Megaworld: revenue growth slows to +3%, but EBITDA margin jumps to 46.3%

On May 15, 2026, Megaworld reported results for the first quarter of 2026. Revenue grew 3.0% year-on-year to PHP 20,455.9 million, EBITDA rose 11.6% to PHP 8,870.8 million, and net profit increased 6.1% to PHP 6,184.6 million. The shares trade at a P/E of 3.1 and EV/EBITDA of 4.3, which looks attractive, especially given a dividend yield of 5.2% and the portal's model estimating upside of +34%.

Key takeaways

— Q1 2026 revenue grew only 3.0%, but EBITDA rose 11.6% – margin jumped to 46.3%

— Q1 2026 net profit growth of 6.1% was driven by operating leverage, not one-offs

— Leverage remains moderate: Net Debt/EBITDA LTM – 2.31

— Q1 2026 operating cash flow of PHP 4,259.8 million covers capex and dividends

— Valuation is attractive: P/E 3.1 and EV/EBITDA 4.3 versus historical levels

— The portal's model estimates upside of +34% to fair value

Attractiveness

Key figures, PHP bn

Q1 2026 revenue grew only 3.0%, but EBITDA rose 11.6% – margin jumped to 46.3%

In the first quarter of 2026, Megaworld's revenue reached PHP 20,455.9 million, up only 3.0% year-on-year. The slowdown is visible: in previous quarters growth was higher – for instance, in Q2 2025 it reached 9.5%, and in Q4 2025 revenue even declined 1.2%.

At the same time, EBITDA rose 11.6% to PHP 8,870.8 million, and the EBITDA margin expanded from 42.7% to 46.3%. The main contribution came from the real estate and rental segments: real estate sales brought PHP 13,269.7 million, rentals PHP 5,649.0 million, and hotels PHP 1,537.3 million. The margin expansion likely stems from an improved sales mix and cost control, though specific drivers are not disclosed in the filing.

Q1 2026 net profit growth of 6.1% was driven by operating leverage, not one-offs

Net profit for Q1 2026 rose 6.1% to PHP 6,184.6 million. The filing shows no major one-off gains or charges – growth was driven by operations. Operating profit increased to PHP 7,909.5 million, while interest expenses rose to PHP 1,641.1 million, partially offsetting the operating leverage effect.

The net margin stood at 30.2% versus 29.4% a year earlier. Profitability remains high for a developer, reflecting the efficiency of the township model and the stable contribution of the rental business.

Leverage remains moderate: Net Debt/EBITDA LTM – 2.31

As of end-March 2026, Megaworld's net debt stood at PHP 82,023.5 million, equivalent to 2.31 times EBITDA for the trailing twelve months. Debt rose by PHP 18.6 billion over the quarter but fell by PHP 6.8 billion over the year. A level of 2.31 is comfortable for a developer with a stable rental portfolio.

The debt structure is dominated by interest-bearing loans and borrowings (PHP 78.1 billion) and bonds (PHP 20.7 billion). The company does not disclose the average rate, but with an EBITDA margin of 46.3%, debt service does not appear burdensome.

Q1 2026 operating cash flow of PHP 4,259.8 million covers capex and dividends

Operating cash flow for Q1 2026 was PHP 4,259.8 million, notably above the year-ago level (PHP 3,908.2 million). Capex for the quarter is not disclosed, but in Q4 2025 it was PHP 3,265.0 million – averaging around PHP 1 billion per quarter.

Even with average capex, operating flow comfortably covers investments. The trailing twelve-month dividend yield is 5.2%, and at the current OCF level the company can sustain payouts without increasing debt.

Valuation is attractive: P/E 3.1 and EV/EBITDA 4.3 versus historical levels

Megaworld trades at a P/E LTM of 3.1 and EV/EBITDA LTM of 4.3. These are extremely low multiples for a developer with EBITDA margin above 40% and a net margin of 30%. The market capitalization is PHP 72,642.9 million, barely exceeding annual EBITDA (PHP 35,566.9 million).

The company's own history shows that such valuation levels have historically been entry points: with a stable business and a growing rental component, the re-rating potential is significant. A dividend yield of 5.2% further supports investment appeal.

The portal's model estimates upside of +34% to fair value

According to the portal's model, based on EBITDA growth and a target multiple, Megaworld's fair value is 34% above the current market price. This is the portal's own calculation, not a market consensus or target price.

The shares are included in the PH FVC (quality) strategy on the portal, reflecting the company's fit with quality and fundamental criteria. However, this is not a buy recommendation but merely a statement of inclusion.

Valuation on the latest reported figures

Bottom line

Megaworld reported Q1 2026 with moderate revenue growth but strong EBITDA and net profit dynamics thanks to margin expansion. Leverage remains moderate, and operating cash flow covers investments and dividends. The valuation is extremely low – P/E 3.1 and EV/EBITDA 4.3 – which, combined with a dividend yield of 5.2%, makes the share attractive. The key question is whether the company can sustain margins amid slowing revenue; if so, the re-rating potential is significant. Verdict – attractive.