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M/I Homes (MHO)
NYSE:MHO
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M/I Homes
(NYSE:MHO)
76Outperform
M/I Homes (MHO) vs. S&P 500 (SPY)
Market Cap
$3.10B
Dividend YieldN/A
Average Volume (3M)284.79K
Price to Earnings (P/E)5.9
Beta (1Y)1.83
Revenue Growth11.84%
EPS Growth21.14%
CountryUS
Employees1,760
SectorConsumer Cyclical
Sector Strength55
IndustryResidential Construction
Share Statistics
EPS (TTM)19.71
Shares Outstanding27,114,450
10 Day Avg. Volume247,675
30 Day Avg. Volume284,786
Financial Highlights & Ratios
PEG Ratio0.28
Price to Book (P/B)N/A
Price to Sales (P/S)0.70
Price to Cash Flow (P/CF)7.50
P/FCF Ratio7.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$159.50Price Target Upside46.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
M/I Homes Business Overview & Revenue Model
Company DescriptionM/I Homes, Inc., together with its subsidiaries, operates as a builder of single-family homes in Ohio, Indiana, Illinois, Minnesota, Michigan, Florida, Texas, North Carolina, and Tennessee. The company operates through Northern Homebuilding, Southern Homebuilding, and Financial Services segments. It designs, constructs, markets, and sells single-family homes and attached townhomes to first-time, millennial, move-up, empty-nester, and luxury buyers under the M/I Homes brand name. The company also purchases undeveloped land to develop into developed lots for the construction of single-family homes, as well as for sale to others. In addition, it originates and sells mortgages; and serves as a title insurance agent by providing title insurance policies, examination, and closing services to purchasers of its homes. The company was formerly known as M/I Schottenstein Homes, Inc. and changed its name to M/I Homes, Inc. in January 2004. M/I Homes, Inc. was founded in 1976 and is based in Columbus, Ohio.
How the Company Makes MoneyM/I Homes generates revenue primarily through the sale of newly constructed homes. The company's homebuilding segment is the largest contributor to its revenue, encompassing the design, construction, and sale of single-family homes. Revenue is recognized when the homes are delivered to buyers. In addition to home sales, M/I Homes earns income through its financial services division, which provides mortgage financing and title services to homebuyers. This vertical integration allows the company to capture additional revenue through loan origination fees and other related financial services. Strategic partnerships with local contractors and suppliers help M/I Homes manage costs and maintain competitive pricing, further supporting its profitability.
M/I Homes Financial Statement Overview
Summary
M/I Homes shows strong financial health with robust profitability, efficient operations, and a solid equity position. The income statement reflects high margins and revenue growth, while the balance sheet indicates low leverage. Cash flow performance is moderate with room for improvement in cash conversion efficiency.Income Statement
M/I Homes has demonstrated robust income statement performance with high gross profit margins at 26.56% for TTM and net profit margins at 12.52%. The company has shown consistent revenue growth, increasing from $4.03 billion to $4.50 billion in the TTM period, marking a growth rate of 11.60%. EBIT and EBITDA margins are strong at 15.55% and 16.02% respectively, indicating efficient operations and profitability.85
Very Positive
Balance Sheet
The balance sheet shows a solid equity position with a high equity ratio of 100% due to stockholders' equity equaling total assets in the TTM period. The debt-to-equity ratio is 0.22, suggesting low leverage. However, the return on equity is moderate at 12.39%, indicating room for improving returns on shareholder investments.80
Positive
Cash Flow
Cash flow performance is sound, with operating cash flow to net income ratio at 0.32, showing positive cash generation from operations. The free cash flow growth rate is slightly negative at -68.24%, reflecting some volatility. The free cash flow to net income ratio is 0.31, suggesting moderate conversion of income to free cash.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.50B | 4.03B | 4.13B | 3.75B | 3.05B |
| Gross Profit | ||||
| 1.20B | 1.02B | 1.04B | 908.91M | 676.34M |
| EBIT | ||||
| 706.09M | 576.86M | 637.45M | 518.30M | 319.26M |
| EBITDA | ||||
| 721.55M | 601.72M | 652.06M | 532.63M | 339.83M |
| Net Income Common Stockholders | ||||
| 563.73M | 465.37M | 490.66M | 396.87M | 239.87M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 821.57M | 732.80M | 311.54M | 236.37M | 260.81M |
| Total Assets | ||||
| 4.55B | 4.02B | 3.71B | 3.24B | 2.64B |
| Total Debt | ||||
| 1.04B | 917.15M | 999.52M | 1.01B | 924.35M |
| Net Debt | ||||
| -821.57M | 184.35M | 687.98M | 777.11M | 663.54M |
| Total Liabilities | ||||
| 1.61B | 1.51B | 1.64B | 1.62B | 1.38B |
| Stockholders Equity | ||||
| 2.94B | 2.52B | 2.07B | 1.62B | 1.26B |
| Cash Flow | Free Cash Flow | |||
| 171.32M | 546.36M | 174.74M | -42.12M | 156.66M |
| Operating Cash Flow | ||||
| 179.74M | 552.13M | 184.07M | -16.82M | 168.33M |
| Investing Cash Flow | ||||
| -54.90M | -18.63M | -27.38M | -51.72M | -33.87M |
| Financing Cash Flow | ||||
| -36.07M | -112.24M | -81.52M | 44.10M | 120.26M |
M/I Homes Technical Analysis
Negative
109.10
Price Trends
119.69
Negative
133.88
Negative
142.87
Negative
Market Momentum
-1.54
Positive
41.85
Neutral
27.63
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MHO, the sentiment is Negative. The current price of 109.1 is below the 20-day moving average (MA) of 116.61, below the 50-day MA of 119.69, and below the 200-day MA of 142.87, indicating a bearish trend. The MACD of -1.54 indicates Positive momentum. The RSI at 41.85 is Neutral, neither overbought nor oversold. The STOCH value of 27.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MHO.
M/I Homes Risk Analysis
M/I Homes disclosed 31 risk factors in its most recent earnings report. M/I Homes reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
M/I Homes Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $40.15B | 9.00 | 19.35% | 1.14% | 2.12% | 1.63% | |
76 Outperform | $3.10B | 5.87 | 20.66% | ― | 11.84% | 21.14% | |
74 Outperform | $20.77B | 7.01 | 27.40% | 0.86% | 11.74% | 25.66% | |
69 Neutral | $10.47B | 7.25 | 20.38% | 0.94% | 5.86% | 12.20% | |
68 Neutral | $30.08B | 8.34 | 14.99% | 1.85% | 2.06% | -3.67% | |
66 Neutral | $21.11B | 14.01 | 39.23% | ― | 10.81% | 10.16% | |
59 Neutral | $12.18B | 11.09 | -1.08% | 3.77% | 1.26% | -19.82% |
* Consumer Cyclical Sector Average
Performance Comparison
MHO
M/I Homes
109.10
-15.10
-12.16%
DHI
DR Horton
122.31
-32.40
-20.94%
LEN
Lennar
108.40
-46.78
-30.15%
NVR
NVR
7,109.99
-680.01
-8.73%
PHM
PulteGroup
97.75
-15.27
-13.51%
TOL
Toll Brothers
98.39
-23.95
-19.58%
M/I Homes Earnings Call Summary
Earnings Call Date: Jan 29, 2025 | % Change Since: -19.34% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
M/I Homes had a record year in 2024 with strong financial performance and strategic growth in new contracts and lot supply. However, the company faced challenges in the fourth quarter due to rising mortgage rates and specific market pressures, particularly in Tampa. Despite some margin compression, the company remains optimistic about future growth and demand.Highlights
Record Year in 2024
M/I Homes achieved record homes delivered, record revenue of $4.5 billion (12% increase over 2023), record income, and strong returns in 2024.
Improved Margins
Gross margins for 2024 were 26.6%, 130 basis points better than 2023. Pre-tax margin improved to 16.3% compared to 15.1% in 2023.
Strong Financial Position
Ended the year with $2.9 billion in equity, no borrowings under $650 million credit facility, and $800 million in cash. Debt-to-capital ratio decreased to 19% from 22%.
Increase in New Contracts
New contracts increased 4% in Southern region and 12% in Northern region for the year. Fourth quarter new contracts were up 11% compared to last year.
Significant Lot Supply
Own and control over 52,000 single-family lots, representing a 5.5-year supply, up 14% from the previous year.
Mortgage Company Growth
Pre-tax income for mortgage operations increased to $10 million in the fourth quarter, with revenues up 45% over last year.
Lowlights
Challenging Demand Environment
Demand became choppier and more challenging in several markets during the fourth quarter, with rising mortgage rates impacting sales.
Decreased Fourth Quarter Gross Margin
Fourth quarter gross margin decreased to 24.6%, down 50 basis points year-over-year and 250 basis points sequentially due to mortgage rate buy-down incentives.
Challenges in Tampa Market
Tampa market experienced more challenges compared to Orlando and other Florida regions, with demand softening.
Increased SG&A Expenses
SG&A expenses increased by 16% in the fourth quarter, primarily due to higher incentive compensation and increased community count.
Company Guidance
In the fourth quarter and year-end earnings call for M/I Homes, the company provided detailed guidance on its financial performance for fiscal year 2024. The company achieved record homes delivered, with a total of 9,055 homes, marking a 12% increase from the previous year. This contributed to a record revenue of $4.5 billion, also a 12% increase over 2023. Gross margins for the year were 26.6%, improving by 130 basis points year-over-year, while the pre-tax margin rose to 16.3% from 15.1% in 2023. Pre-tax income reached a record $734 million, a 21% increase from the prior year, alongside a return on equity of 21%. The company's average community count grew by 7% over 2023, and it plans a further 5% growth in 2025. The Southern region led with a 14% increase in deliveries during the fourth quarter, while the Northern region saw a 25% increase. M/I Homes ended the year with a substantial land position, owning approximately 23,800 lots and controlling an additional 28,400 lots, which equates to a 5.5-year supply. Financially, the company reported an all-time high equity of $2.9 billion, a debt-to-capital ratio of 19%, and a net debt-to-capital ratio of negative 5%. The company intends to continue using mortgage rate buy-downs to address homebuyer affordability and demand challenges, although it anticipates some compression in gross margins in 2025. Despite these challenges, the company remains optimistic about the long-term prospects of the homebuilding industry, supported by underlying consumer demographics and household formation trends.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.