Taylor Morrison Home Corporation (TMHC): BCG Matrix [Dec-2025 Updated]

You're looking for a clear-eyed view of Taylor Morrison Home Corporation's business segments as of late 2025, and honestly, the BCG Matrix is the defintely the right tool to map their capital allocation priorities. We see the core homebuilding engine, especially the Move-Up segment at 47% of sales, firmly positioned as a Star alongside high-margin Cash Cows like Financial Services boasting a 52.5% gross margin and $1.3 billion in liquidity. But the map also highlights near-term pressure points, like the shrinking Entry-Level business and the capital-intensive push into YARDLY Build-to-Rent across 9 markets, which are clear Question Marks needing decisive action. Let's break down where Taylor Morrison Home Corporation is currently printing cash and where it needs to place its next big bet.

Background of Taylor Morrison Home Corporation (TMHC)

You're looking at one of the biggest players in the U.S. homebuilding space, Taylor Morrison Home Corporation (TMHC). The company officially started in 2007 when Taylor Woodrow and Morrison Homes combined their operations. Headquartered in Scottsdale, Arizona, TMHC has been led by Sheryl Palmer as Chairman and CEO since its formation. TMHC went public with an Initial Public Offering in 2013 on the New York Stock Exchange.

Taylor Morrison specializes in designing, building, and selling single-family homes, townhomes, and condominiums. They target a broad spectrum of buyers, from first-time purchasers to those seeking mid-to-upscale housing. The company operates across several high-growth U.S. markets, including Texas, Florida, California, Colorado, and Georgia. They also focus on developing lifestyle and master-planned communities and have a presence in the build-to-rent sector.

Financially speaking, the company has shown solid scale. For the full year 2024, Taylor Morrison Home Corporation reported revenue of $8.168 billion, which was an increase of 10.11% year-over-year. Looking at the more recent data, the trailing twelve-month revenue as of September 30, 2025, stood at $8.38B. The business is structured into four main segments: East, Central, West, and Financial Services, with the West segment typically driving the bulk of the revenue.

For the third quarter ending September 30, 2025, the company completed 3,324 home closings, generating home closings revenue of $2.0 billion, with an average sales price of $602,000. The company's wholly-owned financial services segment also contributes, reporting a mortgage capture rate of 87% in the second quarter of 2025. As of late 2025, the firm's market capitalization was approximately $5.92B.

Taylor Morrison Home Corporation (TMHC) - BCG Matrix: Stars

You're looking at the segments of Taylor Morrison Home Corporation (TMHC) that are driving top-line growth and commanding significant market presence in expanding areas. These are the Stars-businesses with high market share in markets that are still growing fast, which is why they consume capital but promise future Cash Cow status if they maintain their success.

The Resort Lifestyle segment, branded as Esplanade, is definitely a key growth driver here. This segment is fueled by strong demographic tailwinds, and Taylor Morrison Home Corporation expects to double the Esplanade deliveries over the next few years as part of its long-term plan. For context, in the first quarter of 2025, this segment represented about 21% of the company's product mix by volume. The strategic focus is clear: expansion into high-demand areas, such as the recent groundbreaking for Esplanade at Red Rock in Las Vegas, which will bring nearly 400 homes to the market.

The Move-Up segment remains the largest consumer group for Taylor Morrison Home Corporation, targeted for continued market share gains. This group accounted for approximately 47% of the company's product mix as of the first quarter of 2025. While this segment is the largest by volume, recent data showed a modest decline in net sales for this group in Q1 2025, making the strategic focus on market share gains even more critical to maintain its Star positioning.

Taylor Morrison Home Corporation's overall ambition anchors these segments. The company has set a clear long-term goal to achieve at least 10% annual home closings growth through 2028. This positions the core homebuilding operations for high relative growth, aiming for approximately 20,000 annual home closings by 2028. The company is backing this with significant investment, planning to invest $12 billion over the next three years and open more than 600 communities.

Here's a quick look at how the key growth segments stack up against the overall company target:

The strategy for these Stars involves continued investment to secure market leadership. You see this commitment in the land control metrics, with Taylor Morrison Home Corporation targeting control of at least 65% of its homebuilding lots to ensure supply for this growth. The company's financial targets also reflect the need to fund this growth while maintaining profitability, targeting a home closings gross margin in the low-to-mid 20% range.

The operational focus supporting these Stars includes:

• Expanding the Esplanade footprint to nearly 30 communities across the country.
• Maintaining a balanced mix of to-be-built and spec homes long-term, though spec sales penetration reached 71% in Q2 2025.
• Focusing on high-growth Sunbelt markets where expansion of community count is a priority.
• Aiming for a high-teen range return on equity as these investments mature.

Finance: review the capital allocation plan for the next 12 months against the $12 billion investment commitment by end of next week.

Taylor Morrison Home Corporation (TMHC) - BCG Matrix: Cash Cows

Cash Cows for Taylor Morrison Home Corporation (TMHC) are characterized by high market share in mature segments, generating substantial cash flow that supports other portfolio segments. These units require minimal new investment to maintain their position.

The Financial Services segment exemplifies this characteristic within Taylor Morrison Home Corporation (TMHC).

This internal service provides a stable, high-profit revenue stream, which is a hallmark of a strong Cash Cow. The high capture rate minimizes capital intensity for revenue generation in this area.

The core homebuilding operations, while subject to market growth fluctuations, provide the bulk of the underlying cash generation, with the full-year 2025 adjusted gross margin guided at approximately 23%. This margin level, sustained across a large volume of closings, solidifies the cash-generating nature of the primary business.

The strength of these cash flows is evident in the overall financial position.

• Financial Services segment gross margin: 52.5% (Q3 2025)
• Mortgage capture rate: 88% (Q3 2025)
• Full-year 2025 adjusted home closings gross margin guidance: approximately 23%
• Total liquidity: approximately $1.3 billion (Q3 2025)

The strong balance sheet and liquidity of approximately $1.3 billion (Q3 2025) is the direct result of these cash-generating units. This capital is positioned to fund Stars and Question Marks, which require investment to grow market share.

Cash Cow characteristics for Taylor Morrison Home Corporation (TMHC) include:

• High market share in a mature segment.
• Achieved high profit margins.
• Generate significant cash flow.
• Low promotion and placement investments.

Taylor Morrison Home Corporation (TMHC) - BCG Matrix: Dogs

Dogs, are units or products with a low market share and low growth rates. They frequently break even, neither earning nor consuming much cash. Dogs are generally considered cash traps because businesses have money tied up in them, even though they bring back almost nothing in return. These business units are prime candidates for divestiture.

Dogs are in low growth markets and have low market share. You should avoid and minimize these areas. To be fair, expensive turn-around plans usually do not help much here.

Here's the quick math on the specific areas within Taylor Morrison Home Corporation (TMHC) that fit this low-growth, low-share profile as of the third quarter of 2025.

Land Closings Revenue is a low-focus, declining segment, generating only $5.7 million in Q3 2025. This small revenue contribution suggests it is not a primary driver of current operational success, fitting the profile of a unit that requires minimal capital allocation.

The Entry-Level segment has seen a year-over-year pullback and a steeper reduction in sales compared to other segments due to affordability pressures. Management noted adjusting pricing and incentives specifically in entry-level price points to manage sales velocity. This indicates that this product tier is operating in a constrained market environment relative to TMHC's other offerings.

You're facing near-term pressure from elevated spec inventory. This is a direct headwind, expected to pressure gross margins toward the low end of the guidance range. For the fourth quarter of 2025, the company guided the home closings gross margin to approximately 21.5%, which is below the full-year adjusted target of approximately 23%.

The overall order book signals a need for immediate sales conversion focus. Backlog is down nearly 40% in dollar terms year-over-year as of Q3 2025. This decline is stark when you compare the figures:

This drop from $3.8 billion in Q3 2024 to $2.3 billion in Q3 2025 represents a decline of approximately 39.5% in backlog value, confirming the stated headwind.

The current state of the backlog and order flow suggests that converting existing commitments is paramount over generating new, low-quality volume in these challenged areas. You need to watch the sales pace closely.

• Net Sales Orders for Q3 2025 totaled 2,468 homes, a decline of 13% year-over-year.
• The monthly absorption pace moderated to 2.4 per community in Q3 2025.
• Cancellations equaled 15.4% of gross orders in Q3 2025, up from 9.3% a year ago.

Finance: draft 13-week cash view by Friday.

Taylor Morrison Home Corporation (TMHC) - BCG Matrix: Question Marks

You're looking at the segments of Taylor Morrison Home Corporation (TMHC) that are in high-growth areas but haven't yet captured significant market share. These areas consume cash now, hoping to become future Stars. They need quick market share gains, or they risk becoming Dogs.

The YARDLY Build-to-Rent (BTR) business is a prime example of this quadrant for Taylor Morrison Home Corporation (TMHC). This brand is actively expanding its footprint across 9 markets. While this segment addresses high demand from consumers facing affordability challenges in home ownership, it remains a smaller part of the overall portfolio compared to the core homebuilding business. As of the first quarter of 2025, the brand had approximately 40 owned and controlled communities, with 36 such communities built across Arizona, Florida, North Carolina, and Texas as of July 2025. Taylor Morrison Home Corporation (TMHC) is investing heavily, securing a $3 billion land and construction facility agreement with Kennedy Lewis Investment Management (KLIM) specifically to accelerate Yardly's growth.

Digital Innovation initiatives also fall into this high-growth, low-share category, demanding significant upfront capital with returns still being proven in terms of market share capture. Taylor Morrison Home Corporation (TMHC) announced plans to invest $12 billion over the next three years starting in 2025. Early results show the online sales platform contributes approximately 20% of total sales, with a reservation-to-sales conversion rate exceeding 50% in the first quarter of 2025. Furthermore, Canvas design package investments have reduced design product SKUs by nearly 80% in five years and saved customers 60 days by eliminating design studio visits after contract signing.

The push for new community count growth is inherently capital-intensive, as it requires deploying capital to secure and develop land before sales velocity is established. As of the third quarter of 2025, Taylor Morrison Home Corporation (TMHC) had 349 active selling communities. The goal is to achieve a low-three range annualized monthly sales pace across these new and existing outlets. The actual pace in the third quarter of 2025 was 2.4 net sales orders per community.

The strategy of aggressively controlling lot supply off-balance sheet is a high-risk, high-reward bet on future market recovery, fitting the Question Mark profile perfectly. This strategy aims to maintain a land-lighter position while securing future build capacity. As of the third quarter of 2025, Taylor Morrison Home Corporation (TMHC) held 84,564 homebuilding lots owned and controlled, with 60% of that supply controlled off-balance sheet. This represents an increase from 58% controlled off-balance sheet a year prior. The long-term target for controlled lots is at least 65%.

Here is a snapshot of the key metrics associated with these Question Mark areas as of the third quarter of 2025, where available:

The cash consumption is evident in the land investment figures supporting future growth, including the BTR segment. Total homebuilding land investment for the third quarter of 2025 was $533 million.

• Yardly BTR expansion is supported by a $3 billion financing facility.
• Digital transformation efforts have already saved customers 60 days in the design process.
• The targeted sales pace for new communities is in the low-three range annualized monthly sales pace.
• The off-balance sheet lot control strategy aims for at least 65% controlled lots long-term.