LGI Homes (LGIH)
NASDAQ:LGIH
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LGI Homes
(NASDAQ:LGIH)
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Rating:48Neutral
Price Target:
$38.00
▼(-2.19% Downside)
Action:ReiteratedDate:03/19/26
The score is primarily held down by weakening profitability and, most importantly, multi-year negative operating/free cash flow, alongside bearish technicals with the stock trading well below key moving averages. Partially offsetting these are a moderate P/E valuation and an earnings call that showed improved demand indicators (backlog/orders) and provided 2026 guidance, though cancellations and margin pressure remain significant.
Positive Factors
Backlog and Net Orders Growth
A materially larger backlog and strong net orders provide multi-quarter visibility into closings and revenue, letting management plan production, procure labor/materials, and monetize lots. Durable demand signals reduce near-term execution risk and support pipeline-driven cash generation if cancellations remain controlled.
Negative Factors
Persistent Negative Cash Flow
Multi-year negative operating and free cash flow forces reliance on revolver draws, lot monetization, or equity to fund operations. This structural cash burn reduces financial optionality, elevates refinancing and interest-rate sensitivity, and must reverse to restore sustainable capital allocation and deleveraging.
Read all positive and negative factors
Positive Factors
Negative Factors
Backlog and Net Orders Growth
A materially larger backlog and strong net orders provide multi-quarter visibility into closings and revenue, letting management plan production, procure labor/materials, and monetize lots. Durable demand signals reduce near-term execution risk and support pipeline-driven cash generation if cancellations remain controlled.
Read all positive factors
LGI Homes (LGIH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$898.72M
Dividend YieldN/A
Average Volume (3M)547.66K
Price to Earnings (P/E)13.7
Beta (1Y)1.05
Revenue Growth-20.62%
EPS Growth-45.74%
CountryUS
Employees1,000
SectorConsumer Cyclical
Sector Strength84
IndustryResidential Construction
Share Statistics
EPS (TTM)0.97
Shares Outstanding23,133,085
10 Day Avg. Volume691,774
30 Day Avg. Volume547,658
Financial Highlights & Ratios
PEG Ratio-0.22
Price to Book (P/B)0.48
Price to Sales (P/S)0.58
P/FCF Ratio-7.07
Enterprise Value/Market Cap2.78
Enterprise Value/Revenue1.46
Enterprise Value/Gross Profit7.06
Enterprise Value/Ebitda25.65
Forecast
1Y Price Target
$38.00Price Target Upside-2.19% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering1
EPS Forecast (FY)2.53
Revenue Forecast (FY)$1.83B
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 ...
How the Company Makes Money
LGI Homes generates the vast majority of its revenue from selling newly constructed single-family homes. Its core revenue stream is home sales revenue recognized at the time homes are closed and delivered to buyers; this sale price generally refle...
LGI Homes Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 28, 2026
Earnings Call Sentiment Positive
The call highlights operational resilience and tangible positives: strong backlog growth (+133% homes, +112% backlog value), notable net orders growth (+39% YoY), milestone of 80,000 homes closed, healthy liquidity and a clear 2026 guide. However, the business faces meaningful near-term pressures — elevated cancellations (43.3%), margin compression (Q4 gross margin down ~370 bps YoY), inventory impairment ($6.7M) and ongoing need for incentives — that weigh on profitability. On balance, management demonstrated disciplined execution, maintained profitability, and provided conservative guidance, with the positives (backlog, orders, liquidity, milestone, profitability) outweighing the headwinds.Positive Updates
Strong Q4 Delivery and Revenue
Delivered 1,362 homes in Q4 (1,301 contributed to revenue) generating $474.0 million in revenue; sequential revenue increase of 19.5%.
Negative Updates
Elevated Cancellation Rate
Cancellation rate increased to 43.3% due to affordability pressures and extended time between contract and close; management expects this dynamic to persist.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Q4 Delivery and Revenue
Delivered 1,362 homes in Q4 (1,301 contributed to revenue) generating $474.0 million in revenue; sequential revenue increase of 19.5%.
Read all positive updates
Company Guidance
For 2026 management guided to full-year closings of 4,600–5,400 homes and an end‑of‑year active selling community count of 150–160, with a full‑year average sales price expected to be $355,000–$365,000 and wholesale closings representing roughly 10%–15% of total closings; they will continue to support affordability via closing‑cost assistance, interest‑rate buydowns, discounts on older inventory and selective price adjustments, and provided financial targets of gross margin 18%–20%, adjusted gross margin 21%–23%, SG&A 15%–16% and an effective tax rate of about 26.5% while opportunistically monetizing lots and working to reduce debt toward the midpoint of their 35%–45% net‑debt‑to‑capital target.LGI Homes Financial Statement Overview
Summary
Income Statement
46
Neutral
Balance Sheet
58
Neutral
Cash Flow
27
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.71B | 2.20B | 2.36B | 2.30B | 3.05B |
| Gross Profit | 353.55M | 533.29M | 542.19M | 646.60M | 818.03M |
| EBITDA | 102.81M | 262.02M | 235.66M | 391.68M | 548.85M |
| Net Income | 72.55M | 196.07M | 199.23M | 326.57M | 429.64M |
Balance Sheet | |||||
| Total Assets | 3.93B | 3.76B | 3.41B | 3.12B | 2.35B |
| Cash, Cash Equivalents and Short-Term Investments | 61.25M | 53.20M | 48.98M | 32.00M | 50.51M |
| Total Debt | 1.66B | 1.52B | 1.46B | 1.41B | 810.57M |
| Total Liabilities | 1.83B | 1.72B | 1.55B | 1.48B | 956.02M |
| Stockholders Equity | 2.10B | 2.04B | 1.86B | 1.64B | 1.40B |
Cash Flow | |||||
| Free Cash Flow | -140.90M | -145.69M | -58.41M | -371.64M | 19.97M |
| Operating Cash Flow | -139.97M | -143.74M | -56.97M | -370.45M | 21.70M |
| Investing Cash Flow | 27.94M | 15.62M | -13.65M | -5.97M | -70.39M |
| Financing Cash Flow | 120.08M | 132.34M | 87.60M | 357.90M | 63.26M |
LGI Homes Technical Analysis
Negative
38.85
Price Trends
47.76
Negative
47.98
Negative
51.10
Negative
Market Momentum
-2.65
Negative
40.42
Neutral
55.84
Neutral
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 38.85 is below the 20-day moving average (MA) of 39.23, below the 50-day MA of 47.76, and below the 200-day MA of 51.10, indicating a bearish trend. The MACD of -2.65 indicates Negative momentum. The RSI at 40.42 is Neutral, neither overbought nor oversold. The STOCH value of 55.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LGIH.
LGI Homes Risk Analysis
LGI Homes disclosed 53 risk factors in its most recent earnings report. LGI Homes reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
LGI Homes Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $3.98B | 11.14 | 7.29% | ― | -16.60% | -29.85% | |
63 Neutral | $1.68B | 12.06 | 8.37% | 1.99% | -6.28% | -31.55% | |
62 Neutral | $657.53M | 8.76 | 6.81% | ― | -0.84% | -76.30% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
48 Neutral | $898.72M | 13.73 | 3.51% | ― | -20.62% | -45.74% | |
46 Neutral | $601.64M | -4.50 | 0.81% | ― | 1.77% | -66.27% | |
41 Neutral | $68.83M | -5.63 | -23.25% | ― | -6.20% | 24.90% |
* Consumer Cyclical Sector Average
LGIH
LGI Homes
38.85
-17.86
-31.49%
BZH
Beazer Homes
20.39
2.10
11.48%
HOV
Hovnanian Enterprises
112.91
24.57
27.81%
TPH
Tri Pointe
46.79
17.83
61.57%
CCS
Century Communities
57.74
-0.04
-0.07%
UHG
United Homes Group
1.17
-1.32
-53.01%
LGI Homes Corporate Events
Business Operations and StrategyFinancial Disclosures
LGI Homes Posts 2025 Results, Issues Cautious 2026 Outlook
Positive
Feb 17, 2026
LGI Homes reported fourth-quarter and full-year 2025 results on February 17, 2026, posting Q4 home sales revenue of $474.0 million on 1,301 home closings with an average sales price of $364,310 and an adjusted gross margin of 22.3%. For 2025, the ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.