LGI Homes (LGIH) AI Stock Analysis

• Market Cap: $1.50B
• Dividend Yield: N/A
• Average Volume (3M): 382.14K
• Price to Earnings (P/E): 9.8
• Beta (1Y): 1.36
• Revenue Growth: -7.89%
• EPS Growth: -19.53%
• Country: US
• Employees: 1,000
• Sector: Consumer Cyclical
• Sector Strength: 75
• Industry: Residential Construction
• EPS (TTM): 1.36
• Shares Outstanding: 23,056,635
• 10 Day Avg. Volume: 462,959
• 30 Day Avg. Volume: 382,142
• 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: 1.92
• Enterprise Value/Revenue: 1.33
• Enterprise Value/Gross Profit: 5.60
• Enterprise Value/Ebitda: 14.35
• 1Y Price Target: $68.60
• Price Target Upside: 5.51% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 67 Neutral
• Price Target: $72.00 ▲(10.74% Upside)

LGI Homes' overall stock score reflects a combination of stable financial performance, strong technical indicators, and attractive valuation. However, challenges in revenue growth and cash flow management, along with mixed earnings call sentiment, temper the outlook. The stock's bullish momentum and undervaluation are key strengths, but caution is advised due to potential market headwinds.

Positive Factors

Future Earnings Potential

Incremental improvement to the selling environment should combine with continued expansion in community count into the out years to ramp earnings and drive the stock.

Valuation

Valuation attractive. LGIH is currently trading at 0.81x of our FTM book value, well below its five-year average of 2.4x, and functionally at historical trough levels.

Negative Factors

Delivery Guidance

Initial 2025 guidance below expectations. LGIH has guided to 6,200 to 7,000 home deliveries in 2025, with the midpoint of 6,600 below the consensus expectation of 7,439 and our estimate of 6,713.

Earnings

LGIH reported 4Q EPS of $2.15, below our $2.30 estimate, driven by lower gross margin, higher SG&A/sales, and lower ASP than expected.

Operating Margins

The decline reflects a slower sales pace and lower operating margins.

Sales Performance

Order growth of only 8% was significantly below the 35% expectation.

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's revenue model is centered on building and selling homes in various communities, where they typically acquire land, develop it, and construct homes for sale. Key revenue streams include home sales, which make up the majority of their earnings, and ancillary services such as mortgage financing and title services offered through their subsidiaries. Additionally, LGI Homes benefits from strategic partnerships with local suppliers and subcontractors, which help manage construction costs and improve efficiency. The company's focus on entry-level homes allows it to tap into a significant market segment, especially during periods of favorable economic conditions and low mortgage rates. Overall, LGI Homes' revenue is closely tied to housing market trends, consumer demand for homes, and the overall economic environment.

LGI Homes Financial Statement Overview

Summary

LGI Homes shows a mixed financial performance with stable margins and balanced leverage, but faces challenges in revenue growth and cash flow management. The company maintains reasonable profitability ratios, but needs to improve cash generation and address declining revenues to enhance overall financial stability.

Income Statement

LGI Homes shows a mixed performance with declining revenues and profitability. The Gross Profit Margin stands at 24.39% TTM, which is reasonable, but the Net Profit Margin of 10.10% TTM has decreased. Revenue growth has been negative, indicating challenges in maintaining sales momentum. However, the company maintains a stable EBIT Margin at 10.69% TTM and an EBITDA Margin at 11.10% TTM, reflecting operational efficiency despite revenue declines.

Balance Sheet

The company's balance sheet reflects moderate financial leverage with a Debt-to-Equity Ratio of 0.80 TTM, indicating a balanced capital structure. Return on Equity is 8.96% TTM, which is adequate but shows room for improvement. The Equity Ratio of 52.53% TTM suggests a healthy level of equity financing, providing a buffer against liabilities. Overall, the balance sheet is stable, though improvements in equity returns could enhance performance.

Cash Flow

Cash flow analysis reveals challenges with negative Free Cash Flow growth and a negative Operating Cash Flow to Net Income Ratio of -0.94 TTM, indicating cash generation issues. The Free Cash Flow to Net Income Ratio is also negative, reflecting cash flow struggles despite profitability. These factors highlight the need for better cash management to support operations and growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.16B	2.20B	2.36B	2.30B	3.05B	2.37B
Gross Profit	515.60M	533.29M	542.19M	646.60M	818.03M	603.10M
EBITDA	201.09M	212.15M	235.66M	391.68M	548.85M	370.29M
Net Income	183.01M	196.07M	199.23M	326.57M	429.64M	323.89M
Balance Sheet
Total Assets	3.89B	3.76B	3.41B	3.12B	2.35B	1.83B
Cash, Cash Equivalents and Short-Term Investments	57.60M	53.20M	48.98M	32.00M	50.51M	35.94M
Total Debt	1.62B	1.48B	1.36B	1.26B	805.24M	538.40M
Total Liabilities	1.85B	1.72B	1.55B	1.48B	956.02M	687.08M
Stockholders Equity	2.04B	2.04B	1.86B	1.64B	1.40B	1.14B
Cash Flow
Free Cash Flow	-173.18M	-145.69M	-58.41M	-371.64M	19.97M	199.47M
Operating Cash Flow	-171.39M	-143.74M	-56.97M	-370.45M	21.70M	202.16M
Investing Cash Flow	13.36M	15.62M	-13.65M	-5.97M	-70.39M	-5.65M
Financing Cash Flow	166.64M	132.34M	87.60M	357.90M	63.26M	-198.91M

LGI Homes Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 65.02
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LGIH, the sentiment is Positive. The current price of 65.02 is above the 20-day moving average (MA) of 57.47, above the 50-day MA of 54.04, and below the 200-day MA of 73.72, indicating a neutral trend. The MACD of 2.36 indicates Negative momentum. The RSI at 65.91 is Neutral, neither overbought nor oversold. The STOCH value of 90.18 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LGIH.

LGI Homes Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HOV	79 Outperform	$803.94M	5.49	28.55%	―	7.93%	-3.59%
TPH	79 Outperform	$3.07B	8.94	11.38%	―	-3.59%	-10.82%
DFH	74 Outperform	$2.60B	9.50	23.25%	―	20.18%	-1.04%
CCS	73 Outperform	$1.87B	7.70	10.34%	1.68%	3.76%	-17.55%
Sector *	67 Neutral	¥277.37B	14.70	6.81%	2.50%	5.06%	-23.65%
LGIH	67 Neutral	$1.50B	9.81	7.84%	―	-7.89%	-19.53%
BZH	61 Neutral	$719.66M	11.63	5.65%	―	9.97%	-52.57%

LGI Homes Corporate Events

LGI Homes Reports Q2 2025 Financial Results

LGI Homes, Inc. reported its financial results for the second quarter of 2025, highlighting a revenue of $483.5 million from 1,323 home sales at an average price of $365,446. Despite challenges such as interest rates affecting affordability, the company managed to increase its gross margin and repurchased 367,568 shares of stock. While withdrawing its full-year guidance due to market uncertainties, LGI Homes remains optimistic about the housing market’s long-term prospects, driven by strong demographics and a shortage of new homes.

The most recent analyst rating on (LGIH) stock is a Sell with a $115.00 price target. To see the full list of analyst forecasts on LGI Homes stock, see the LGIH Stock Forecast page.