Citizens reiterated its Market Outperform rating and maintained a $165.00 price target on M/I Homes (NYSE:MHO) on Friday. The stock was trading at $136.37 with a market capitalization of $3.57 billion at the time of the report, and InvestingPro fair value estimates indicate the shares may be undervalued, with analyst targets spanning $151 to $165.
According to Citizens, M/I Homes saw an uptick in traffic across a number of markets in the first quarter of 2026, and the firm did not observe meaningful differences in buyer activity between its Northern and Southern segments. The company continues to deploy mortgage rate buydowns as its preferred sales incentive. Specifically, 30-year fixed mortgages carrying rates below 5.00% remain popular with buyers, and 7/1 adjustable-rate mortgages are also in demand.
On balance-sheet metrics, M/I Homes reported a current ratio of 9.57, a level Citizens characterized as a strong financial position because it indicates liquid assets substantially exceed short-term liabilities. InvestingPro rates the company’s financial health as "GOOD." The company has also been active in repurchasing its shares, a move InvestingPro data describes as aggressive and that management appears to view as a vote of confidence in the business strategy. The shares trade at a modest price-to-earnings multiple of 8.98, according to the same data.
Regionally, Citizens noted some divergence in late-2025 performance. Florida markets improved in the fourth quarter of 2025, with Orlando and Sarasota showing slightly better results than Tampa. By contrast, Austin and San Antonio remained under pressure and were cited as the primary drivers of fourth-quarter impairment charges.
M/I Homes said it does not plan to alter its spec home strategy, indicating management believes buyers value the flexibility that these inventory homes provide. At the same time, the company’s most recent quarterly results have drawn attention: for the fourth quarter of 2025 M/I Homes reported earnings per share of $3.91, below the $4.11 analysts had expected, and revenue of $1.15 billion versus a forecast of $1.16 billion. Those shortfalls have raised concerns among some investors about near-term financial performance.
Citizens’ reiteration comes amid no announced mergers or acquisitions for M/I Homes and no recent analyst upgrades or downgrades, according to the information provided. The firm’s reaffirmed rating and target reflect its read on traffic, incentives, liquidity and regional performance, while the Q4 earnings and revenue misses remain a focal point for market participants.
Key takeaways
- MHO reaffirmed a Market Outperform rating with a $165.00 price target; current trading at $136.37 and market cap $3.57 billion.
- Traffic increased across multiple markets in Q1 2026; no major North-South segment differences reported.
- Financial position appears strong with a current ratio of 9.57; management has been repurchasing shares despite modest P/E of 8.98.
Risks and uncertainties
- Quarterly performance risk: Fourth-quarter 2025 EPS of $3.91 and revenue of $1.15 billion missed expectations, potentially affecting investor sentiment - impacting the homebuilding and construction sectors.
- Regional exposure risk: Continued weakness in Austin and San Antonio contributed to impairment charges, underscoring geographic sensitivity in operations and local housing markets.
- Market incentive reliance: Heavy use of mortgage rate buydowns and reliance on specific mortgage products (sub-5.00% 30-year fixed and 7/1 ARMs) may affect margin dynamics and demand if financing conditions change.