Legence Corp. Class A (LGN)
NASDAQ:LGN
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Legence Corp. Class A
(NASDAQ:LGN)
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Rating:65Neutral
Price Target:
$108.00
▲(46.40% Upside)
Action:Reiterated
Date:05/14/26
LGN scores in the mid-range primarily due to strong cash flow momentum and a positive earnings-call update with raised guidance, record backlog, and improving leverage. The score is constrained by leveraged balance-sheet risk and earnings volatility (recent net loss), while technicals are strong but appear overextended and valuation is weakened by the negative P/E and lack of dividend support.
Positive Factors
Cash generation
Material improvement in operating and free cash flow provides durable internal funding for capex, working capital and M&A without immediate reliance on markets. Sustained cash conversion supports deleveraging, liquidity buffers and investment in higher-return fabrication capacity over coming quarters.
Negative Factors
High leverage
Elevated absolute debt increases interest and refinancing sensitivity, limiting financial flexibility in downturns. Even with pro‑forma deleveraging to ~1.8x, the debt burden and inconsistent equity history raise refinancing and covenant risks that could constrain capex or opportunistic investments.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Material improvement in operating and free cash flow provides durable internal funding for capex, working capital and M&A without immediate reliance on markets. Sustained cash conversion supports deleveraging, liquidity buffers and investment in higher-return fabrication capacity over coming quarters.
Read all positive factors
Legence Corp. Class A (LGN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.05B
Dividend YieldN/A
Average Volume (3M)1.68M
Price to Earnings (P/E)―
Beta (1Y)2.41
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees6,300
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)-0.37
Shares Outstanding76,866,800
10 Day Avg. Volume1,439,239
30 Day Avg. Volume1,684,664
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 Cap1.11
Enterprise Value/Revenue3.26
Enterprise Value/Gross Profit17.54
Enterprise Value/Ebitda53.77
Forecast
1Y Price Target
$93.69Price Target Upside27.01% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)1.42
Revenue Forecast (FY)$4.24B
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:May 14, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 13, 2026
Earnings Call Sentiment Positive
The call communicated strong operational and financial momentum: revenue more than doubled, adjusted EBITDA and free cash flow grew materially, backlog reached record levels, leverage improved and management raised full‑year guidance. Key challenges include consolidated gross margin compression driven by mix shift to lower‑margin I&M, margin pressure in E&C due to prior‑year comps and mix, acquisition‑related amortization and some volatile mark‑to‑market profit interest expense. On balance the positive items (sizeable revenue/EBITDA growth, record backlog, strong cash conversion and deleveraging) substantially outweigh the lowlights.Positive Updates
Revenue More Than Doubled Year‑Over‑Year
Total revenue grew to $1.038 billion in Q1 2026, an increase of ~105% YoY (≈+$506M). The Bowers acquisition contributed just over $240M; excluding Bowers, revenues rose ~57% YoY, driven primarily by Installation & Maintenance and data center/technology end markets.
Negative Updates
Consolidated Adjusted Gross Margin Compression
Adjusted consolidated gross margin declined to 18.7% in Q1 2026 from 21.9% in Q1 2025 (down ~320 basis points), primarily due to revenue mix shift toward lower‑margin Installation & Maintenance and weaker E&C margins.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue More Than Doubled Year‑Over‑Year
Total revenue grew to $1.038 billion in Q1 2026, an increase of ~105% YoY (≈+$506M). The Bowers acquisition contributed just over $240M; excluding Bowers, revenues rose ~57% YoY, driven primarily by Installation & Maintenance and data center/technology end markets.
Read all positive updates
Company Guidance
Legence set Q2 2026 guidance for consolidated revenue of $1.05–$1.10 billion and adjusted EBITDA of $115–$125 million, and raised full‑year 2026 guidance to $4.1–$4.3 billion of revenue (up ~10% from prior $3.7–$3.9B) and adjusted EBITDA to $470–$490 million (from $400–$430M). Management expects Q2 net interest of about $15 million and full‑year net interest in the high‑$50M range; full‑year depreciation & amortization in the mid‑$170M range; and CapEx of roughly $65M (about two‑thirds for growth). The raise reflects Q1 outperformance (Q1 revenue $1.038B, +105% YoY, with Bowers contributing ≈$240M; Q1 adjusted EBITDA $118M, margin 11.4%), record backlog and awards of $5.4B (up 104% YoY; excluding Bowers +36%; book‑to‑bill 1.2x; pro‑forma sequential net new backlog ≈$200M), strong cash generation (Q1 free cash flow >$100M, >85% conversion of adjusted EBITDA), total liquidity of $414M (cash $245M), total debt just over $1.0B (pro‑forma net leverage ~1.8x), ~1.3M sq ft of fabrication capacity and >10,000 employees supporting the outlook.Legence Corp. Class A Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
38
Negative
Cash Flow
79
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 |
|---|---|---|---|---|
Income Statement | ||||
| Total Revenue | 3.08B | 2.55B | 2.10B | 1.62B |
| Gross Profit | 573.55M | 535.92M | 428.64M | 315.15M |
| EBITDA | 187.09M | 160.92M | 156.62M | 107.05M |
| Net Income | -22.47M | -59.78M | 9.72M | -46.03M |
Balance Sheet | ||||
| Total Assets | 3.48B | 2.68B | 2.35B | 2.13B |
| Cash, Cash Equivalents and Short-Term Investments | 244.62M | 230.17M | 81.17M | 88.92M |
| Total Debt | 168.95M | 954.15M | 1.70B | 1.12B |
| Total Liabilities | 2.53B | 1.89B | 2.15B | 1.60B |
| Stockholders Equity | 505.44M | 392.20M | 0.00 | 0.00 |
Cash Flow | ||||
| Free Cash Flow | 297.13M | 218.93M | 10.26M | 16.84M |
| Operating Cash Flow | 347.52M | 256.87M | 29.27M | 33.92M |
| Investing Cash Flow | -347.32M | -54.05M | -243.99M | -133.90M |
| Financing Cash Flow | 155.29M | -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 |
|---|---|---|---|---|---|---|---|
75 Outperform | $1.37B | 23.74 | 19.38% | ― | 14.87% | 121.85% | |
67 Neutral | $556.99M | 64.26 | 5.40% | ― | 6.74% | 250.16% | |
65 Neutral | $9.05B | -250.22 | -5.43% | ― | ― | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $394.99M | 60.71 | 2.33% | ― | -4.25% | -67.60% | |
58 Neutral | $1.91B | 60.44 | 2.94% | ― | 8.57% | -42.26% | |
48 Neutral | $66.15M | -1.78 | 1577.14% | ― | -24.31% | -169.16% |
* Industrials Sector Average
LGN
Legence Corp. Class A
83.74
53.19
174.11%
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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.
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.