Core Insights - M/I Homes, Inc. (MHO) reported a disappointing Q1 performance, with declines in both revenue and net income, indicating a loss in profitability and efficiency [1] Financial Performance - The company experienced declines in top and bottom lines during Q1, reflecting challenges in maintaining profitability [1] Investment Perspective - The analysis suggests a long-term investment horizon of 5-10 years, emphasizing a portfolio strategy that includes a mix of growth, value, and dividend-paying stocks, with a focus on value [1]

Financial Data and Key Metrics Changes - In the first quarter, new contracts decreased by 10% compared to last year, with a cancellation rate of 10% [10][18] - Revenues decreased by 7% to $976 million, while homes delivered decreased by 8% to 1,976 homes [11][21] - Gross margins were reported at 25.9%, down 120 basis points year-over-year but up 130 basis points from the previous quarter [10][21] - Pre-tax income decreased by 19% to $146 million, with a pre-tax income margin of 15% and a return on equity of 19% [12][23] - Earnings per diluted share decreased to $3.98 from $4.78 last year [24] Business Line Data and Key Metrics Changes - The mortgage and title operations achieved pre-tax income of $16.1 million, an increase of 31% from the previous year, with revenue increasing by 17% to a record $31.5 million [25] - The average mortgage amount increased to $406,000, while loans originated decreased by 2% to 1,530 [26] Market Data and Key Metrics Changes - New contracts in the Northern region decreased by 8%, while the Southern region saw a decrease of 11% compared to last year's first quarter [12] - Deliveries in the Southern region decreased by 13%, while the Northern region saw a decrease of 2% [13] Company Strategy and Development Direction - The company plans to continue offering mortgage rate buydown incentives to drive sales, indicating that gross margins may face pressure throughout the year [16] - The company remains optimistic about long-term growth in the homebuilding industry due to an undersupply of homes and increasing household formations [16] Management's Comments on Operating Environment and Future Outlook - Management noted that the macroeconomic environment remains challenging, with factors such as inflation, interest rate fluctuations, and consumer confidence impacting demand [9][10] - Despite the challenges, management expressed confidence in the company's strong balance sheet and land position, indicating readiness for future growth [15][94] Other Important Information - The company ended the quarter with a record $3 billion in equity and a debt-to-capital ratio of 19% [15] - The company has repurchased 13% of its outstanding shares since 2022, with $200 million remaining under the current board authorization [31] Q&A Session Summary Question: Insights on buyer demand shifts by geography and price point - Management noted no significant changes in demand across price points, with Smart Series communities performing well [38] - Tampa market showed some recovery, while Indianapolis and Chicago remained strong [41][42] Question: Spec strategy and margin differentials - Management indicated that spec sales account for 50% to 65% of sales, with slightly lower margins on spec products [52][53] Question: Order pace and units under construction - Management is cautious about starts and is managing construction on a subdivision basis, with a focus on maintaining good margins [64][66] Question: Impact of lot cost inflation and supply chain - Currently, there has been no significant impact from lot cost inflation, and costs are stable compared to last year [85][88] Question: Share repurchase strategy - Management is consistent with a $50 million repurchase strategy and is open to adjusting based on market conditions [99][100] Question: Gross margin backlog and pricing power - Management expects continued pressure on margins and noted that true pricing power is limited in the current environment [107][127]

Financial Data and Key Metrics Changes - New contracts decreased by 10% compared to last year, with a sequential decline of 20% in January, 10% in February, and 2% in March [12] - Revenues decreased by 7% to $976 million, while pre-tax income decreased by 19% to $146 million, resulting in a pre-tax income margin of 15% [8][16] - Gross margins were reported at 25.9%, down 120 basis points year-over-year but up 130 basis points from the previous quarter [14] - Earnings per diluted share decreased to $3.98 from $4.78 last year [16] Business Line Data and Key Metrics Changes - The mortgage and title operations achieved pre-tax income of $16.1 million, an increase of 31% from the previous year, with revenue rising 17% to a record $31.5 million [17] - 54% of buyers utilized rate buy downs, up from just under 50% in the previous quarter [8] - Average loan amounts increased to $406,000, while loans originated decreased by 2% to $15.3 million [18] Market Data and Key Metrics Changes - New contracts in the Northern Region decreased by 8%, while the Southern Region saw an 11% decrease [9] - Deliveries in the Southern Region decreased by 13%, while Northern Region deliveries decreased by 2% [9] - The company ended the quarter with 226 communities, an increase from 219 a year ago, and plans to grow community count by an average of 5% in 2025 [12][10] Company Strategy and Development Direction - The company plans to continue offering rate buy down incentives to stimulate demand, despite expected pressure on gross margins throughout the year [11] - The management remains optimistic about long-term growth in the homebuilding industry due to an undersupply of homes and increasing household formations [11] - The company is focused on maintaining a strong balance sheet, with zero borrowings under its credit facility and a debt to capital ratio of 19% [10] Management's Comments on Operating Environment and Future Outlook - The management noted that the spring selling season has been "just okay," with a grading of B- to C+ due to ongoing economic uncertainties [5] - Despite challenges, the company believes it is well-positioned for a solid year in 2025, with expectations of continued demand in its markets [11] - The management highlighted the importance of mortgage rate buy downs as an effective tool to drive traffic and sales in the current environment [53] Other Important Information - The company has a strong land position, owning approximately 25,000 lots and controlling an additional 26,000 lots via option contracts, equating to about a five-year supply [10] - The company repurchased $50 million of its stock during the quarter, with $200 million remaining under its current Board authorization [21] Q&A Session Summary Question: Insights on buyer demand shifts geographically and by price point - Management noted no significant changes in demand by price point, with 54% of sales from the Smart Series product line catering to first-time buyers [25] - Geographically, Tampa struggled more than other Florida markets but has shown signs of recovery recently, while markets like Indianapolis and Chicago performed strongly [28][29] Question: Spec strategy and margin differentials - The company has increased its spec sales to 50-65% of total sales, with spec margins generally lower by 150 to 200 basis points compared to built-to-order homes [36][37] Question: Order pace and units under construction - Management is cautious about increasing units under construction, balancing good margins with market pace [49] Question: Impact of lot cost inflation and supply chain - Currently, there has been no significant impact from lot cost inflation or tariffs, with costs remaining stable or slightly lower [65][66] Question: Stock repurchase strategy - The company maintains a consistent repurchase strategy and is open to adjusting the pace based on market conditions [76][78] Question: Gross margin backlog and pricing power - The gross margin backlog is expected to remain flat, with limited pricing power observed in less than 10% of communities [84][100]

Core Insights - M/I Homes reported a revenue of $976.09 million for the quarter ended March 2025, reflecting a year-over-year decline of 6.8% and an EPS of $3.98, down from $4.78 a year ago, with a revenue surprise of -12.92% compared to the Zacks Consensus Estimate of $1.12 billion and an EPS surprise of -4.33% against the consensus estimate of $4.16 [1] Financial Performance - Homes in backlog totaled 2,847, slightly below the average estimate of 2,910 from two analysts [4] - The number of active communities was 223, compared to the average estimate of 224 [4] - New contracts totaled 2,292, which was lower than the average estimate of 2,599 [4] - The average sales price of homes in backlog was $548 thousand, slightly above the average estimate of $547.03 thousand [4] - The average home closing price was $476 thousand, below the average estimate of $489.71 thousand [4] - The aggregate sales value of homes in backlog was $1.56 billion, compared to the estimated $1.59 billion [4] - Homes delivered totaled 1,976, which was lower than the average estimate of 2,221 [4] - Financial services revenue was $31.52 million, slightly above the average estimate of $31.40 million, representing a year-over-year increase of 16.9% [4] - Homebuilding revenue was $940.03 million, below the average estimate of $1.09 billion, reflecting a year-over-year decline of 7.5% [4] Market Performance - Shares of M/I Homes have returned -7.4% over the past month, compared to the Zacks S&P 500 composite's -6.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

M/I Homes (MHO) came out with quarterly earnings of $3.98 per share, missing the Zacks Consensus Estimate of $4.16 per share. This compares to earnings of $4.78 per share a year ago. These figures are adjusted for non- recurring items. This quarterly report represents an earnings surprise of -4.33%. A quarter ago, it was expected that this homebuilder would post earnings of $4.83 per share when it actually produced earnings of $4.71, delivering a surprise of -2.48%. Over the last four quarters, the company ...

Financial Performance - The Company reported pre-tax income of $146.1 million, a 19% decrease from $180.2 million in Q1 2024, and net income of $111.2 million ($3.98 per diluted share), down from $138.1 million ($4.78 per diluted share) in the same period last year [4][8]. - The Company achieved a gross margin of 25.9% and a pre-tax profit margin of 15% [6][8]. - Shareholders' equity reached a record $3 billion, a 14% increase from the previous year, with a book value of $112 per share [7][8]. - Financial services pre-tax income increased to $16.1 million from $12.3 million in Q1 2024 [19][20]. - The Company repurchased $50 million of common stock during the quarter [8]. Sales and Deliveries - Homes delivered decreased by 8% to 1,976 homes compared to 2,158 homes in Q1 2024, while new contracts fell by 10% to 2,292 from 2,547 [5][8]. - Total new contracts decreased by 10% from 2,547 in Q1 2024 to 2,292 in Q1 2025 [23]. - Homes delivered fell by 8% from 2,158 in Q1 2024 to 1,976 in Q1 2025 [23]. - The cancellation rate increased to 10% in Q1 2025 from 8% in Q1 2024 [5][8]. Backlog and Sales Value - The backlog sales value at March 31, 2025, was $1.56 billion, a 13% decrease from $1.79 billion a year ago, with backlog units down 16% to 2,847 homes [5][8]. - The backlog increased to 2,847 units valued at $1,559 million, with an average sales price of $548,000, compared to 3,391 units valued at $1,789 million and an average sales price of $528,000 in Q1 2024 [23]. Regional Performance - Northern region's new contracts decreased by 8% from 1,162 in Q1 2024 to 1,065 in Q1 2025 [23]. - Southern region's homes delivered dropped by 13% from 1,315 in Q1 2024 to 1,150 in Q1 2025 [23]. - Northern region's average sales price for backlog increased from $525,000 in Q1 2024 to $556,000 in Q1 2025 [23]. - Southern region's average sales price for backlog increased from $530,000 in Q1 2024 to $540,000 in Q1 2025 [23]. Land Position - Total land position increased from 47,457 lots in Q1 2024 to 51,097 lots in Q1 2025 [23]. - Total lots owned increased from 23,826 in Q1 2024 to 25,210 in Q1 2025 [23]. - Total lots under contract rose from 23,631 in Q1 2024 to 25,887 in Q1 2025 [23]. Community Growth - M/I Homes plans to grow its community count by an average of 5% this year, with 226 active communities as of March 31, 2025 [7][8].

Core Insights - The company reported a decrease in pre-tax income and net income for the first quarter of 2025 compared to the same period in 2024, with pre-tax income at $146.1 million and net income at $111.2 million, translating to $3.98 per diluted share [2][4][8]. Financial Performance - Homes delivered decreased by 8% to 1,976 homes from 2,158 homes in the first quarter of 2024 [3][8]. - Revenue fell by 7% to $976 million [8]. - The gross margin was reported at 25.9%, with a pre-tax profit margin of 15% and a return on equity of 19% [4][8]. - The cancellation rate increased to 10% in the first quarter of 2025 from 8% in the same quarter of 2024 [3][8]. Contracts and Backlog - New contracts totaled 2,292, down 10% from 2,547 in the first quarter of 2024 [3][8]. - The backlog at March 31, 2025, had a total sales value of $1.56 billion, a 13% decrease from the previous year, with backlog units down 16% to 2,847 homes [3][8]. Balance Sheet and Cash Position - The company achieved a record net worth of $3 billion, a 14% increase from a year ago, with a book value of $112 per share [5][8]. - The company ended the quarter with $776 million in cash and no borrowings under its $650 million unsecured borrowing line [5][8]. - Homebuilding debt-to-capital ratio stood at 19%, with a net debt-to-capital ratio of negative 3% [5][8]. Operational Highlights - The company operated 226 communities as of March 31, 2025, compared to 219 communities a year earlier, and plans to grow community count by an average of 5% this year [5][8]. - The average sales price of homes in backlog was $548,000, up from $528,000 a year ago [3][8].

Core Viewpoint - Analysts forecast a quarterly earnings per share (EPS) of $4.16 for M/I Homes, indicating a year-over-year decline of 13%, while revenues are expected to reach $1.12 billion, reflecting a 7.1% increase compared to the previous year [1] Earnings Estimates - Changes in earnings estimates are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate revisions and short-term stock performance [2] Key Metrics Forecast - Analysts predict 'Revenue - Financial services revenue' to be $31.40 million, a year-over-year increase of 16.5% [4] - The forecast for 'Revenue - Homebuilding revenue - Housing revenue' is $1.09 billion, indicating a 7% year-over-year change [4] - The 'Average home closing price' is expected to reach $489.71 thousand, up from $471 thousand in the same quarter last year [4] Homes Delivered and Contracts - The estimated 'Homes delivered - Total' is 2,221, compared to 2,158 in the same quarter last year [5] - Analysts expect 'New contracts - Total' to be 2,599, an increase from 2,547 year-over-year [5] Backlog and Active Communities - The 'Average sales price of homes in backlog - Total Homebuilding Regions' is projected at $547.03 thousand, up from $528 thousand in the same quarter last year [6] - The consensus for 'Number of active communities (Average community count)' is 224, compared to 216 in the previous year [6] Aggregate Sales and Backlog - The consensus estimate for 'Aggregate sales value of homes in backlog - Total Homebuilding Regions' is $1.59 billion, down from $1.79 billion in the same quarter last year [7] - Analysts suggest 'Homes in backlog' will likely reach 2,910, compared to 3,391 year-over-year [7] Stock Performance - Over the past month, M/I Homes shares have declined by 11.1%, while the Zacks S&P 500 composite has decreased by 6.3% [7]

Company Overview - M/I Homes (MHO) closed at $106.52, with a slight increase of +0.23% from the previous day, underperforming the S&P 500 which gained 1.81% [1] - Over the past month, M/I Homes shares have decreased by 7.45%, slightly outperforming the Construction sector's decline of 7.59% but lagging behind the S&P 500's loss of 6.14% [1] Upcoming Financial Results - M/I Homes is set to announce its earnings on April 23, 2025, with projected earnings of $4.16 per share, indicating a year-over-year decline of 12.97% [2] - The Zacks Consensus Estimate for revenue is $1.12 billion, reflecting a year-over-year increase of 7.09% [2] Fiscal Year Projections - For the entire fiscal year, earnings are projected at $18.44 per share, representing a decline of 6.44%, while revenue is expected to be $4.78 billion, an increase of 6.04% from the prior year [3] Analyst Estimates and Stock Performance - Recent changes in analyst estimates for M/I Homes are crucial for investors, as they indicate shifts in near-term business trends, with positive changes suggesting analyst optimism [3] - The Zacks Rank system, which incorporates estimate changes, currently ranks M/I Homes at 3 (Hold), with the consensus EPS projection remaining unchanged over the past 30 days [5] Valuation Metrics - M/I Homes is trading at a Forward P/E ratio of 5.76, which is below the industry average Forward P/E of 7 [6] - The Building Products - Home Builders industry, part of the Construction sector, holds a Zacks Industry Rank of 213, placing it in the bottom 15% of over 250 industries [6]

Core Points - Friedrich K.M. Böhm, an independent member of M/I Homes' Board of Directors since 1994, will retire upon the expiration of his term and will not seek re-election at the 2025 Annual Meeting of Shareholders [1][2] - Mr. Böhm has served over 30 years on the Board, including roles as Lead Director and Chair of the Audit and Compensation Committees, contributing significantly to the company's success [2] Company Overview - M/I Homes, Inc. is recognized as one of the leading homebuilders in the United States, specializing in single-family homes [2] - The company operates in multiple regions, including Columbus and Cincinnati in Ohio, Indianapolis in Indiana, Chicago in Illinois, Minneapolis/St. Paul in Minnesota, Detroit in Michigan, various cities in Florida, Texas, North Carolina, and Nashville in Tennessee [2]