Value
7.0/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.9 |
| P/S | 9.7 |
| EV/EBITDA | 7.0 |
| Fwd P/E | 9.1 |
| Analyst target | 3.0 |
- ▸Forward P/E: 11.2x
- ▸Attractively valued
TMHC · Why this verdict
Why Taylor Morrison Home Corporatio (TMHC) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Taylor Morrison Home has beaten earnings estimates in 3 of the last 4 quarters and trades at a forward price-to-earnings of 11.2x, but with the stock at RSI 93, negative revenue growth of -27%, and the price above the analyst target, the risk-reward is firmly negative for new entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Taylor Morrison has beaten earnings estimates in three of the last four quarters with an average positive surprise of 12.6%, while trading at a forward price-to-earnings of 11.2x — suggesting the market has not fully valued the company's earnings delivery track record. Earnings | Beat count reaches at least 3 of the next 4 quarters and forward price-to-earnings expands above 13x as the earnings track record is recognized. | →Stable |
| CounterRevenue is declining 27% year-over-year, which means the earnings beats are occurring on a shrinking revenue base — a pattern that typically cannot be sustained without top-line recovery. | ||
Revenue declined 27% year-over-year, earning a growth score of 0.0 out of 10, and earnings growth is also at 0.0 — the worst combination in the scoring model — indicating the company is currently in a meaningful contraction phase. Growth | Revenue growth recovers above 0% year-over-year within 12 months, removing the 0.0 growth score and establishing a positive trajectory. | →Stable |
| CounterResidential construction revenue can be lumpy due to community closeouts and opening timing, and a single-quarter revenue decline may not reflect the underlying order backlog or future delivery pipeline. | ||
RSI at 93 is extremely overbought and falls in the top 1% of historical readings, while falling on-balance volume at a near-52-week high signals late-cycle distribution — a pattern where large sellers are offloading shares into strength. Momentum breakdown | RSI falls below 70 within 60 days as the stock consolidates from the overbought condition, and on-balance volume stabilizes or turns positive. | →Stable |
| CounterRSI can remain elevated for extended periods during strong uptrends, and the golden cross MACD pattern suggests the underlying trend may support the elevated RSI reading temporarily. | ||
The current price of $71.95 is above the analyst price target with -21.6% implied downside, and news sentiment of -0.50 combined with an elevated put/call ratio of 1.68 indicates that both the analyst community and options market are cautious on near-term prospects. Bear case | Analyst consensus price target rises above $78, more than 8% above the current price of $71.95, re-establishing positive asymmetry before any new position is considered. | →Stable |
| CounterA C-suite officer departure or appointment — flagged in the 8-K warning — could signal strategic change that improves the outlook beyond what current analyst targets reflect. | ||
Taylor Morrison has beaten earnings estimates in three of the last four quarters with an average positive surprise of 12.6%, while trading at a forward price-to-earnings of 11.2x — suggesting the market has not fully valued the company's earnings delivery track record.
→StableEarnings
- Expectation
- Beat count reaches at least 3 of the next 4 quarters and forward price-to-earnings expands above 13x as the earnings track record is recognized.
CounterRevenue is declining 27% year-over-year, which means the earnings beats are occurring on a shrinking revenue base — a pattern that typically cannot be sustained without top-line recovery.
Revenue declined 27% year-over-year, earning a growth score of 0.0 out of 10, and earnings growth is also at 0.0 — the worst combination in the scoring model — indicating the company is currently in a meaningful contraction phase.
→StableGrowth
- Expectation
- Revenue growth recovers above 0% year-over-year within 12 months, removing the 0.0 growth score and establishing a positive trajectory.
CounterResidential construction revenue can be lumpy due to community closeouts and opening timing, and a single-quarter revenue decline may not reflect the underlying order backlog or future delivery pipeline.
RSI at 93 is extremely overbought and falls in the top 1% of historical readings, while falling on-balance volume at a near-52-week high signals late-cycle distribution — a pattern where large sellers are offloading shares into strength.
→StableMomentum breakdown
- Expectation
- RSI falls below 70 within 60 days as the stock consolidates from the overbought condition, and on-balance volume stabilizes or turns positive.
CounterRSI can remain elevated for extended periods during strong uptrends, and the golden cross MACD pattern suggests the underlying trend may support the elevated RSI reading temporarily.
The current price of $71.95 is above the analyst price target with -21.6% implied downside, and news sentiment of -0.50 combined with an elevated put/call ratio of 1.68 indicates that both the analyst community and options market are cautious on near-term prospects.
→StableBear case
- Expectation
- Analyst consensus price target rises above $78, more than 8% above the current price of $71.95, re-establishing positive asymmetry before any new position is considered.
CounterA C-suite officer departure or appointment — flagged in the 8-K warning — could signal strategic change that improves the outlook beyond what current analyst targets reflect.
Per-dimension breakdown
Quality
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.7 |
| ROA | 4.4 |
| Gross margin | 0.5 |
| Op margin | 4.5 |
| Net margin | 4.4 |
| Current ratio | 5.0 |
| FCF quality | 5.7 |
| Moat | 3.9 |
| Piotroski F | 6.7 |
- ▸Earnings quality warning: 75% FCF/NI
- ▸No competitive moat
Growth
0.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
| EPS growth | 0.0 |
- ▸Declining revenue: -27%
Momentum
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.8 |
| Analyst rating | 5.0 |
| Price target | 3.8 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.8 |
| quality rank | 5.3 |
| growth rank | 1.1 |
- ▸Attractive P/E vs peers
Technical
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.0 |
| support resistance | 5.4 |
| 52w position | 9.8 |
Risk (lower is worse)
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.0 |
| days to cover | 10.0 |
| volatility | 10.0 |
| put call | 5.3 |
| implied vol | 3.7 |
| max pain risk | 5.0 |
| beta | 5.2 |
| debt equity | 8.5 |
Catalyst
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 1.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 8.9 |
| news activity | 8.0 |
- ▸Estimates down -8.8% (30d)
- ▸Strong earnings: 3B/1M
- ▸Earnings in 12 days
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (4)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.0<4.5
- ASYMMETRY:-1.5=NEGATIVE
Warning (2)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
- EARNINGS_PROXIMITY:12d<=14d (soft)
Reward-to-Risk
-1.48
Upside
-22.2%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 12d with 3/4 beat streak
SuitabilityAggressive — Beta 1.44>1.3
Investment implication
The F-path SELL output reflects an overall score of 4.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Insider at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.0<4.5, ASYMMETRY:-1.5=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.48 — supplementary context, not the trigger for this path.
The strongest dimensions are Insider at 7.3, Value at 7.0, and Risk (lower is worse) at 6.8; the weakest are Growth at 0.0, Momentum at 3.0, and Peer rank at 4.1. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of -1.48 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Beat Attractive Value
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters, confirming that the beat streak has broken down as revenue contraction pressures the bottom line.
- P2Overbought Rsi Distribution Risk
Trip ifRSI remains above 80 for more than 30 consecutive trading days while on-balance volume continues to fall, confirming sustained overbought distribution rather than a temporary peak.
- P3Revenue Decline Growth Stall
Trip ifRevenue growth falls below -30% year-over-year in the next reported quarter, declining more than 3 percentage points below the already-negative -27% pace.
- P4Negative Sentiment Price Above Target
Trip ifAnalyst consensus price target falls below $60, more than 16% below the current price of $71.95, confirming that downside risk has increased beyond the current negative-asymmetry situation.