Legence Corp. Class A (LGN) AI Stock Analysis

• Market Cap: $2.40B
• Dividend Yield: N/A
• Average Volume (3M): 904.87K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.96
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: N/A
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): -0.02
• Shares Outstanding: 63,856,976
• 10 Day Avg. Volume: 787,847
• 30 Day Avg. Volume: 904,866
• PEG Ratio: -1.51
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.85
• P/FCF Ratio: 173.94
• Enterprise Value/Market Cap: 2.57
• Enterprise Value/Revenue: 3.41
• Enterprise Value/Gross Profit: 15.91
• Enterprise Value/Ebitda: 38.25
• 1Y Price Target: $53.00
• Price Target Upside: 2.85% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 0.97
• Revenue Forecast (FY): $3.46B

• Rating: 56 Neutral
• Price Target: $48.00 ▼(-6.85% Downside)
• Action: Reiterated Date: 01/31/26
• Date: Action: Reiterated 01/31/26

The score is held back primarily by financial risk: high leverage relative to profit/cash flow and limited balance-sheet visibility (reported equity absent), alongside modest and weakening free cash flow. Offsetting this, the earnings call points to strong operating momentum (record growth, robust backlog/book-to-bill, and multi-year guidance), while technicals are neutral-to-mildly positive and valuation cannot be judged due to missing P/E and dividend data.

Positive Factors

Top-line Growth & Profitability

Sustained revenue growth to $2.1B and a return to positive net income provide durable scale and operating leverage. This strengthens capacity to win larger contracts, fund investments, and sustain margin improvement if execution and backlog convert to revenue over multiple quarters.

Backlog and Book-to-Bill

A 1.5x book-to-bill and rising backlog deliver multi-quarter revenue visibility, enabling better resource planning and utilization. Durable backlog supports steadier revenue conversion, reduces bid-to-win pressure and underpins medium-term growth assumptions across mission-critical end markets.

Strategic Acquisition & Capability Expansion

Closing Bowers materially expands mechanical, plumbing and fabrication capacity in a key metro market, strengthening service breadth for data center and healthcare clients. This inorganic capability lift can drive cross-selling and higher-margin prefabrication work over the medium term.

Negative Factors

Elevated Leverage and Missing Equity Disclosure

A large absolute debt load and reported zero equity obscure balance-sheet cushions and raise refinancing and covenant risks. Structural leverage limits financial flexibility for bids, capex and M&A and increases vulnerability to margin or cash-flow shocks over the next several quarters.

Modest and Declining Cash Generation

Low and falling operating and free cash flow, with FCF covering only ~35% of net income, limits debt reduction and reinvestment capacity. Persistent weak cash conversion constrains the company's ability to service debt and to fund growth without dilutive financing or higher leverage.

Thin Margins and Cost Pressure

Very low net and operating margins leave profitability sensitive to subcontractor costs, project execution and higher SG&A (IPO-related). Structural margin pressure reduces free cash potential and makes earnings vulnerable to cyclical swings in the construction and data-center project pipeline.

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 Engineering & Consulting segment designs HVAC and other MEP systems for buildings, develops strategies to help reduce energy usage and make buildings more sustainable and provides program and project management services for client's installation and retrofit projects. It offers engineering and design, and program and project management services. The Installation & Maintenance segment fabricates and installs HVAC systems, process piping and other MEP systems in new and existing industrial, commercial and institutional buildings and provides ongoing preventative and corrective maintenance services for those systems. The company serves data centers, semiconductors, precision manufacturing, life sciences, healthcare, education, and commercial real estate industries, as well as public sector. The company was founded in 1914 and is based in San Jose, California.

How the Company Makes Money

null

Legence Corp. Class A Financial Statement Overview

Summary

Strong 2024 revenue growth and a return to profitability are positives, but earnings power remains thin (very low net margin) and cash generation is modest and declining. Balance-sheet risk is elevated given the large debt load and the lack of reported equity, limiting financial cushion.

Income Statement

Revenue expanded strongly in 2024 to $2.10B from $1.62B in 2023, indicating solid top-line momentum. Profitability improved materially with net income turning positive in 2024 ($9.7M) after a loss in 2023 (-$46.0M), and gross margin edged up (~20.4% vs ~19.5%). However, overall earnings power remains thin: net margin is still very low (~0.5%) and operating profitability is modest (EBIT margin ~2.2%), leaving results sensitive to cost pressure and project execution.

Balance Sheet

Leverage appears elevated, with total debt rising to $1.70B in 2024 from $1.12B in 2023 while assets increased to $2.35B. Reported stockholders’ equity is shown as 0 in both years, which prevents assessing balance-sheet cushion and makes leverage and equity-return metrics unreliable; nevertheless, the absolute debt load versus the company’s profit level looks like a key risk factor.

Cash Flow

Cash generation is positive but not strong relative to earnings quality and funding needs: operating cash flow was $29.3M in 2024 (down from $33.9M in 2023) and free cash flow was $10.3M (down from $16.8M). Free cash flow covered only about 35% of net income in 2024, suggesting profits are not fully translating into cash. Positive free cash flow is a strength, but the low level and year-over-year decline reduce financial flexibility given the debt load.

Breakdown	TTM	Dec 2024	Dec 2023
Income Statement
Total Revenue	1.81B	2.10B	1.62B
Gross Profit	388.44M	428.64M	315.15M
EBITDA	161.56M	156.62M	107.05M
Net Income	-27.06M	9.72M	-46.03M
Balance Sheet
Total Assets	2.60B	2.35B	2.13B
Cash, Cash Equivalents and Short-Term Investments	176.03M	81.17M	88.92M
Total Debt	941.55M	1.70B	1.12B
Total Liabilities	1.77B	2.15B	1.60B
Stockholders Equity	387.88M	0.00	0.00
Cash Flow
Free Cash Flow	137.39M	10.26M	16.84M
Operating Cash Flow	162.12M	29.27M	33.92M
Investing Cash Flow	-24.96M	-243.99M	-133.90M
Financing Cash Flow	-42.30M	206.96M	128.47M

Legence Corp. Class A Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WLDN	67 Neutral	$1.12B	29.35	19.12%	―	12.90%	72.61%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BBCP	58 Neutral	$346.50M	-30.18	3.32%	―	-8.98%	-38.23%
LGN	56 Neutral	$2.40B	-782.43	-10.72%	―	―	―
ORN	55 Neutral	$412.46M	158.32	1.60%	―	7.02%	―
AMRC	52 Neutral	$1.42B	34.84	4.24%	―	12.22%	17.41%
SLND	42 Neutral	$40.31M	-0.77	-84.16%	―	-9.10%	21.10%

Legence Corp. Class A Corporate Events

Legence Corp. Completes Strategic Acquisition of Bowers Group

On January 2, 2026, Legence Corp. completed its previously announced acquisition of The Bowers Group, a long-established mechanical contractor based in Beltsville, Maryland that serves clients across the Northern Virginia and Washington, D.C. metropolitan area. The transaction, which followed the expiration of the Hart-Scott-Rodino waiting period on December 31, 2025, was structured with an upfront purchase price of $325 million funded through a mix of cash on hand, borrowings under the company’s revolving credit facility, a $200 million incremental term loan under an amended 2020 credit agreement, and the issuance of approximately 2.55 million shares of Class A common stock, with an additional $50 million of deferred consideration due at the end of 2026 in cash or stock at Legence’s discretion. The deal expands Legence’s footprint and capabilities in mechanical, plumbing, and process system solutions, supports its stated growth strategy in mission-critical building services, and modestly increases financial leverage through new term debt while introducing further equity-based consideration for the seller.

The most recent analyst rating on (LGN) stock is a Buy with a $50.00 price target. To see the full list of analyst forecasts on Legence Corp. Class A stock, see the LGN Stock Forecast page.