M/I Homes (MHO) AI Stock Analysis

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M/I Homes

(NYSE:MHO)

74Outperform

M/I Homes shows strong financial health and profitability, supported by a solid balance sheet and robust equity position. However, technical analysis indicates bearish momentum, and cash flow volatility presents a risk. The valuation suggests potential undervaluation, while earnings call insights reflect both achievements and challenges. The overall sentiment is cautiously optimistic, with strategic plans to address current market conditions.

M/I Homes (MHO) vs. S&P 500 (SPY)

Market Cap

$2.87B

Dividend YieldN/A

Average Volume (3M)270.69K

Price to Earnings (P/E)5.7

Beta (1Y)1.24

Revenue Growth8.75%

EPS Growth8.39%

CountryUS

Employees1,760

SectorConsumer Cyclical

Sector Strength56

IndustryResidential Construction

Share Statistics

EPS (TTM)18.91

Shares Outstanding26,772,621

10 Day Avg. Volume254,468

30 Day Avg. Volume270,689

Financial Highlights & Ratios

PEG Ratio0.68

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

$159.50

Price Target Upside48.76% 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

Very Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Negative

Last Price107.22

Price Trends

50DMA

114.62

Negative

100DMA

127.13

Negative

200DMA

142.04

Negative

Market Momentum

MACD

-3.06

Negative

RSI

42.46

Neutral

STOCH

42.82

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 107.22 is below the 20-day moving average (MA) of 109.73, below the 50-day MA of 114.62, and below the 200-day MA of 142.04, indicating a bearish trend. The MACD of -3.06 indicates Negative momentum. The RSI at 42.46 is Neutral, neither overbought nor oversold. The STOCH value of 42.82 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 (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GRBK	81 Outperform	$2.54B	6.81	26.08%	―	18.07%	36.74%
TPH	76 Outperform	$2.84B	6.40	13.28%	―	10.82%	19.34%
MHO	74 Outperform	$2.87B	5.67	19.02%	―	8.75%	8.39%
CCS	68 Neutral	$1.89B	5.92	12.36%	1.74%	11.08%	8.31%
KBH	63 Neutral	$3.89B	6.62	15.58%	1.87%	5.54%	11.12%
Sector *	60 Neutral	$6.78B	11.63	3.24%	4.20%	2.36%	-21.91%
LGIH	48 Neutral	$1.42B	7.20	10.07%	―	-6.61%	-1.56%

* Consumer Cyclical Sector Average

Performance Comparison

MHO

M/I Homes

107.22

-13.07

-10.87%

KBH

KB Home

54.27

-9.12

-14.39%

TPH

Tri Pointe

30.86

-5.96

-16.19%

LGIH

LGI Homes

60.23

-34.65

-36.52%

CCS

Century Communities

56.29

-21.06

-27.23%

GRBK

Green Brick Partners

57.97

3.51

6.45%

M/I Homes Earnings Call Summary

Earnings Call Date: Apr 23, 2025 | % Change Since: -1.93% | Next Earnings Date: Jul 23, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a mix of positive financial metrics, such as strong gross margins and an increased community count, along with challenges like declining new contracts, revenues, and pressures on gross margins. The company maintains a robust equity position and successful mortgage operations. Despite challenges, the overall sentiment for future performance remains optimistic.

Highlights

Strong Gross Margin

The company reported a strong gross margin of 25.9% for the first quarter, which is a sequential improvement over the previous quarter, despite challenging economic conditions.

Record Equity Position

M/I Homes ended the quarter with an all-time record of $3 billion in equity, equating to a book value per share of $112.

Increased Community Count

The company reported a record 226 communities and plans to grow this by an average of 5% in 2025.

Successful Mortgage Operations

Mortgage and title operations achieved pre-tax income of $16.1 million, a 31% increase from the previous year.

Strong Buyer Profile

The credit quality of buyers remains robust with average credit scores of 746 and average down payments of nearly $90,000.

Lowlights

Decreased New Contracts and Deliveries

New contracts were down 10% compared to last year, and home deliveries decreased by 8% to 1,976 homes.

Revenue and Pre-Tax Income Decline

Revenues decreased by 7% to $976 million, and pre-tax income decreased by 19% to $146 million.

Pressure on Gross Margins

Gross margins are expected to be under pressure and below 2024's full year margins of 26.6% due to continued use of mortgage rate buydowns.

Regional Performance Variability

New contracts in the Southern region decreased by 11% compared to last year's first quarter, and deliveries in the Southern region decreased 13%.

Company Guidance

In the first quarter of fiscal year 2025, M/I Homes faced challenging macroeconomic conditions, posting solid results nonetheless. The company reported a 10% decrease in new contracts compared to the previous year, with gross margins at 25.9%, down 120 basis points year-over-year but showing a sequential improvement over the fourth quarter of 2024. Homes delivered decreased by 8% to 1,976 units, and revenues dropped by 7% to $976 million. Pre-tax income fell 19% to $146 million, though the pre-tax income margin remained strong at 15%. The company ended the quarter with a record 226 communities, aiming for a 5% average growth in community count in 2025. M/I Homes' balance sheet was robust, with $3 billion in equity, a debt-to-capital ratio of 19%, and a net debt-to-capital ratio of negative 3%. The company continues to employ mortgage rate buydowns, with 54% of buyers using this incentive, as a strategy to drive traffic and sales amid ongoing market uncertainties.

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.