Megaworld: profit up 20.6% but revenue growth stays modest at 4.8%

In its Q3 2026 report Megaworld posted revenue of PHP 20,906.9m, operating profit of PHP 7,633.9m and net profit of PHP 6,311.8m. Year on year revenue rose 4.8% and net profit 20.6%, while the net margin improved to 30.2% from 26.2%. Our conclusion: rather attractive – on the portal's model the upside to fair value is +29%. Our view: the share is rather attractive at the current price; upside on the portal model +29%.

Our view: is there upside

Our view in numbers

Key takeaways

— Revenue rose 4.8% year on year, an acceleration from 2.2% a quarter earlier

— Net profit grew 20.6% on revenue up 4.8% – the margin rose to 30.2% from 26.2%

— Debt at 2.31x LTM EBITDA is a moderate load, but the facts do not disclose the ratio's direction

— P/E LTM 2.9 and EV/EBITDA LTM 4.36 – low multiples against a margin above 30%

— A 5.1% dividend yield on the last twelve months of payouts is a strong argument for the share

— The portal's model puts the upside to fair value at +29%

Key figures, PHP bn

Revenue rose 4.8% year on year, an acceleration from 2.2% a quarter earlier

In Q3 2026 revenue was PHP 20,906.9m, up 4.8% year on year. A quarter earlier growth was a more modest 2.2%, so the pace accelerated. In absolute terms quarterly revenue has held above PHP 20bn for three quarters in a row.

For a developer this means sales and revenue recognition are running steadily, without dips. The acceleration from 2.2% to 4.8% is small, but it shows demand for the company's housing is not weakening. Over the last twelve months revenue was PHP 83,800.0m.

Net profit grew 20.6% on revenue up 4.8% – the margin rose to 30.2% from 26.2%

Net profit in Q3 2026 was PHP 6,311.8m against PHP 5,232.4m a year earlier – growth of 20.6%. Revenue over the same period rose only 4.8%, so the whole difference came from profitability: the net margin rose to 30.2% from 26.2%.

Operating profit was PHP 7,633.9m. On revenue of PHP 20,906.9m that gives an operating margin of about 36.5% – a level at which the company keeps a substantial cushion. Profit is growing faster than revenue, and that is the main positive of the report.

Over the last twelve months net profit was PHP 25,138.6m. That is the base for the P/E LTM of 2.9 – a very low multiple for a company with a margin above 30%.

Debt at 2.31x LTM EBITDA is a moderate load, but the facts do not disclose the ratio's direction

Net debt at the latest annual balance sheet was PHP 82,023.5m. Against LTM EBITDA of PHP 35,566.5m that gives a ratio of 2.31 – a moderate load for a developer. The facts do not disclose the ratio's direction, so we do not judge its dynamics.

Absolute net debt has been falling: from PHP 100,619.7m at the end of Q4 2024 to PHP 82,023.5m at the latest reporting date. That is a reduction of almost PHP 18.6bn – the company directed part of its funds to debt repayment.

EV/EBITDA LTM is 4.36. With a market cap of PHP 72,967.2m and net debt of PHP 82,023.5m, EV is close to PHP 155bn. Such a multiple looks low for a developer with growing profit.

P/E LTM 2.9 and EV/EBITDA LTM 4.36 – low multiples against a margin above 30%

A P/E LTM of 2.9 means the market values the company's annual profit at less than three times. For a business with a 30.2% net margin and growing profit, that is a very modest valuation. EV/EBITDA LTM of 4.36 is also below typical levels for developers.

Return on equity (ROE) is 7.8%. That is not a high figure, but it reflects a capital structure with large debt rather than weakness in the business. As debt falls, ROE can rise.

The portal's model puts the upside to fair value at +29%. This is our own calculation based on EBITDA growth and a target multiple, not a market consensus.

A 5.1% dividend yield on the last twelve months of payouts is a strong argument for the share

The dividend yield over the last twelve months is 5.1%. That is above the yield on many debt instruments, and with a P/E of 2.9 the payouts are covered by profit with a large cushion.

Our estimate for the current year's dividend assumes the payout ratio and LTM profit of PHP 25,138.6m are maintained. The risk of a lower payout is tied to possible growth in capital expenditure or a slowdown in sales, but the current 30.2% margin gives the company room to manoeuvre.

For an income-oriented investor, a 5.1% dividend with a P/E of 2.9 is a rare combination. Payouts are covered by profit more than three times over, which reduces the risk of a cut.

The portal's model puts the upside to fair value at +29%

On the portal's model the fair value of the share is 29% above the current price. The model takes into account EBITDA growth and a target multiple, not the current market consensus. It is our own valuation tool.

The +29% upside corresponds to a 'rather attractive' rating on our scale. It is supported by low multiples – P/E 2.9 and EV/EBITDA 4.36 – as well as a 5.1% dividend yield.

The share is held in the portal's live model strategies PH FVC (quality). That is a fact, not an argument for the verdict: membership is determined by the strategy's own screen.

Valuation on the latest reported figures

Bottom line

The strong point of the report is net profit growth of 20.6% on revenue up 4.8%: the margin rose to 30.2% from 26.2%, and that is not a one-off but a result of operating efficiency. The weak spots are modest revenue growth and the undisclosed direction of the debt ratio. The key question for a holder is whether the margin above 30% and the 5.1% dividend will hold at the current price. Our conclusion: rather attractive – on the portal's model the upside is +29%. Our view: the share is rather attractive at the current price; upside on the portal model +29%.