LGI Homes (LGIH) AI Stock Analysis

• Market Cap: $1.12B
• Dividend Yield: N/A
• Average Volume (3M): 387.53K
• Price to Earnings (P/E): 10.2
• Beta (1Y): 1.08
• 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: 460,095
• 30 Day Avg. Volume: 387,533
• 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: 2.58
• Enterprise Value/Revenue: 1.62
• Enterprise Value/Gross Profit: 7.27
• Enterprise Value/Ebitda: 25.33
• 1Y Price Target: $72.13
• Price Target Upside: 54.35% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): 3.69
• Revenue Forecast (FY): $1.71B

• Rating: 54 Neutral
• Price Target: $45.00 ▼(-3.70% Downside)

LGI Homes faces significant financial challenges, with declining revenue and profitability margins, and increased leverage. Technical indicators suggest a bearish trend, while the valuation indicates potential undervaluation. The earnings call provided mixed signals, with positive order growth but significant revenue decline. Overall, the stock score reflects these challenges and opportunities.

Positive Factors

Order and Backlog Growth

The growth in orders and backlog indicates strong demand and effective sales strategies, positioning LGI Homes for sustained revenue growth.

Community Growth Plans

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

Improved Financial Liquidity

Enhanced liquidity provides LGI Homes with the financial flexibility to invest in growth opportunities and manage economic fluctuations.

Negative Factors

Revenue Decline

Significant revenue decline reflects challenges in maintaining sales volume, which could impact profitability and market position.

Decreased Gross Margin

Reduced gross margins suggest increased cost pressures, potentially affecting LGI Homes' ability to sustain profitability.

High Cancellation Rate

A high cancellation rate indicates challenges in converting sales, which could hinder revenue stability and growth efforts.

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 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	114.16M	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: Neutral
• Last Price: 46.73
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LGIH, the sentiment is Neutral. The current price of 46.73 is above the 20-day moving average (MA) of 44.89, below the 50-day MA of 51.67, and below the 200-day MA of 60.10, indicating a neutral trend. The MACD of -1.56 indicates Negative momentum. The RSI at 49.78 is Neutral, neither overbought nor oversold. The STOCH value of 78.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LGIH.

LGI Homes Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TPH	75 Outperform	$2.70B	9.33	9.47%	―	-16.60%	-29.85%
CCS	69 Neutral	$1.76B	8.76	8.37%	1.86%	-6.28%	-31.55%
HOV	68 Neutral	$775.38M	5.86	20.08%	―	7.97%	-35.64%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
BZH	57 Neutral	$655.45M	9.94	5.65%	―	9.97%	-52.57%
LGIH	54 Neutral	$1.12B	10.19	5.21%	―	-20.62%	-45.74%
UHG	47 Neutral	$85.26M	21.75	-51.69%	―	-6.20%	24.90%

LGI Homes Corporate Events

LGI Homes Reports Strong Q3 2025 Results

LGI Homes, Inc., headquartered in The Woodlands, Texas, is a prominent player in the homebuilding industry, known for its innovative approach to designing, constructing, and selling homes across 36 markets in 21 states. The company is recognized for its quality construction and customer service, making homeownership accessible for families nationwide.

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.

The most recent analyst rating on (LGIH) stock is a Hold with a $50.00 price target. To see the full list of analyst forecasts on LGI Homes stock, see the LGIH Stock Forecast page.

LGI Homes Reports Solid Q2 2025 Results

LGI Homes, Inc., headquartered in The Woodlands, Texas, is a leading homebuilder known for its innovative approach to designing, constructing, and selling homes across 36 markets in 21 states. The company has gained recognition for its quality construction and customer service, making it one of America’s fastest-growing companies.

LGI Homes Earnings Call: Mixed Sentiments and Strategic Focus

The latest earnings call from LGI Homes Inc. presented a mixed sentiment, reflecting both strengths and challenges faced by the company. On one hand, the company demonstrated robust financial management and community growth. On the other hand, it grappled with significant hurdles in revenue, cancellations, and a challenging demand environment. While LGI Homes is actively addressing these issues, it continues to navigate a difficult market landscape.

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.