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Moving Average Convergence Divergence (MACD) for TOL just turned positive on October 15, 2026. Looking at past instances where TOL's MACD turned positive, the stock continued to rise in 39 of 55 cases over the following month. The odds of a continued upward trend are 71%.
TOL moved above its 50-day moving average on October 22, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +1.38% 3-day Advance, the price is estimated to grow further. Considering data from situations where TOL advanced for three days, in 225 of 319 cases, the price rose further within the following month. The odds of a continued upward trend are 71%.
Bearish Trend Analysis
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
The 50-day moving average for TOL moved below the 200-day moving average on September 28, 2026. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where TOL declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 59%.
TOL broke above its upper Bollinger Band on October 22, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for TOL entered a downward trend on September 21, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 32 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 42 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 72, placing this stock slightly better than average.
The Tickeron SMR rating for this company is 58 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of 69 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.524) is normal, around the industry mean (1.669). P/E Ratio (11.286) is within average values for comparable stocks, (7.830). Projected Growth (PEG Ratio) (0.880) is also within normal values, averaging (1.217). Dividend Yield (0.007) settles around the average of (0.019) among similar stocks. P/S Ratio (1.184) is also within normal values, averaging (24.205).
The Tickeron Price Growth Rating for this company is 69 (best 1 - 100 worst), indicating slightly worse than average price growth. TOL’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of 85 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
MTH | TOL | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 82 | 81 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 44 Fair valued | 69 Overvalued | |
PROFIT vs RISK RATING 1..100 | 72 | 42 | |
SMR RATING 1..100 | 80 | 58 | |
PRICE GROWTH RATING 1..100 | 70 | 69 | |
P/E GROWTH RATING 1..100 | 8 | 32 | |
SEASONALITY SCORE 1..100 | 75 | 85 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
MTH's Valuation (44) in the Homebuilding industry is in the same range as TOL (69). This means that MTH’s stock grew similarly to TOL’s over the last 12 months.
TOL's Profit vs Risk Rating (42) in the Homebuilding industry is in the same range as MTH (72). This means that TOL’s stock grew similarly to MTH’s over the last 12 months.
TOL's SMR Rating (58) in the Homebuilding industry is in the same range as MTH (80). This means that TOL’s stock grew similarly to MTH’s over the last 12 months.
TOL's Price Growth Rating (69) in the Homebuilding industry is in the same range as MTH (70). This means that TOL’s stock grew similarly to MTH’s over the last 12 months.
MTH's P/E Growth Rating (8) in the Homebuilding industry is in the same range as TOL (32). This means that MTH’s stock grew similarly to TOL’s over the last 12 months.
| MTH | TOL | |
|---|---|---|
| RSI ODDS (%) | 1 day ago 74% | N/A |
| Stochastic ODDS (%) | 1 day ago 77% | 2 days ago 54% |
| Momentum ODDS (%) | 1 day ago 68% | 2 days ago 74% |
| MACD ODDS (%) | 1 day ago 68% | 2 days ago 71% |
| TrendWeek ODDS (%) | 1 day ago 70% | 2 days ago 72% |
| TrendMonth ODDS (%) | 1 day ago 67% | 2 days ago 68% |
| Advances ODDS (%) | 1 day ago 69% | 22 days ago 71% |
| Declines ODDS (%) | 5 days ago 70% | 5 days ago 59% |
| BollingerBands ODDS (%) | 1 day ago 73% | 2 days ago 62% |
| Aroon ODDS (%) | 1 day ago 71% | 3 days ago 68% |
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is overvalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
MTH’s FA Score shows that 1 FA rating(s) are green while TOL’s FA Score has 1 green FA rating(s).
- MTH’s FA Score: 1 green, 4 red.
- TOL’s FA Score: 1 green, 4 red.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
MTH’s TA Score shows that 4 TA indicator(s) are bullish while TOL’s TA Score has 4 bullish TA indicator(s).
- MTH’s TA Score: 4 bullish, 5 bearish.
- TOL’s TA Score: 4 bullish, 5 bearish.
Price Growth
MTH (@Homebuilding) experienced а +8.48% price change this week, while TOL (@Homebuilding) price change was +5.33% for the same time period.
The average weekly price growth across all stocks in the @Homebuilding industry was +4.05%. For the same industry, the average monthly price growth was -4.79%, and the average quarterly price growth was -5.57%.
Reported Earning Dates
MTH is expected to report earnings on Oct 28, 2026.
TOL is expected to report earnings on Dec 14, 2026.
Industries' Descriptions
@Homebuilding (+4.05% weekly)Homebuilding includes companies residential home construction companies, renovators and repair firms. The companies may be building single-family or multifamily homes, condominiums or mobile homes. Over the five years to 2019, the Home Builders industry is estimated to have grown at an annualized rate of 2.5% to reach $89.4 billion, (including expected growth of 2.6% in 2019), according to a study by IbisWorld. After having suffered one of its worst crises a decade ago during the last macroeconomic recession–which had much of its origins in U.S. real estate – the homebuilding industry has been recovering steadily so far. Higher disposable incomes and improving economic activity have bolstered consumers’ purchases of homes. While revenue of the Home Builders industry remains well below its prerecession high, demand growth estimates show promise.
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TOL and
Correlation & Price change
A.I.dvisor indicates that over the last year, TOL has been closely correlated with PHM. These tickers have moved in lockstep 89% of the time. This A.I.-generated data suggests there is a high statistical probability that if TOL jumps, then PHM could also see price increases.