MHO
M/I Homes, Inc.
$129.82
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Undervalued
Trading 48.9% below fair value
You pay
$129.82
Bear
$194.47
Fair
$254.09
Bull
$313.70
Bear
$194.47
+49.8%
$16.21 × 14x + net cash
Fair
$254.09
+95.7%
$16.21 × 18x + net cash
Bull
$313.70
+141.6%
$16.21 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($16.21)
Implied Market Multiple
8.0x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $165.00 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $254.09 per share.
Warnings
Wall Street's average price target is $165.00 (from 10 analysts). Our estimate is 67% above the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing