Abstract
Taylor Morrison Home will release its Q4 2025 results on February 11, 2026 Pre-Market; this preview summarizes last quarter’s performance, this quarter’s consensus forecasts, the company’s guidance framework, and the prevailing analyst stance.
Market Forecast
Consensus for the current quarter points to revenue of $1.92 billion, adjusted EPS of $1.76, and EBIT of $233.10 million, implying year-over-year declines of 9.48%, 26.40%, and 27.64%, respectively. Based on the trailing quarter’s mix, the market also expects a modest sequential compression in gross profit margin from 23.22% and a net profit margin near the high single digits, with adjusted EPS down double digits year over year. The main business is expected to remain dominated by home closings revenue alongside a small contribution from mortgage and ancillary services; outlook highlights center on absorptions and price/mix discipline amid rate-sensitive demand. The most promising segment appears to be the mortgage operations as a leveraged benefit from stabilization in application volumes; however, the revenue base is small at $55.92 million last quarter and growth is contingent on rate volatility easing year over year.
Last Quarter Review
Taylor Morrison Home reported revenue of $2.00 billion, a gross profit margin of 23.22%, GAAP net income attributable to the parent of $201.00 million with a net profit margin of 9.61%, and adjusted EPS of $2.01, with year-over-year changes of -1.39% in revenue, -10.79% in EBIT, and -15.19% in EPS. The company delivered better-than-expected profitability versus consensus on EBIT and EPS despite slightly lower revenue, reflecting cost control and a resilient pricing/mix profile. The primary business highlight was real estate (home) closings revenue of $2.00 billion, complemented by mortgage operations at $55.92 million and other services at $33.19 million; the shift in mix reflects a steady reliance on core homebuilding while ancillary lines maintained proportionally small contributions.
Current Quarter Outlook
Homebuilding revenue and margin trajectory
Homebuilding remains the core earnings engine, with closings revenue historically representing more than 95.00% of total sales. For the current quarter, the revenue forecast of $1.92 billion implies softer closings pace and a more conservative price/mix stance compared with last year’s period, in part reflecting ongoing affordability constraints. Investors will watch the gross profit margin relative to last quarter’s 23.22%, where modest sequential pressure is expected as incentives and construction cost dynamics normalize against a slower pricing backdrop. Any stabilization in cycle times and build-cost inputs could limit margin erosion, yet a higher incentive environment and community-level competition may compress unit economics. Net profit margin near the high single digits would still evidence disciplined SG&A control, but downside risk arises if incentives creep higher to sustain absorptions into the spring selling season.
Mortgage operations sensitivity to rates
The mortgage business, while small at $55.92 million last quarter, tends to act as a throughput amplifier when volumes improve and spreads stabilize. With market forecasts still embedding lower year-over-year EPS and EBIT, the base case suggests only incremental support from mortgage profitability rather than a major earnings driver. A more favorable interest-rate environment would help capture backlog conversions and potentially improve capture rates, but these benefits may be offset by competitive pricing and volatile secondary market margins. The near-term earnings impact therefore hinges on application momentum through the January-to-February window and the breadth of rate locks tied to Q4 closings; on balance, the segment is positioned to provide modest uplift but not to offset weaker homebuilding margins.
Key stock price drivers this quarter
Price action is likely to hinge on three levers: gross margin print relative to expectations, order trends/backlog conversion rates, and updated commentary on incentives and absorptions. If gross margin lands close to the low-23.00% range with flat-to-up sequential orders, investors may view the earnings base as defensible into the spring selling season. Conversely, a sharper margin step-down combined with soft orders would reinforce caution embedded in the EPS decline forecast and pressure the multiple. Management color on land spend discipline, community count trajectory, and spec strategy will shape expectations for the next two quarters, especially if build times continue to normalize and cycle-time benefits provide cost offsets. The balance of these factors will define whether the revenue deceleration translates into proportionate EPS pressure or whether mix and cost discipline can mitigate the downside.
Analyst Opinions
The majority of recently expressed opinions lean cautious, emphasizing margin risk into the quarter despite resilient demand pockets, with a minority pointing to potential upside if incentives moderate and orders stabilize. Several institutional previews highlight the likelihood of year-over-year compression in adjusted EPS to $1.76 and margin pressure as the company navigates affordability and competitive incentives, noting that home closings will dominate the revenue mix near $1.92 billion for Q4 2025. The prevailing view holds that while Taylor Morrison Home has demonstrated disciplined cost management, the risk-reward into the print skews toward defensiveness unless gross margin trends surprise favorably and order growth re-accelerates; this stance frames consensus expectations as achievable but leaves limited room for positive revision without clearer signs of margin stabilization.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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