LGI Homes (LGIH) AI Stock Analysis

• Market Cap: $1.07B
• Dividend Yield: N/A
• Average Volume (3M): 320.69K
• Price to Earnings (P/E): 10.2
• Beta (1Y): 0.95
• Revenue Growth: -20.62%
• EPS Growth: -45.74%
• Country: US
• Employees: 1,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Residential Construction
• EPS (TTM): 0.85
• Shares Outstanding: 23,079,100
• 10 Day Avg. Volume: 299,268
• 30 Day Avg. Volume: 320,694
• PEG Ratio: -6.07
• Price to Book (P/B): 1.03
• Price to Sales (P/S): 0.96
• P/FCF Ratio: -14.44
• Enterprise Value/Market Cap: 2.70
• Enterprise Value/Revenue: 1.62
• Enterprise Value/Gross Profit: 7.27
• Enterprise Value/Ebitda: 24.43
• 1Y Price Target: $50.00
• Price Target Upside: 8.04% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2
• EPS Forecast (FY): 3.51
• Revenue Forecast (FY): $1.72B

• Rating: 65 Neutral
• Price Target: $52.00 ▲(12.36% Upside)

LGI Homes' overall stock score reflects strong profitability and undervaluation, offset by revenue decline, cash flow challenges, and increased leverage. Positive momentum in orders and backlog growth, along with strategic initiatives, provide optimism for future performance. However, liquidity concerns and market uncertainty temper the outlook.

Positive Factors

Profitability Margins

LGI Homes' strong profitability margins indicate efficient cost management and the ability to sustain earnings, providing a buffer against market fluctuations.

Order and Backlog Growth

The growth in orders and backlog reflects effective sales strategies and positions LGI Homes for future revenue stability and growth.

Community Growth Plans

Expanding community count demonstrates LGI Homes' commitment to growth and market penetration, supporting long-term revenue potential.

Negative Factors

Revenue Decline

A significant decline in revenue indicates potential challenges in market demand and sales execution, impacting future financial performance.

High Cancellation Rate

High cancellation rates suggest customer hesitancy or dissatisfaction, which could undermine sales stability and brand reputation.

Increased Leverage

Increased leverage can strain financial flexibility and elevate risk, potentially affecting LGI Homes' ability to invest in growth opportunities.

LGI Homes Business Overview & Revenue Model

Company Description

LGI Homes, Inc. designs, constructs, and sells homes. It offers entry-level homes, such as attached and detached homes, and active adult homes under the LGI Homes brand name; and luxury series homes under the Terrata Homes brand name. The company also engages in the wholesale business, which include building and selling homes to companies looking to acquire single-family rental properties. As of December 31, 2021, it owned 101 communities. The company serves customers in Texas, Arizona, Florida, Georgia, New Mexico, Colorado, North Carolina, South Carolina, Washington, Tennessee, Minnesota, Oklahoma, Alabama, California, Oregon, Nevada, West Virginia, Virginia, and Pennsylvania. LGI Homes, Inc. was founded in 2003 and is headquartered in The Woodlands, Texas.

How the Company Makes Money

LGI Homes generates revenue primarily through the sale of newly constructed homes. The company builds homes on its own land and sells them directly to consumers, which allows for a streamlined sales process and higher margins. Key revenue streams include the sale of single-family homes, as well as the sale of lots to third-party builders. Additionally, LGI Homes benefits from economies of scale, as it operates in multiple markets and can leverage its purchasing power for materials and labor. The company also maintains relationships with mortgage lenders, providing financing options to homebuyers, which can enhance sales and customer loyalty. Furthermore, its focus on affordable housing positions it well in a market with high demand for entry-level homes, contributing to steady revenue growth.

LGI Homes Financial Statement Overview

Summary

LGI Homes is experiencing financial challenges, with declining revenue growth and profitability margins. The balance sheet shows increased leverage, which could be risky in uncertain economic conditions. Cash flow issues further compound these challenges, indicating potential liquidity constraints. While the company has some strengths, such as a stable equity ratio, overall financial health appears to be under pressure.

Income Statement

LGI Homes has experienced a significant decline in revenue growth, with a TTM revenue growth rate of -72.73%. Gross profit margin has decreased slightly over the years, and net profit margin has also declined. The EBIT and EBITDA margins have shown a downward trend, indicating reduced operational efficiency. These factors suggest challenges in maintaining profitability and growth.

Balance Sheet

The company's debt-to-equity ratio has increased over time, indicating higher leverage, which could pose risks in a volatile market. Return on equity has decreased, reflecting reduced profitability for shareholders. However, the equity ratio remains stable, suggesting a balanced asset structure. Overall, the balance sheet shows moderate stability with some concerns regarding leverage.

Cash Flow

LGI Homes has faced negative operating and free cash flows in recent periods, with a TTM operating cash flow coverage ratio of -1.43. The free cash flow to net income ratio is slightly above 1, indicating that free cash flow is just covering net income. The negative growth in free cash flow highlights cash management challenges, impacting the company's financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.79B	2.20B	2.36B	2.30B	3.05B	2.37B
Gross Profit	397.94M	533.29M	542.19M	646.60M	818.03M	603.10M
EBITDA	118.38M	262.02M	235.66M	391.68M	548.85M	370.29M
Net Income	106.10M	196.07M	199.23M	326.57M	429.64M	323.89M
Balance Sheet
Total Assets	4.04B	3.76B	3.41B	3.12B	2.35B	1.83B
Cash, Cash Equivalents and Short-Term Investments	61.98M	53.20M	48.98M	32.00M	50.51M	35.94M
Total Debt	1.76B	1.52B	1.46B	1.41B	810.57M	840.37M
Total Liabilities	1.96B	1.72B	1.55B	1.48B	956.02M	687.08M
Stockholders Equity	2.08B	2.04B	1.86B	1.64B	1.40B	1.14B
Cash Flow
Free Cash Flow	-171.27M	-145.69M	-58.41M	-371.64M	19.97M	199.47M
Operating Cash Flow	-169.74M	-143.74M	-56.97M	-370.45M	21.70M	202.16M
Investing Cash Flow	36.57M	15.62M	-13.65M	-5.97M	-70.39M	-5.65M
Financing Cash Flow	134.25M	132.34M	87.60M	357.90M	63.26M	-198.91M

LGI Homes Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 46.28
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LGIH, the sentiment is Negative. The current price of 46.28 is below the 20-day moving average (MA) of 49.46, below the 50-day MA of 47.06, and below the 200-day MA of 55.35, indicating a bearish trend. The MACD of -0.24 indicates Positive momentum. The RSI at 42.89 is Neutral, neither overbought nor oversold. The STOCH value of 14.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LGIH.

LGI Homes Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TPH	73 Outperform	$2.82B	9.74	9.47%	―	-16.60%	-29.85%
CCS	69 Neutral	$1.81B	8.98	8.37%	1.90%	-6.28%	-31.55%
LGIH	65 Neutral	$1.07B	10.22	5.21%	―	-20.62%	-45.74%
HOV	63 Neutral	$632.42M	14.16	7.76%	―	-0.84%	-76.30%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
BZH	56 Neutral	$636.86M	14.02	3.67%	―	1.77%	-66.27%
UHG	44 Neutral	$76.46M	―	-51.69%	―	-6.20%	24.90%

LGI Homes Corporate Events

LGI Homes Reports Strong Q3 2025 Financial Results

LGI Homes, Inc. reported its third quarter 2025 financial results, highlighting a successful period with $396.6 million in revenue and 1,107 home closings. The company experienced an 8.1% year-over-year increase in net orders, ending the quarter with a backlog of 1,305 homes, up 19.9% from the previous year. The results reflect the positive impact of strategic initiatives, positioning LGI Homes for a strong year-end finish. Looking forward, the company expects to close between 1,300 and 1,500 homes in the fourth quarter, maintaining a focus on affordability and a strong land position to meet demand for entry-level homes.