Bear of the Day: M/I Homes (MHO)

M/I Homes MHO is a single-family homebuilder that’s suffering alongside the entire housing and homebuilder market as mortgage rates rebound back above 7%.

MHO’s recent downward earnings revisions extend a longer-term trend of negative EPS revisions, earning the homebuilder a Zacks Rank #5 (Strong Sell). Investors with near-term outlooks likely want to stay away from the entire Zacks Home Builders industry, which lands in the bottom 5% of nearly 250 different industries

Why Investors Might Want to Stay Away from MHO Stock Right Now

M/I Homes is a home builder focused on single-family homes, serving a range of buyers from first-time and move-up to luxury and empty nesters. The Columbus, Ohio-based company serves 17 markets across the U.S.

MHO went on a booming run between 2012 and 2022. It has been a rougher go of it for M/I Homes and the entire industry since the post-Covid boom. The wild Covid-driven housing run created a significant pull forward.

On top of that, and more importantly, the ultra-low interest and mortgage rate environment is long gone.

The average 30-year fixed-rate mortgage has ripped back to 7% as long-term U.S. yields rise. On top of higher mortgage rates, the housing market is cooling off because home prices remain out of reach for many throughout critical areas of the country.

MHO’s GAAP earnings fell 25% YoY in 2025 and another 19% in the first six months of 2026. The company’s adjusted earnings outlook slipped 13% for Q3 since its second-quarter report in late July, with its FY26 estimate 5% lower and its 2027 consensus down 15%. This backdrop lands M/I Homes its Zacks Rank #5 (Strong Sell) and prolongs its downward EPS revisions spiral.

The firm’s “homes delivered” decreased 6% in the second quarter, with revenue down 9%. M/I Homes is expected to see its adjusted 2026 earnings fall 19% YoY on 5.4% lower revenue.

Looking ahead, it is expected to return to growth in 2027, to the tune of 8.4% EPS expansion on 4.4% higher revenue. Nonetheless, investors likely want to look beyond M/I Homes and the entire Building Products - Home Builders industry if they are looking for near-term upside. 

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This article originally published on Zacks Investment Research (zacks.com).

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