Citizens Initiates M/I Homes, Inc. (MHO) With Outperform, Citing Affordability Advantage

Core Insights - M/I Homes, Inc. (NYSE:MHO) is highlighted as a top affordable housing stock with a favorable medium-term outlook despite short-term margin pressures, supported by a $165 price target from Citizens analyst James McCanless [1][3] Group 1: Company Performance - M/I Homes reported record results in its financial services segment for Q4 2025, achieving a capture rate of 93% for the year and 94% in Q4, generating a pretax income of $56 million for the year, including $8.5 million in Q4 [3] - The company ended 2025 with 232 active communities, a 5% increase year-over-year, and opened 81 new communities during the year, with expectations for another 5% increase in community count in 2026 [3] Group 2: Market Positioning - M/I Homes benefits from significant exposure to the Midwest and Plains states, which are more affordable compared to the Southeast, helping to sustain demand in a higher interest rate environment [1][3] - The company's entry-level Smart Series is gaining traction, delivering above-average gross margins while addressing affordability constraints for first-time buyers [1][3] Group 3: Company Background - Founded in 1976 and headquartered in Columbus, Ohio, M/I Homes focuses on designing, constructing, and selling single-family homes and townhomes, with a strong entry-level offering and growing contributions from financial services [4]