M/I Homes (NYSE:MHO) Issues Earnings Results

M/I Homes (NYSE:MHO) issued its earnings results on Wednesday. The construction company reported $2.70 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $3.25 by ($0.55), Zacks reports. M/I Homes had a net margin of 6.59% and a return on equity of 10.12%. The company had revenue of $1.08 billion during the quarter, compared to analysts’ expectations of $1.11 billion. During the same period last year, the business posted $3.92 earnings per share. The company’s quarterly revenue was down 1.9% on a year-over-year basis.

Here are the key takeaways from M/I Homes’ conference call:

• Third-quarter profitability declined materially: revenue fell 5% to $1.08 billion, pre-tax income dropped 38% to $87 million, and diluted EPS declined to $2.56 from $3.92 a year earlier. Gross margin excluding inventory charges fell 320 basis points to 21.3%, primarily due to higher mortgage-rate buydown costs and lot costs.
• Demand weakened as the quarter progressed. New contracts were up 15% in July but fell 6% in August and 16% in September, with overall quarterly contracts down 2%; incentives increased as mortgage rates approached 7.75%, while Florida and Texas remained more challenging markets.
• M/I Homes maintained a very strong balance sheet with $620 million in cash, no borrowings under its $900 million revolver, an 18% debt-to-capital ratio, and a 2% net debt-to-capital ratio. Management emphasized that its substantial liquidity and largely on-balance-sheet land position provide flexibility during the downturn.
• The mortgage operation captured a company-record 96% of eligible homebuyer business, up from 93% a year ago, despite mortgage income falling 19%. Buyers remained relatively well qualified, with an average credit score of 748 and average down payments above 16%.
• Management does not plan major strategic changes for 2027, but will be more selective on new land deals, control hiring and expenses, and modestly increase move-up product in several markets. Community count is expected to end 2026 about 5% above last year, while starts have been reduced to avoid building ahead of demand.

M/I Homes Stock Up 8.2%

NYSE:MHO opened at $123.41 on Friday. The business’s fifty day moving average price is $139.27 and its 200 day moving average price is $139.75. The company has a current ratio of 7.09, a quick ratio of 1.69 and a debt-to-equity ratio of 0.29. The firm has a market capitalization of $3.12 billion, a price-to-earnings ratio of 10.39 and a beta of 1.60. M/I Homes has a 1-year low of $113.40 and a 1-year high of $163.66.

Insider Activity

In related news, CFO Phillip Creek sold 10,000 shares of the firm’s stock in a transaction on Wednesday, August 5th. The shares were sold at an average price of $151.28, for a total value of $1,512,800.00. Following the transaction, the chief financial officer directly owned 30,918 shares in the company, valued at approximately $4,677,275.04. This trade represents a 24.44% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available through this link. 3.60% of the stock is currently owned by corporate insiders.

Analysts Set New Price Targets

A number of research firms have recently weighed in on MHO. New Street Research set a $172.00 price target on M/I Homes in a report on Tuesday, August 4th. Citigroup reissued a “market outperform” rating on shares of M/I Homes in a research note on Thursday, October 8th. Zelman & Associates lowered shares of M/I Homes from an “outperform” rating to a “neutral” rating in a research report on Tuesday, July 7th. Weiss Ratings reissued a “hold (c)” rating on shares of M/I Homes in a research note on Wednesday, August 12th. Finally, Zacks Research cut M/I Homes from a “hold” rating to a “strong sell” rating in a report on Wednesday, September 9th. Two analysts have rated the stock with a Strong Buy rating, two have assigned a Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the company’s stock. Based on data from MarketBeat.com, the company presently has an average rating of “Moderate Buy” and a consensus price target of $164.40.

About M/I Homes

M/I Homes, Inc is a residential construction company that builds and sells single-family homes for a range of buyers, including first-time, move-up and luxury-home purchasers. Its operations include land acquisition and development, home design, construction, marketing and sales, with communities offered in suburban and metropolitan markets.

The company also provides services that support the homebuying process, including mortgage financing through M/I Financial and title-related services through its affiliated operations.