Although the homebuilding industry is facing challenges like high mortgage rates and rising costs, Meritage Homes Corporation (NYSE: MTH) is likely to benefit from improved cycle times and spec strategy implementation. The company's focus on entry-level and first-move-up homes will likely produce a higher volume in the future. Shares of this Scottsdale, AZ-based homebuilding company have appreciated 10.9% in the past year compared with the Zacks Building Products - Home Builders industry's 18.9% rise. The company reported impressive first-quarter 2024 results, demonstrating its strong performance amid challenging industry conditions. Despite market volatility, earnings and total closing revenues increased on a year-over-year basis by 42.9% and 14.5%, respectively, on the back of higher deliveries and adjusted gross margin (up 340 basis points year over year). Total home orders also rose 14% year over year, driven by strong demand and a low cancellation rate of 8%, supported by the right amount of available inventory. Image Source: Zacks Investment Research Let's discuss the factors supporting positive investor sentiments amid headwinds. What Makes the Stock Attractive? Solid Spec Strategy: The company's spec homes are built without a prior buyer lineup, focusing on efficient construction quality and desired features. Meritage Homes' strategy in speculative homebuilding has been consistently driving its revenues. By maintaining a few months' supply of move-in-ready homes based on community-level sales, MTH reduces wait times for buyers compared with traditional methods. This approach also supports a lower average selling price, stimulating demand in the market. Home closings rose 21% year over year in first-quarter 2024. Its spec-building strategy resulted in 3,507 homes delivered. Solid execution on its spec building and streamlined strategy helped it achieve yet ...