Legacy Housing (LEGH) AI Stock Analysis

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Legacy Housing

(NASDAQ:LEGH)

Rating:63Neutral

Price Target:

$25.00

▲(14.00%Upside)

Legacy Housing's strengths include a robust balance sheet and strong loan origination growth. However, challenges such as declining sales and profitability margins, combined with bearish technical indicators, weigh on the stock's attractiveness. The valuation is reasonable, but the lack of dividends could be a deterrent for some investors.

Legacy Housing (LEGH) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$528.91M

Dividend YieldN/A

Average Volume (3M)66.84K

Price to Earnings (P/E)9.5

Beta (1Y)0.78

Revenue Growth-1.62%

EPS Growth7.51%

CountryUS

Employees594

SectorConsumer Cyclical

Sector Strength77

IndustryResidential Construction

Share Statistics

EPS (TTM)0.43

Shares Outstanding24,117,895

10 Day Avg. Volume68,256

30 Day Avg. Volume66,841

Financial Highlights & Ratios

PEG Ratio0.70

Price to Book (P/B)1.22

Price to Sales (P/S)0.00

P/FCF Ratio22.39

Enterprise Value/Market Cap1.13

Enterprise Value/Revenue0.86

Enterprise Value/Gross Profit6.89

Enterprise Value/Ebitda2.14

Forecast

1Y Price Target

$28.50

Price Target Upside29.96% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Legacy Housing Business Overview & Revenue Model

Company DescriptionLegacy Housing Corporation (LEGH) is a prominent manufacturer of manufactured homes and tiny houses in the United States. With a focus on affordability and quality, the company operates within the residential construction sector, catering primarily to customers seeking cost-effective housing solutions. Legacy Housing offers a diverse range of floor plans and customizable options, ensuring that their products meet various customer preferences and needs.

How the Company Makes MoneyLegacy Housing makes money primarily through the design, production, and sale of manufactured homes and tiny houses. Their revenue model includes direct sales to consumers, as well as wholesale transactions with independent retailers. Additionally, the company generates income by providing financing options to customers purchasing their homes, which can include both retail and wholesale financing solutions. Legacy Housing's earnings are further supported by their strategic partnerships with a network of independent dealers and distributors, expanding their market reach and customer base.

Legacy Housing Earnings Call Summary

Earnings Call Date:May 12, 2025

(Q1-2025)

% Change Since: -14.77%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Neutral

The earnings call reflected a mixed performance for Legacy Housing Corporation. While there were notable achievements such as increased net revenue per product sold, growth in loan portfolios, and strong retail loan originations, the company faced challenges with a significant decrease in product sales, net income, and gross profit margin. Increased SG&A expenses and decreased other revenue further contributed to a challenging quarter. Despite these setbacks, the company remains optimistic about future growth, particularly in retail finance and loan originations.

Q1-2025 Updates

Positive Updates

Increase in Net Revenue Per Product Sold

Net revenue per product sold increased by 23.1% compared to the same period in 2024, largely due to a shift from wholesale to higher retail prices.

Increase in Consumer and MHP Loan Portfolios

The consumer loan portfolio increased by $20.3 million and the MHP loan portfolio increased by $20.1 million compared to the previous year.

Strong Retail Loan Originations

Retail loan originations in April 2025 were the highest since going public, with year-to-date originations up 51% over last year.

Increase in Cash Reserves

Cash reserves increased to $3.4 million as of March 31, 2025, up from $1.1 million as of December 31, 2024.

Growth in Book Value Per Share

Book value per basic share outstanding increased by 13.1% from the same period in 2024.

Negative Updates

Decrease in Product Sales

Product sales decreased by $6.5 million or 21.2% compared to the same period in 2024, driven by a decrease in unit volume shipped.

Significant Decrease in Net Income

Net income decreased by 32.1% to $10.3 million in the first quarter of 2025 compared to the first quarter of 2024.

Decline in Gross Profit Margin

Gross profit margin decreased to 29.2% from 33.6% during the same period in 2024.

Increase in SG&A Expenses

Selling, general and administrative expenses increased by $0.4 million or 6.9% during the three months ended March 31, 2025, compared to the same period in 2024.

Decrease in Other Revenue

Other revenue decreased by $1.0 million or 59.2%, mainly due to a $1.1 million decrease in forfeited deposits.

Company Guidance

During the Legacy Housing Corporation Q1 2025 earnings call, several key financial metrics and strategic updates were discussed. The company reported a 21.2% decrease in product sales, amounting to a $6.5 million drop compared to the same period in 2024, primarily due to reduced unit volume in mobile home park and retail sales. Despite this, net revenue per product increased by 23.1% due to a higher mix of consumer sales. The consumer loan portfolio grew by $20.3 million, while the dealer finance notes decreased by $2.4 million. Legacy's gross profit margin fell to 29.2% from 33.6% year-over-year, and net income decreased by 32.1% to $10.3 million. Basic earnings per share also saw a decline of 30.6% to $0.43. However, the company reported an increase in cash reserves to $3.4 million as of March 31, 2025, and a 13.1% increase in book value per basic share outstanding to $20.87. Looking forward, the company plans to simplify its product line to improve efficiency and has made strategic hires to bolster its sales and marketing efforts. Despite market uncertainties, the outlook for the rest of 2025 remains positive, with retail loan originations in April reaching record levels since going public and May tracking equally strong.

Legacy Housing Financial Statement Overview

Summary

Legacy Housing shows strong profitability with a robust balance sheet characterized by low leverage and impressive return on equity. However, cash flow volatility and recent revenue growth challenges temper this strength.

Income Statement

Positive

Legacy Housing demonstrates strong profitability with a consistent gross profit margin and net profit margin over the years. However, the revenue growth rate shows volatility, with a decline in recent years. The EBIT and EBITDA margins are healthy, reflecting efficient operations.

Balance Sheet

Very Positive

The company's balance sheet is robust, with a low debt-to-equity ratio indicating minimal leverage. Return on equity is impressive, showing effective use of shareholder funds. The equity ratio is high, highlighting a solid financial position with substantial equity backing the assets.

Cash Flow

Positive

Cash flow from operations has been inconsistent, with negative values in some years. However, the recent turnaround to positive free cash flow is promising. The operating cash flow to net income ratio is improving, but historical fluctuations warrant caution.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
184.19M	189.14M	257.01M	197.51M	176.72M
	Gross Profit
94.12M	89.45M	106.90M	83.46M	67.00M
	EBIT
63.61M	64.59M	78.02M	58.92M	47.60M
	EBITDA
78.63M	71.39M	84.30M	63.10M	51.09M
	Net Income Common Stockholders
61.64M	54.46M	67.77M	49.87M	37.99M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.15M	748.00K	11.23M	1.04M	768.00K
	Total Assets
534.19M	506.74M	436.81M	366.67M	338.62M
	Total Debt
1.40M	25.57M	5.32M	7.99M	36.17M
	Net Debt
247.00K	24.82M	2.50M	6.95M	35.41M
	Total Liabilities
40.24M	70.01M	54.71M	57.27M	79.42M
	Stockholders Equity
493.96M	436.74M	382.10M	309.39M	259.19M
Cash Flow		Free Cash Flow
26.78M	-21.25M	-5.49M	54.34M	-4.88M
	Operating Cash Flow
35.99M	-13.54M	-1.69M	60.30M	-2.04M
	Investing Cash Flow
-6.71M	-9.77M	9.08M	-31.94M	-2.72M
	Financing Cash Flow
-28.88M	21.23M	-5.61M	-28.08M	3.60M

Legacy Housing Technical Analysis

Technical Analysis Sentiment

Negative

Last Price21.93

Price Trends

50DMA

24.24

Negative

100DMA

24.83

Negative

200DMA

25.50

Negative

Market Momentum

MACD

-0.64

Positive

RSI

35.51

Neutral

STOCH

16.50

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LEGH, the sentiment is Negative. The current price of 21.93 is below the 20-day moving average (MA) of 23.67, below the 50-day MA of 24.24, and below the 200-day MA of 25.50, indicating a bearish trend. The MACD of -0.64 indicates Positive momentum. The RSI at 35.51 is Neutral, neither overbought nor oversold. The STOCH value of 16.50 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LEGH.

Legacy Housing Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UHG	74 Outperform	$176.98M	4.53	97.48%	―	5.24%	-89.62%
HOV	69 Neutral	$511.94M	3.11	28.55%	―	7.93%	-3.59%
BZH	66 Neutral	$626.98M	6.68	7.97%	―	13.50%	-40.36%
CCS	65 Neutral	$1.58B	5.37	12.36%	2.12%	10.75%	8.31%
LEGH	63 Neutral	$528.91M	9.51	11.90%	―	-1.62%	7.51%
Sector *	62 Neutral	$6.90B	11.12	2.92%	3.89%	2.68%	-25.06%
LGIH	58 Neutral	$1.17B	6.46	9.36%	―	-4.37%	-3.17%

* Consumer Cyclical Sector Average

Performance Comparison

LEGH

Legacy Housing

21.93

-1.37

-5.88%

BZH

Beazer Homes

20.69

-7.87

-27.56%

HOV

Hovnanian Enterprises

87.96

-61.04

-40.97%

LGIH

LGI Homes

48.55

-47.39

-49.40%

CCS

Century Communities

51.04

-30.02

-37.03%

UHG

United Homes Group

3.63

-1.99

-35.41%

Legacy Housing Corporate Events

Executive/Board Changes

Legacy Housing Appoints Skyler Howton to Board

Neutral

Nov 18, 2024

Skyler M. Howton has been appointed to the Company’s Board of Directors, filling a vacancy left by Francisco J. Coll. With a robust legal background and leadership roles in Dallas, she will serve on key committees and stand for election at the 2024 Annual Shareholders’ Meeting. Howton’s appointment aligns with SEC and NASDAQ independence standards, and she will receive compensation similar to other non-employee directors.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.