NYSE:TMHC
Taylor Morrison Home Corp
A premier builder of single-family homes in high-growth U.S. regions, delivering consistent cash flow through a scalable construction model.
Key Metrics
Investment Thesis
Bull Case
Investors might buy TMHC due to its strong cash generation capabilities and disciplined capital structure that allows for consistent dividend growth and buybacks. The company's focus on affordable single-family homes in underserved Sun Belt markets positions it well against more expensive luxury segments that are sensitive to rate hikes. A resilient balance sheet with over $850M in cash provides a safety margin that many competitors lack during potential market corrections.
Bear Case
Concerns persist regarding the sustainability of profit margins given the intense competition and potential for inventory buildups if sales slow further. The company's revenue trend shows some volatility, dipping below $7.5B in 2023 before recovering, which may indicate underlying demand weakness or cyclical headwinds. High levels of debt financing relative to equity could limit flexibility if credit conditions tighten or if the company needs to raise capital for land acquisitions.
About Taylor Morrison Home Corp
Taylor Morrison Home Corp (TMHC) is a leading U.S. homebuilder focused on constructing single-family homes primarily in the Sun Belt region and select coastal markets. The company serves middle-income buyers with custom and semi-custom residential properties, leveraging its 'Build to Buy' model to offer affordable yet high-quality housing solutions.
Analysis
Management Discussion
In 2025, the company reported revenue of $8.12B and net profit of $791.3M, reflecting a slight contraction from the prior year's $8.17B revenue but maintaining profitability above $790M. Operating cash flow remained robust at $817.3M, while capital expenditures were modest at $40.4M, indicating efficient resource allocation. The company also executed substantial share repurchases of $381.0M, demonstrating a commitment to shareholder value despite the challenging macroeconomic environment.
Industry Overview
The residential homebuilding industry is highly sensitive to economic cycles, interest rates, and demographic trends, with profitability often squeezed by rising material costs and labor shortages. National builders compete intensely on price and speed, while regional players like Taylor Morrison attempt to differentiate through specialized product offerings and geographic focus. Industry consolidation continues as weaker competitors exit the market, leaving room for larger entities with stronger balance sheets to gain market share.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $8.22B | $7.42B | $8.17B | $8.12B |
| Cost of Revenue | $6.13B | $5.63B | $6.18B | $6.25B |
| Gross Profit | $2.09B | $1.78B | $1.98B | $1.87B |
| Operating Expenses | $699.7M | $765.2M | $828.1M | $828.2M |
| Operating Income | $1.39B | $1.02B | $1.16B | $1.04B |
| G&A | $245.1M | $280.6M | $314.4M | $273.5M |
| Marketing | $398.1M | $418.1M | $456.1M | $461.5M |
| Stock-Based Comp | $26.9M | $26.1M | $22.5M | $29.0M |
| D&A | $33.8M | $33.4M | $41.2M | $40.2M |
| Depreciation | $7.6M | $9.0M | $11.5M | $7.5M |
| Other OpEx | $56.5M | $66.5M | $57.6M | $93.2M |
| Non-Operating Income | $0 | $0 | $0 | $0 |
| Pre-Tax Income | $1.39B | $1.02B | $1.16B | $1.04B |
| Income Tax | $336.4M | $248.1M | $269.5M | $250.8M |
| Continuing Ops | $1.06B | $769.7M | $886.6M | $791.3M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $1.06B | $769.7M | $886.6M | $791.3M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $1.06B | $769.7M | $886.6M | $791.3M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Cash & Equivalents | $724.5M | $798.6M | $487.2M | $850.0M |
| Inventory | — | — | $4.48B | $4.66B |
| Prepaid Expenses | $264.3M | $290.9M | $370.6M | $566.7M |
| PP&E (Net) | $202.4M | $295.1M | $232.7M | $259.0M |
| Goodwill | $663.2M | $663.2M | $663.2M | $663.2M |
| Total Assets | $8.47B | $8.67B | $9.30B | $9.84B |
| Total Liabilities | $3.82B | $3.34B | $3.42B | $3.53B |
| Shareholders' Equity | $4.65B | $5.33B | $5.88B | $6.31B |
| Paid-In Capital | $3.03B | $3.07B | $3.09B | $3.11B |
| Retained Earnings | $2.74B | $3.51B | $4.39B | $5.18B |
| AOCI | $359.0K | $896.0K | $2.5M | $2.6M |
| Treasury Stock | $1.14B | $1.27B | $1.62B | $2.00B |
| Total L&E | $8.47B | $8.67B | $9.30B | $9.84B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $1.06B | $769.7M | $886.6M | $791.3M |
| Non-Cash Adjustments | $142.0M | $-24.7M | $-1.79B | $-104.2M |
| Working Capital Changes | $-90.5M | $61.2M | $1.11B | $130.3M |
| Cash from Operations | $1.11B | $806.2M | $210.1M | $817.3M |
| Capital Expenditures | $30.6M | $33.4M | $36.3M | $40.4M |
| Cash from Investing | $-14.9M | $-97.2M | $-136.4M | $-154.8M |
| Share Buybacks | $376.3M | $128.0M | $347.6M | $381.0M |
| Cash from Financing | $-1.20B | $-628.5M | $-393.6M | $-298.5M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $-109.7M | $80.5M | $-319.9M | $364.1M |
| Beginning Cash | $836.3M | $726.6M | $807.1M | $487.2M |
| Ending Cash | $726.6M | $807.1M | $487.2M | $851.2M |
Frequently Asked Questions
How does Taylor Morrison Home Corp make money?
The company operates primarily through two main segments: the Single-Family Construction segment, which generates the vast majority of revenue from building and selling new residential units, and its Home Warranty Services segment, providing post-purchase protection plans to homeowners. Additional revenue streams include land development activities and strategic investments in real estate related entities that support its core construction operations.
What are the main risks for TMHC?
The company faces significant exposure to interest rate volatility, as rising rates can suppress buyer affordability and slow down home sales velocity. Inventory management remains a critical risk, with potential write-downs if housing starts are reduced or if market absorption slows unexpectedly. Regulatory changes in zoning laws or environmental regulations could impact development timelines and costs in its key markets.
What is TMHC's competitive advantage?
Taylor Morrison benefits from a highly scalable 'Build to Buy' model that reduces inventory carrying costs by building homes only after securing buyer commitments. The company maintains a strong balance sheet with significant cash reserves, providing flexibility during economic downturns and allowing for strategic share repurchases to return capital to shareholders. Its focused geographic footprint in high-growth Sun Belt states offers favorable demographics and lower exposure to oversupply compared to national competitors.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.