NEW YORK ( TheStreet) -- M/I Homes (NYSE: MHO) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins and generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- MHO, with its decline in revenue, underperformed when compared the industry average of 12.0%. Since the same quarter one year prior, revenues slightly dropped by 7.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Household Durables industry and the overall market, M/I HOMES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The share price of M/I HOMES INC has not done very well: it is down 14.51% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The gross profit margin for M/I HOMES INC is currently extremely low, coming in at 6.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -15.40% is significantly below that of the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Household Durables industry. The net income has significantly decreased by 104.4% when compared to the same quarter one year ago, falling from -$8.34 million to -$17.04 million.