Meritage Corporation (MTH)

Net profit margin

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	738,748	992,192	737,444	423,475	249,663
Revenue	US$ in thousands	6,113,010	6,298,150	5,147,330	4,506,300	3,677,840
Net profit margin		12.08%	15.75%	14.33%	9.40%	6.79%

December 31, 2023 calculation

Net profit margin = Net income ÷ Revenue
= $738,748K ÷ $6,113,010K
= 12.08%

Net profit margin is a key profitability ratio that measures the percentage of revenue that translates into net income after accounting for all expenses. Meritage Homes Corp. has shown a fluctuating trend in its net profit margin over the past five years.

The company's net profit margin was 12.08% in 2023, a decrease from 15.83% in 2022. This decline may indicate that the company's profitability relative to its revenue decreased in 2023. However, it is important to note that a net profit margin of 12.08% still demonstrates that Meritage Homes Corp. is able to effectively convert a decent portion of its revenue into net income.

Comparing the current net profit margin to previous years, it is evident that the company has progressively improved its profitability since 2019, when the net profit margin was 6.84%. This indicates that Meritage Homes Corp. has been able to enhance its efficiency in managing costs and generating profits over time.

Overall, while the decrease from the previous year may raise some questions, the long-term trend of increasing net profit margins suggests that Meritage Homes Corp. has been successful in enhancing its profitability over the past five years.