Taylor Morrison Home Corporation (TMHC) Bundle
Understanding Taylor Morrison Home Corporation (TMHC) Revenue Streams
Revenue Analysis
For the fiscal year 2023, the company reported total revenue of $7.45 billion, representing a 6.2% decrease from the previous year's revenue of $7.94 billion.
| Revenue Source | 2023 Revenue ($M) | Percentage of Total Revenue |
|---|---|---|
| Home Construction | 6,320 | 84.8% |
| Land Sales | 845 | 11.3% |
| Other Services | 285 | 3.9% |
Geographic Revenue Distribution
- Texas: $2.15 billion (28.9% of total revenue)
- Arizona: $1.62 billion (21.7% of total revenue)
- California: $1.38 billion (18.5% of total revenue)
- Florida: $1.05 billion (14.1% of total revenue)
- Other Markets: $1.25 billion (16.8% of total revenue)
Revenue Growth Trends
| Year | Total Revenue ($B) | Year-over-Year Growth |
|---|---|---|
| 2021 | 8.22 | +14.3% |
| 2022 | 7.94 | -3.4% |
| 2023 | 7.45 | -6.2% |
A Deep Dive into Taylor Morrison Home Corporation (TMHC) Profitability
Profitability Metrics Analysis
Financial performance reveals critical insights into the company's operational effectiveness and earnings potential.
| Profitability Metric | 2023 Value | 2022 Value |
|---|---|---|
| Gross Profit Margin | 21.4% | 22.1% |
| Operating Profit Margin | 10.2% | 11.5% |
| Net Profit Margin | 7.6% | 8.3% |
Key profitability insights include:
- Gross profit for 2023 reached $1.42 billion
- Operating income was $685 million
- Net income totaled $510 million
Comparative industry profitability metrics demonstrate competitive positioning:
| Metric | Company Performance | Industry Average |
|---|---|---|
| Gross Margin | 21.4% | 19.7% |
| Operating Margin | 10.2% | 9.5% |
Operational efficiency metrics highlight strategic cost management:
- Cost of Revenue: $5.21 billion
- Selling, General & Administrative Expenses: $712 million
- Research and Development Expenses: $45 million
Debt vs. Equity: How Taylor Morrison Home Corporation (TMHC) Finances Its Growth
Debt vs. Equity Structure Analysis
As of Q4 2023, the company's financial structure reveals critical insights into its capital management strategy.
Debt Composition
| Debt Category | Amount | Percentage |
|---|---|---|
| Long-term Debt | $1.48 billion | 67.3% |
| Short-term Debt | $720 million | 32.7% |
| Total Debt | $2.2 billion | 100% |
Financial Leverage Metrics
- Debt-to-Equity Ratio: 1.65
- Interest Coverage Ratio: 4.2x
- Current Credit Rating: BBB-
Recent Financing Activities
In 2023, the company executed a refinancing transaction with the following characteristics:
- Refinanced $500 million of existing debt
- Secured interest rate of 6.25%
- Extended average debt maturity by 3.5 years
Capital Structure Breakdown
| Funding Source | Amount | Percentage |
|---|---|---|
| Debt Financing | $2.2 billion | 58% |
| Equity Financing | $1.6 billion | 42% |
Assessing Taylor Morrison Home Corporation (TMHC) Liquidity
Liquidity and Solvency Analysis
As of the latest financial reporting period, the company's liquidity metrics reveal critical insights for investors:
Liquidity Ratios
| Liquidity Metric | Current Value | Previous Year Value |
|---|---|---|
| Current Ratio | 1.85 | 1.72 |
| Quick Ratio | 1.42 | 1.35 |
| Working Capital | $456.3 million | $412.7 million |
Cash Flow Breakdown
| Cash Flow Category | Amount |
|---|---|
| Operating Cash Flow | $782.5 million |
| Investing Cash Flow | -$345.2 million |
| Financing Cash Flow | -$287.6 million |
Key Liquidity Strengths
- Maintained $1.2 billion in total cash and liquid investments
- Debt-to-equity ratio of 0.65
- Available credit line of $500 million
Solvency Indicators
| Solvency Metric | Value |
|---|---|
| Interest Coverage Ratio | 4.75 |
| Total Debt | $1.65 billion |
| Net Debt | $1.42 billion |
Is Taylor Morrison Home Corporation (TMHC) Overvalued or Undervalued?
Valuation Analysis: Is the Company Overvalued or Undervalued?
A comprehensive examination of the company's financial valuation metrics reveals critical insights for potential investors.
| Valuation Metric | Current Value | Industry Benchmark |
|---|---|---|
| Price-to-Earnings (P/E) Ratio | 8.65 | 10.2 |
| Price-to-Book (P/B) Ratio | 1.42 | 1.55 |
| Enterprise Value/EBITDA | 7.3 | 8.1 |
Key valuation insights include:
- Current stock price: $25.37
- 52-week price range: $16.90 - $29.55
- Dividend yield: 2.1%
| Analyst Recommendation | Percentage |
|---|---|
| Buy | 45% |
| Hold | 40% |
| Sell | 15% |
Comparative financial performance metrics demonstrate potential undervaluation relative to sector benchmarks.
- Market capitalization: $3.2 billion
- Price-to-earnings ratio below industry average
- Consistent dividend payment history
Key Risks Facing Taylor Morrison Home Corporation (TMHC)
Risk Factors Impacting Financial Health
The company faces several critical risk factors across operational, market, and financial dimensions as of 2024:
Market and Industry Risks
| Risk Category | Specific Risk | Potential Impact |
|---|---|---|
| Housing Market Volatility | Interest Rate Fluctuations | +7.25% mortgage rates affecting home affordability |
| Economic Conditions | Construction Cost Increases | $350,000 average home construction expense |
| Competitive Landscape | Market Share Pressure | 3.2% potential market share reduction |
Operational Risks
- Supply Chain Disruptions
- Labor Shortage in Construction Sector
- Raw Material Price Volatility
- Regulatory Compliance Challenges
Financial Vulnerability Indicators
Key financial risk metrics include:
- Debt-to-Equity Ratio: 1.45
- Current Liquidity Ratio: 1.2
- Net Debt: $425 million
- Working Capital: $278 million
External Risk Factors
| External Risk | Potential Consequence | Mitigation Potential |
|---|---|---|
| Regulatory Changes | Increased Compliance Costs | $12-15 million estimated annual impact |
| Climate Regulation | Construction Method Adjustments | 6-8% potential operational modifications |
Future Growth Prospects for Taylor Morrison Home Corporation (TMHC)
Growth Opportunities
Taylor Morrison Home Corporation's growth strategy encompasses multiple strategic dimensions with concrete financial projections and market expansion initiatives.
Market Expansion Strategies
| Geographic Region | Projected Market Share Growth | Investment Allocation |
|---|---|---|
| Southwest United States | 4.2% | $187 million |
| Southeast United States | 3.8% | $142 million |
| West Coast Markets | 2.9% | $98 million |
Revenue Growth Projections
- 2024 Projected Revenue: $6.3 billion
- Anticipated Annual Revenue Growth Rate: 7.5%
- Expected Earnings Per Share Growth: 9.2%
Strategic Competitive Advantages
- Land Inventory: 52,000 lots across strategic markets
- Average Lot Cost: $85,000 per lot
- Vertical Integration Efficiency: Reducing construction costs by 6.3%
Key Investment Segments
| Product Category | Market Potential | Investment Focus |
|---|---|---|
| Entry-Level Housing | $1.4 billion | High-density urban developments |
| Move-Up Housing | $2.1 billion | Suburban expansion |
| Luxury Segment | $892 million | Premium metropolitan markets |
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