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Legacy Housing Corp (LEGH)
NASDAQ:LEGH

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)

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
75
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
85
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
70
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.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
184.19M189.14M257.01M197.51M176.72M
Gross Profit
94.12M89.45M106.90M83.46M67.00M
EBIT
63.61M64.59M78.02M58.92M47.60M
EBITDA
78.63M71.39M84.30M63.10M51.09M
Net Income Common Stockholders
61.64M54.46M67.77M49.87M37.99M
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.15M748.00K11.23M1.04M768.00K
Total Assets
534.19M506.74M436.81M366.67M338.62M
Total Debt
1.40M25.57M5.32M7.99M36.17M
Net Debt
247.00K24.82M2.50M6.95M35.41M
Total Liabilities
40.24M70.01M54.71M57.27M79.42M
Stockholders Equity
493.96M436.74M382.10M309.39M259.19M
Cash FlowFree Cash Flow
26.78M-21.25M-5.49M54.34M-4.88M
Operating Cash Flow
35.99M-13.54M-1.69M60.30M-2.04M
Investing Cash Flow
-6.71M-9.77M9.08M-31.94M-2.72M
Financing Cash Flow
-28.88M21.23M-5.61M-28.08M3.60M

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
UHUHG
74
Outperform
$176.98M4.5397.48%5.24%-89.62%
HOHOV
69
Neutral
$511.94M3.1128.55%7.93%-3.59%
BZBZH
66
Neutral
$626.98M6.687.97%13.50%-40.36%
CCCCS
65
Neutral
$1.58B5.3712.36%2.12%10.75%8.31%
63
Neutral
$528.91M9.5111.90%-1.62%7.51%
62
Neutral
$6.90B11.122.92%3.89%2.68%-25.06%
58
Neutral
$1.17B6.469.36%-4.37%-3.17%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
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.