Legence Corp. Class A (LGN)
NASDAQ:LGN
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Legence Corp. Class A
(NASDAQ:LGN)
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Rating:64Neutral
Price Target:
$87.00
▲(17.93% Upside)
Action:ReiteratedDate:04/18/26
The score is driven primarily by improving operating/free cash flow and strong momentum indicators, supported by a positive earnings-call outlook with raised 2026 guidance and robust backlog. These strengths are offset by balance-sheet leverage concerns, GAAP earnings volatility (net loss), and overbought technical signals, while valuation is pressured by the negative P/E and lack of dividend yield data.
Positive Factors
Robust backlog and demand
A $3.7B backlog up ~49% and a 1.9x quarterly book-to-bill provide multi-year revenue visibility and smooth near-term demand cyclicality. This durable commercial pipeline supports capacity planning, stable utilization of fabrication assets, and predictable revenue conversion over the next 2–3 years.
Negative Factors
High leverage and pro forma debt rise
Elevated reported debt (~$954M) and pro forma leverage (~2.4x after acquisitions) constrain financial flexibility and increase interest and refinancing risk. In a capital-intensive, cyclical construction sector, sustained leverage can limit investment optionality and heighten vulnerability to revenue timing shifts.
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Positive Factors
Negative Factors
Robust backlog and demand
A $3.7B backlog up ~49% and a 1.9x quarterly book-to-bill provide multi-year revenue visibility and smooth near-term demand cyclicality. This durable commercial pipeline supports capacity planning, stable utilization of fabrication assets, and predictable revenue conversion over the next 2–3 years.
Read all positive factors
Legence Corp. Class A (LGN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
N/A
Dividend YieldN/A
Average Volume (3M)1.85M
Price to Earnings (P/E)―
Beta (1Y)2.35
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees6,300
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)-0.32
Shares Outstanding67,338,100
10 Day Avg. Volume3,356,890
30 Day Avg. Volume1,846,158
Financial Highlights & Ratios
PEG Ratio0.04
Price to Book (P/B)6.52
Price to Sales (P/S)1.00
P/FCF Ratio11.67
Enterprise Value/Market Cap10.00T>
Enterprise Value/Revenue3.66
Enterprise Value/Gross Profit21.45
Enterprise Value/Ebitda47.14
Forecast
1Y Price Target
$76.58Price Target Upside3.81% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
EPS Forecast (FY)0.98
Revenue Forecast (FY)$3.88B
Legence Corp. Class A Business Overview & Revenue Model
Company Description
Legence Corp. provides engineering, installation, and maintenance services for mission-critical systems in buildings in United States. The company operates through two segments, Engineering & Consulting, and Installation & Maintenance. The Enginee...
Legence Corp. Class A Earnings Call Summary
Earnings Call Date:Mar 27, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Nov 13, 2026
Earnings Call Sentiment Positive
The call presents a strongly positive operating and commercial performance: record quarterly revenue, sizable adjusted EBITDA growth and margin expansion, very robust backlog and book-to-bill, upgraded 2026 guidance, improved liquidity, and strategic acquisitions that add capacity and workforce. Notable negatives are largely noncash or one-time in nature (large book tax expense driven by non-deductible items, a $27.4M goodwill impairment, and legacy stock‑based compensation volatility) along with some margin compression in Engineering & Consulting and a lengthening backlog that pushes some revenue into later years. On balance, the operational achievements and upgraded outlook materially outweigh the lowlights.Positive Updates
Record Quarterly and Annual Revenue Growth
Q4 2025 revenue was $738.0M, up 35% year-over-year. Full year 2025 consolidated revenue was $2.6B, up 22% versus 2024.
Negative Updates
Large Non‑Cash Book Tax Expense
Reported income tax expense for full year 2025 was $2,022,200,000 despite a book loss, driven by non-deductible items; cash taxes for 2025 were $16.4M. Management expects 2026 ETR in the mid-30%–40% range and cash taxes in the low $30M range, with ETR trending toward ~30% over time. Complexity could add volatility to reported results.
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Q4-2025 Updates
Positive
Negative
Record Quarterly and Annual Revenue Growth
Q4 2025 revenue was $738.0M, up 35% year-over-year. Full year 2025 consolidated revenue was $2.6B, up 22% versus 2024.
Read all positive updates
Company Guidance
Legence guided Q1 2026 consolidated revenue of $925–$950M and adjusted EBITDA of $90–$100M (Q1 includes a full quarter of Bowers and a partial contribution from Metrix, implying an EBITDA margin of roughly 9.5%–10.8%), and raised full‑year 2026 guidance to revenue of $3.7–$3.9B and adjusted EBITDA of $400–$430M (up from prior revenue guidance of $3.475–$3.75725B and prior EBITDA $370–$400M, implying FY EBITDA margin of roughly 10.3%–11.6%). Other modeling items: Q1 interest expense (net) ~ $15M and FY interest expense in the high‑$50M range; Q1 D&A ~ $45M and FY D&A $170–$180M; FY CapEx ~$65M (about two‑thirds for growth/capacity expansion); 2026 cash taxes expected in the low‑$30M range with an estimated 2026 effective tax rate of mid‑30%–40% (gradually toward ~30% thereafter); a TRA payment expected in early 2027 in the mid‑single‑million range; and the company expects to burn a little over half of its backlog in 2026.Legence Corp. Class A Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
38
Negative
Cash Flow
79
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 |
|---|---|---|---|
Income Statement | |||
| Total Revenue | 2.55B | 2.10B | 1.62B |
| Gross Profit | 435.56M | 428.64M | 315.15M |
| EBITDA | 196.00M | 156.62M | 107.05M |
| Net Income | -59.78M | 9.72M | -46.03M |
Balance Sheet | |||
| Total Assets | 2.68B | 2.35B | 2.13B |
| Cash, Cash Equivalents and Short-Term Investments | 230.17M | 81.17M | 88.92M |
| Total Debt | 954.15M | 1.70B | 1.12B |
| Total Liabilities | 1.89B | 2.15B | 1.60B |
| Stockholders Equity | 392.20M | 0.00 | 0.00 |
Cash Flow | |||
| Free Cash Flow | 218.93M | 10.26M | 16.84M |
| Operating Cash Flow | 256.87M | 29.27M | 33.92M |
| Investing Cash Flow | -54.05M | -243.99M | -133.90M |
| Financing Cash Flow | -53.83M | 206.96M | 128.47M |
Legence Corp. Class A Risk Analysis
Legence Corp. Class A disclosed 78 risk factors in its most recent earnings report. Legence Corp. Class A 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
Legence Corp. Class A Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $1.12B | 29.35 | 19.12% | ― | 20.46% | 122.26% | |
64 Neutral | ― | -42.75 | -20.81% | ― | ― | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $400.04M | -30.18 | 3.32% | ― | -4.25% | -67.60% | |
57 Neutral | $551.33M | 158.32 | 1.60% | ― | 6.74% | 250.16% | |
49 Neutral | $1.57B | 34.84 | 4.24% | ― | 9.16% | -22.45% | |
42 Neutral | $57.90M | -521.01 | -501.93% | ― | -21.22% | -158.43% |
* Industrials Sector Average
LGN
Legence Corp. Class A
86.96
56.41
184.65%
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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.
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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.