As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the home builders industry, including Champion Homes (NYSE: SKY) and its peers.

Traditionally, homebuilders have built competitive advantages with economies of scale that lead to advantaged purchasing and brand recognition among consumers. Aesthetic trends have always been important in the space, but more recently, energy efficiency and conservation are driving innovation. However, these companies are still at the whim of the macro, specifically interest rates that heavily impact new and existing home sales. In fact, homebuilders are one of the most cyclical subsectors within industrials.

The 11 home builders stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 2.8% while next quarter’s revenue guidance was in line.

Thankfully, share prices of the companies have been resilient as they are up 7% on average since the latest earnings results.

Best Q3: Champion Homes (NYSE: SKY)

Founded in 1951, Champion Homes (NYSE: SKY) is a manufacturer of modular homes and buildings in North America.

Champion Homes reported revenues of $684.4 million, up 11% year on year. This print exceeded analysts’ expectations by 6.9%. Overall, it was an incredible quarter for the company with a solid beat of analysts’ EBITDA estimates.

Champion Homes pulled off the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 28.1% since reporting and currently trades at $85.19.

Is now the time to buy Champion Homes? Access our full analysis of the earnings results here, it’s free for active Edge members.

Installed Building Products (NYSE: IBP)

Founded in 1977, Installed Building Products (NYSE: IBP) is a company specializing in the installation of insulation, waterproofing, and other complementary building products for residential and commercial construction.

Installed Building Products reported revenues of $778.2 million, up 2.3% year on year, outperforming analysts’ expectations by 4%. The business had a stunning quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.

The market seems happy with the results as the stock is up 10.6% since reporting. It currently trades at $263.22.

Is now the time to buy Installed Building Products? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Meritage Homes (NYSE: MTH)

Originally founded in 1985 in Arizona as Monterey Homes, Meritage Homes (NYSE: MTH) is a homebuilder specializing in designing and constructing energy-efficient and single-family homes in the US.

Meritage Homes reported revenues of $1.42 billion, down 10.8% year on year, falling short of analysts’ expectations by 3.4%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue estimates and a significant miss of analysts’ adjusted operating income estimates.

Meritage Homes delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 3% since the results and currently trades at $73.18.

Read our full analysis of Meritage Homes’s results here.

Taylor Morrison Home (NYSE: TMHC)

Named “America’s Most Trusted Home Builder” in 2019, Taylor Morrison Home (NYSE: TMHC) builds single family homes and communities across the United States.

Taylor Morrison Home reported revenues of $2.10 billion, down 1.2% year on year. This number surpassed analysts’ expectations by 3.4%. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.

The stock is flat since reporting and currently trades at $63.

Read our full, actionable report on Taylor Morrison Home here, it’s free for active Edge members.

D.R. Horton (NYSE: DHI)

One of the largest homebuilding companies in the U.S., D.R. Horton (NYSE: DHI) builds a variety of new construction homes across multiple markets.

D.R. Horton reported revenues of $9.68 billion, down 3.2% year on year. This result beat analysts’ expectations by 2.7%. Zooming out, it was a slower quarter as it produced a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.

The stock is flat since reporting and currently trades at $158.47.

Read our full, actionable report on D.R. Horton here, it’s free for active Edge members.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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