NEW YORK (
-- M/I Homes
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally poor debt management, weak operating cash flow and poor profit margins.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 30.4%. Since the same quarter one year prior, revenues rose by 18.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 81.52% and other important driving factors, this stock has surged by 26.12% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- M/I HOMES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, M/I HOMES INC reported poor results of -$1.82 versus -$1.42 in the prior year. This year, the market expects an improvement in earnings ($0.00 versus -$1.82).
- Net operating cash flow has significantly decreased to -$7.68 million or 392.15% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The debt-to-equity ratio of 1.06 is relatively high when compared with the industry average, suggesting a need for better debt level management.
M/I Homes, Inc., together with its subsidiaries, engages in the construction and sale of single-family residential properties. The company offers single-family homes, attached townhomes, and condominiums to first-time, move-up, empty-nester, and luxury buyers under the M/I Homes trade name. M/I Homes has a market cap of $288.8 million and is part of the
industry. Shares are up 59.9% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet Ratings Staff