M/I Homes (NYSE:MHO – Get Free Report) issued its quarterly 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. The firm had revenue of $1.08 billion during the quarter, compared to analyst estimates of $1.11 billion. M/I Homes had a return on equity of 11.53% and a net margin of 7.44%. The firm’s revenue for the quarter was down 1.9% on a year-over-year basis. During the same quarter last year, the firm posted $3.92 EPS.
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 Price Performance
MHO opened at $114.23 on Thursday. The stock’s 50 day moving average price is $139.89 and its 200-day moving average price is $139.74. The stock has a market capitalization of $2.89 billion, a PE ratio of 9.62 and a beta of 1.60. The company has a debt-to-equity ratio of 0.29, a quick ratio of 1.69 and a current ratio of 7.65. M/I Homes has a 52-week low of $113.64 and a 52-week high of $163.66.
More M/I Homes News
Here are the key news stories impacting M/I Homes this week:
- Positive Sentiment: M/I Homes maintained a solid balance sheet, ending the quarter with $620.6 million in cash, $3.3 billion in shareholders’ equity and an 18% homebuilding debt-to-capital ratio. The company also repurchased $50 million of stock. M/I Homes Reports 2026 Third Quarter Results
- Positive Sentiment: Book value per share reached a record $130, while a valuation analysis estimated GF Value at $135.90, suggesting potential long-term upside if operating conditions improve. M/I Homes Valuation Analysis
- Neutral Sentiment: Institutional activity was mixed: 175 investors increased positions in the latest quarter, while 144 reduced them. This indicates continued interest but no clear consensus among large shareholders.
- Negative Sentiment: Third-quarter adjusted EPS was $2.70, missing consensus estimates by approximately $0.60, while revenue of $1.076 billion fell short by about $30 million. GAAP EPS was $2.56, down from $3.92 a year earlier. M/I Homes Q3 Earnings
- Negative Sentiment: Revenue declined 5% year over year, deliveries and new contracts each fell 2%, and backlog sales value decreased 9% to $1.1 billion. Pre-tax income dropped 38% to $86.9 million.
- Negative Sentiment: Mortgage-rate buydowns and $4.7 million of inventory charges pressured profitability. Gross margin was 20.9%, or 21.3% excluding charges, and the CEO described the housing market as “increasingly difficult.” M/I Homes CEO Housing Market Comments
Wall Street Analyst Weigh In
MHO has been the topic of a number of analyst reports. Weiss Ratings restated a “hold (c)” rating on shares of M/I Homes in a report on Wednesday, August 12th. Freedom Capital raised shares of M/I Homes to a “strong-buy” rating in a report on Wednesday, June 24th. Jefferies Financial Group set a $165.00 price objective on M/I Homes in a research note on Thursday, October 8th. Citigroup restated a “market outperform” rating on shares of M/I Homes in a research note on Thursday, October 8th. Finally, Zacks Research lowered M/I Homes from a “hold” rating to a “strong sell” rating in a report on Wednesday, September 9th. Two equities research analysts have rated the stock with a Strong Buy rating, two have given a Buy rating, two have given a Hold rating and one has issued a Sell rating to the company’s stock. According to data from MarketBeat.com, M/I Homes presently has an average rating of “Moderate Buy” and an average price target of $164.40.
Check Out Our Latest Research Report on MHO
Insider Buying and Selling at M/I Homes
In related news, CFO Phillip Creek sold 10,000 shares of the company’s stock in a transaction that occurred on Wednesday, August 5th. The stock was sold at an average price of $151.28, for a total value of $1,512,800.00. Following the sale, the chief financial officer owned 30,918 shares in the company, valued at $4,677,275.04. This represents a 24.44% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at this hyperlink. 3.60% of the stock is owned by corporate insiders.
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.
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