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M/I Homes, Inc. (MHO) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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M/I Homes, Inc. (MHO)

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Intrinsic Value (DCF)

Current$139.00
→
Intrinsic$214.18
+54%
$146.61$214.18$342.36
Market implies 14% growth for 5 years
DCF analysis suggests MHO could have 54% upside at 25% growth — verify assumptions match your view.
At $139, the market prices in 14% annual cash flow growth — a moderate expectation aligned with historical trends (25%).
Range: Bear $147 → Bull $342. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$263$284$306$330
10%$185$199$214$230
12%$141$152$163$175
14%$114$122$131$141

Bull Case

  • Bull case ($342) offers 146% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (14%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($147) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$214.15M
Year 2$267.69M
Year 3$334.61M
Year 4$418.26M
Year 5$522.82M
Terminal$7.69B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$171.32MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is MHO stock undervalued or overvalued?
🟢 UNDERVALUED

MHO trades at $139.00 vs. our DCF-derived intrinsic value of $177.85, implying +38% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of MHO's future cash flows. The bear case ($117.50) still suggests upside, providing margin of safety.

What is MHO's intrinsic value?

Using a 5-year DCF model: Base FCF of $171M, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-71M net debt and dividing by 0.03B shares: Bear $117.50 | Base $177.85 | Bull $266.71. Current price $139.00 implies +38% to base case.

How is MHO's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($5.02B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.