Earnings Beat: M/I Homes, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

A week ago, M/I Homes, Inc. (NYSE:MHO) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 4.1% to hit US$1.0b. M/I Homes also reported a statutory profit of US$4.78, which was an impressive 21% above what the analyst had forecast. The analyst typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analyst is expecting for next year.

See our latest analysis for M/I Homes

After the latest results, the single analyst covering M/I Homes are now predicting revenues of US$4.25b in 2024. If met, this would reflect a reasonable 4.2% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be US$18.18, roughly flat on the last 12 months. In the lead-up to this report, the analyst had been modelling revenues of US$4.14b and earnings per share (EPS) of US$16.35 in 2024. There's been a pretty noticeable increase in sentiment, with the analyst upgrading revenues and making a nice gain to earnings per share in particular.

With these upgrades, we're not surprised to see that the analyst has lifted their price target 12% to US$130per share.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that M/I Homes' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.6% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. Compare this to the 91 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.1% per year. So it's pretty clear that, while M/I Homes' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around M/I Homes' earnings potential next year. They also upgraded their revenue forecasts, although the latest estimates suggest that M/I Homes will grow in line with the overall industry. There was also a nice increase in the price target, with the analyst clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on M/I Homes. Long-term earnings power is much more important than next year's profits. We have analyst estimates for M/I Homes going out as far as 2025, and you can see them free on our platform here.

Even so, be aware that M/I Homes is showing 1 warning sign in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.