M/I Homes, Inc. (MHO): BCG Matrix [11-2024 Updated]
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M/I Homes, Inc. (MHO) Bundle
In the fast-paced world of homebuilding, M/I Homes, Inc. (MHO) stands out with its diverse portfolio, showcasing a mix of Stars, Cash Cows, Dogs, and Question Marks as of 2024. The company has demonstrated impressive revenue growth, with $1.14 billion reported in Q3, and a significant backlog of homes indicating strong future potential. However, challenges remain, particularly in their Dogs segment, where land sale revenue has declined. Dive into this analysis to uncover how M/I Homes navigates its market landscape and what it means for investors moving forward.
Background of M/I Homes, Inc. (MHO)
M/I Homes, Inc. is one of the leading builders of single-family homes in the United States, having sold over 158,200 homes since its inception in 1976. The company primarily markets its homes under the M/I Homes brand and operates in several key markets, including Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Minneapolis/St. Paul, Minnesota; Detroit, Michigan; Ft. Myers/Naples, Tampa, Sarasota, and Orlando, Florida; Austin, Dallas/Fort Worth, Houston, and San Antonio, Texas; Charlotte and Raleigh, North Carolina; and Nashville, Tennessee.
As of September 30, 2024, M/I Homes reported total assets of approximately $4.46 billion, with liabilities totaling $1.61 billion. The company’s equity stood at around $2.85 billion, reflecting a strong balance sheet. M/I Homes operates in two primary segments: homebuilding and financial services. The homebuilding segment generates the majority of revenue, with housing revenue reaching $3.20 billion for the nine months ended September 30, 2024, compared to $2.96 billion for the same period in 2023. This growth is attributed to an increase in new contracts and an improved average sales price of homes.
In addition to homebuilding, M/I Homes provides mortgage and title services through its financial services segment, which contributed $87.7 million in revenue for the first nine months of 2024, an increase from $74.1 million in the same period of 2023. The company has focused on maintaining a healthy backlog, with a record average sales price of homes in backlog at $544,000.
M/I Homes continues to emphasize strategic objectives such as managing land spend, opening new communities, and enhancing customer service and product quality. The company ended the third quarter of 2024 with approximately 52,200 lots under control, representing a six-year supply based on recent home deliveries.
M/I Homes, Inc. (MHO) - BCG Matrix: Stars
Strong revenue growth
Total revenue for M/I Homes in Q3 2024 reached $1.14 billion, marking a 10% increase year-over-year.
Record net income
The company achieved a record net income of $145.4 million for Q3 2024, reflecting a 5% increase compared to the same quarter in 2023.
Increased homes delivered
M/I Homes delivered 2,271 units during Q3 2024, an 8% increase over the previous year.
Significant backlog
The company reported a significant backlog of 3,174 homes, indicating strong future revenue potential.
Financial services segment revenue
Revenue from the financial services segment rose 27% to $30 million in Q3 2024, driven by higher margins and an increase in loans sold.
| Financial Metric | Q3 2024 | Q3 2023 | Year-over-Year Change |
|---|---|---|---|
| Total Revenue | $1.14 billion | $1.04 billion | +10% |
| Net Income | $145.4 million | $139.0 million | +5% |
| Homes Delivered | 2,271 units | 2,096 units | +8% |
| Backlog of Homes | 3,174 homes | 3,433 homes | -7% |
| Financial Services Revenue | $30 million | $23.6 million | +27% |
M/I Homes, Inc. (MHO) - BCG Matrix: Cash Cows
Consistent profitability with net income of $430.3 million for the nine months ended September 30, 2024.
For the nine months ended September 30, 2024, M/I Homes, Inc. reported a net income of $430.3 million, representing a 19% increase from $360.1 million during the same period in 2023.
Solid gross margins at 27.1% for Q3 2024, reflecting efficient cost management.
The company achieved a gross margin of 27.1% in Q3 2024, reflecting a 20 basis point improvement from the previous year. This indicates effective cost management and operational efficiency.
Established market presence in homebuilding with a strong balance sheet and liquidity.
M/I Homes has established a robust market presence in homebuilding, evidenced by a record shareholders’ equity of $2.85 billion as of September 30, 2024. The company maintains a healthy liquidity position, with no borrowings outstanding under its $650 million credit facility, leaving $564.8 million available.
High capture rate of home financing through M/I Financial at 88%.
M/I Financial has achieved a financing capture rate of 88% for homes delivered during the nine months ended September 30, 2024, an increase from 82% in the prior year. This high capture rate underscores the company's effective integration of financial services with home sales.
Shareholders’ equity reached a record high of $2.85 billion.
The company’s shareholders’ equity reached a record high of $2.85 billion as of September 30, 2024. This reflects the strong performance and profitability of M/I Homes, positioning it favorably within the market.
| Financial Metrics | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Income | $145.4 million | $139.0 million | +5% |
| Year-to-Date Net Income | $430.3 million | $360.1 million | +19% |
| Gross Margin | 27.1% | 26.9% | +20 basis points |
| Shareholders’ Equity | $2.85 billion | $2.425 billion | Record High |
| Capture Rate of Home Financing | 88% | 82% | +6% |
M/I Homes, Inc. (MHO) - BCG Matrix: Dogs
Decline in Land Sale Revenue
Land sale revenue decreased significantly to $1.6 million in Q3 2024, down from $14.5 million in Q3 2023. This decline reflects a drop of $12.9 million year-over-year due to fewer land sales compared to prior periods.
Decreased Backlog in the Southern Region
The backlog of homes in the Southern region saw a 17% decrease, dropping from 2,036 homes at September 30, 2023, to 1,681 homes at September 30, 2024. This reduction is attributed to improved construction cycle times, which allowed for faster deliveries.
Monthly Absorption Rate
The monthly absorption rate for homes slightly decreased to 3.2 per community in Q3 2024, compared to 3.4 per community in Q3 2023. This reflects a decline in demand and a slight decrease in new contracts.
Increased Selling, General, and Administrative Expenses
In Q3 2024, selling, general, and administrative expenses increased by 160 basis points to 8.9% of revenue, up from 7.3% in Q3 2023. This increase was primarily due to a $4.5 million rise in general and administrative expenses, mainly related to compensation and land-related costs.
| Metric | Q3 2023 | Q3 2024 | Change |
|---|---|---|---|
| Land Sale Revenue | $14.5 million | $1.6 million | -$12.9 million |
| Backlog of Homes (Southern Region) | 2,036 homes | 1,681 homes | -17% |
| Monthly Absorption Rate | 3.4 per community | 3.2 per community | -5.88% |
| SG&A Expenses (% of Revenue) | 7.3% | 8.9% | +160 basis points |
M/I Homes, Inc. (MHO) - BCG Matrix: Question Marks
New Community Openings
In 2024, M/I Homes opened a total of 57 new communities. This expansion reflects the company's strategy to tap into growing markets, although the success of these openings is subject to market demand fluctuations.
Absorption Rates
The company is currently facing challenges in improving its absorption rates as competition and inventory levels increase. The average absorption pace of sales per community for the third quarter of 2024 was 3.2 homes per month, a slight decline from 3.4 homes per month in the same period of the previous year.
Financial Services Segment
The financial services segment of M/I Homes is experiencing pressure due to changing loan amounts and fluctuating market conditions. In the third quarter of 2024, revenue from financial services reached an all-time quarterly record of $30.0 million, marking a 27% increase from the previous year. However, this segment still faces challenges in maintaining profitability amid changing market dynamics.
Land Acquisitions and Inventory Management
There are potential risks associated with land acquisitions and inventory management strategies. During the nine months ended September 30, 2024, M/I Homes spent $365.6 million on land purchases and $444.7 million on land development. As of September 30, 2024, the company had approximately 28,563 lots under contract with a total purchase price of about $1.39 billion.
Future Revenue Growth
The future revenue growth of M/I Homes is heavily reliant on maintaining high delivery rates and effectively managing operational costs. For the nine months ended September 30, 2024, the company achieved a record total revenue of $3.30 billion, with revenue from homes delivered increasing 8% compared to the same period in 2023. The number of homes delivered during the same period was 6,653 units, representing a 9% increase year-over-year.
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Total Revenue | $1.14 billion | $1.05 billion | $3.30 billion | $3.06 billion |
| Homes Delivered | 2,271 units | 2,110 units | 6,653 units | 6,106 units |
| Financial Services Revenue | $30.0 million | $23.6 million | $87.7 million | $74.1 million |
| Land Purchases | $365.6 million | N/A | $365.6 million | $247.6 million |
| Land Development | $444.7 million | N/A | $444.7 million | $352.6 million |
In summary, M/I Homes, Inc. (MHO) presents a mixed landscape when analyzed through the BCG Matrix framework. The company showcases its Stars with robust revenue growth and a significant backlog, while its Cash Cows highlight consistent profitability and strong market presence. However, challenges persist in the Dogs segment, particularly with declining land sale revenues and increased operational costs. Finally, the Question Marks reflect uncertainties tied to market demand and competitive pressures, indicating that the company's future growth hinges on strategic management of its new communities and operational efficiencies.
Updated on 16 Nov 2024
Resources:
- M/I Homes, Inc. (MHO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of M/I Homes, Inc. (MHO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View M/I Homes, Inc. (MHO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.