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what it is
LGI Homes buys land, builds houses, and sells them mostly to first-time buyers across 21 states.
how it gets paid
Last year Lgi Homes made $1.7B in revenue. entry-level homes was the main engine at $1.19B, or 70% of sales.
why growth slowed
Revenue fell 22.6% last year. Gross profit margins declined, as the company used more financing incentives, offered discounts on aged units, and increased the mix of bulk transactions to maintain.
what just happened
LGI's latest quarter showed $0.75 EPS, well below the $1.32 analysts expected.
At a glance
B balance sheet — gets the job done, barely
55/100 earnings predictability — expect surprises
16.1x trailing p/e — the market's not buying it — or you found a deal
7.5% return on capital — nothing to write home about
xvary composite: 38/100 — weak
What they do
LGI Homes buys land, builds houses, and sells them mostly to first-time buyers across 21 states.
LGI wins by selling the dream to buyers priced out elsewhere. It has built over 75,000 homes since 2003 and now sells in 36 cities across 21 states, which gives you scale without needing luxury-buyer optimism. Its focus on entry-level buyers is the edge: affordable homes are easier to move than high-end houses when mortgage rates squeeze budgets.
How they make money
$1.7B
annual revenue · their business grew -22.6% last year
entry-level homes
$1.19B
24.0%
move-up homes
$0.22B
20.0%
active adult homes
$0.12B
18.0%
luxury homes
$0.10B
15.0%
other housing revenue
$0.07B
10.0%
The products that matter
core business
new home sales
$1.7B revenue base
Most of what matters is simple: build homes, sell homes, manage margins. With revenue down 22.6% from last year, volume and pricing discipline matter more than branding copy.
whole story driver
named brand on the page
Tarrata Homes
limited disclosed detail here
The source page names Tarrata Homes but gives no separate sales, margin, or growth numbers. That's a data point in itself. You should treat it as a brand marker, not a quantified thesis.
thin disclosure
distribution footprint
36 cities · 21 states
broad reach for a $1B market cap
Geography helps spread local housing risk, but it does not erase the national housing cycle. If demand softens broadly, a wider map just means more markets to manage carefully.
reach, not immunity
Key numbers
14.0%
operating margin
Operating margin → percent left after running the business → so what: LGI still earns real money on each home, but there is not much room for deeper discounting.
$5.20
2027 eps est
EPS estimate → profit per share → so what: the long-range profit view is modest, which keeps the stock tied to execution, not hype.
7.5%
return on capital
Return on capital → profit earned on the money put into the business → so what: LGI is profitable, but this is not elite efficiency.
16.1x
trailing p/e
P/E → how many dollars investors pay for one dollar of earnings → so what: you are not paying a bubble price, but you are paying for a housing rebound.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 3 — safer than 50% of stocks
- price stability 25 / 100
- net profit margin 9.0% — keeps 9 cents of every dollar in revenue
- return on equity 11% — $0.11 profit for every $1 investors have put in
B — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in LGIH 3 years ago → it's now worth $4,840.
The index would have given you $14,540.
source: institutional data · total return
What just happened
missed estimates
LGI's latest quarter showed $0.75 EPS, well below the $1.32 analysts expected.
Fourth-quarter revenue was about $474 million on exactly 1,301 closings at a roughly flat average selling price versus last year. Margins fell because LGI used more financing incentives and discounts on older homes.
$474M
revenue
$0.75
eps
22.3%
gross margin
the number that mattered
The 43.18% EPS miss matters most because it says weaker pricing, not just lower volume, is hurting the model.
-
lgi homes posted weak fourth-quarter results.
-
revenue fell to about $474 million, as the company achieved precisely 1,301 closings at an average selling price of about $364,000.
-
this was roughly flat versus the year-prior period.
-
gross profit margins declined, as the company used more financing incentives, offered discounts on aged units, and increased the mix of bulk transactions to maintain sales.
-
additionally, the company recorded a $6.7 million impairment charge tied to four underperforming locations.
source: company earnings report, 2026
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What could go wrong
LGI's risk stack is not abstract. You already see it in the numbers: falling revenue, only middling returns, and a stock that has badly trailed the market.
med
the sales base keeps shrinking
Revenue dropped 22.6% to $1.7B. For a builder, lower volume does not just hit growth. It also pressures margins and investor patience.
If that slide continues, the path to the $3B FY2029 revenue estimate starts to look more like a wish than a model.
med
returns are fine, not forgiving
Return on capital is 7.5%. Return on equity is 11%. Net margin is 9.0%. Those numbers say the business works, but there is not much excess cushion if pricing or costs move against them.
In human-speak: this is not a business with giant margins to hide mistakes.
med
the market has stopped trusting the story
Three-year total return turned $10,000 into $4,840, while the index reached $14,540. Institutions also skewed to sellers in 4Q2025, 93 versus 65 buyers.
Weak operating numbers are one problem. Weak sponsorship on top of that is how cheap stocks stay cheap.
What would change our mind: sales stabilizing, returns moving above the current 7.5% return on capital, and institutional flow turning less one-sided. Until then, the discount makes sense.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
revenue direction is the whole story
After a 22.6% drop to $1.7B, the first question is not upside. It is whether the business stops shrinking.
calendar
next earnings report
You want one thing first: evidence that the sales slide is easing. Without that, every other discussion is early.
trend
institutional flow
65 buyers versus 93 sellers in 4Q2025 is a warning, not a verdict. A flip toward accumulation would matter.
risk
the gap between current sales and long-range estimates
$3B FY2029 revenue sits far above today's $1.7B base. If that climb starts slipping, target math gets softer fast.
Analyst rankings
earnings predictability
55 / 100
in human-speak, analysts do not see a smooth earnings story here.
balance sheet grade
B
Solid enough to operate. Not strong enough to ignore execution risk.
xvary composite
38 / 100
The market is not paying up for this setup, and the data does not force it to.
source: institutional data
Institutional activity
65 buyers vs. 93 sellers in 4q2025. total institutional holdings: 20.1M shares.
source: institutional data
Price targets
3-5 year target range
$33
$97
$50
current price
$65
target midpoint · +30% from current · 3-5yr high: $120 (+140% · 24% ann'l return)
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