📊 LGIH Key Takeaways
Is LGI Homes, Inc. (LGIH) a Good Investment?
LGI Homes is experiencing severe operational deterioration with revenue declining 22.6% YoY, net income collapsing 63% YoY, and negative free cash flow of -$56.2M. The company operates at a loss (-$582K operating income) with razor-thin 0.7% net margins while burning cash, leaving insufficient liquidity to service $1.7B debt burden in a weakening housing market.
Fundamentals have weakened materially: revenue fell 22.6% YoY and net income declined 63%, compressing margins and returns. Cash generation is negative and leverage is meaningful relative to cash, raising sensitivity to further demand or rate pressure. That said, the company remains profitable and carries a sizable equity base, providing runway to stabilize through the cycle.
LGI Homes, Inc. Key Strengths (LGIH)
- 66.2% gross margin indicates pricing power or cost efficiency at production level
- Moderate leverage at 0.79x debt-to-equity provides some balance sheet cushion
- $2.1B equity base offers capital reserve against further deterioration
- Remains profitable with positive net income and operating income
- Moderate leverage (0.79x D/E) supported by $2.10B equity base
- Large asset base to support operations and potential cycle recovery
LGIH Stock Risks: LGI Homes, Inc. Investment Risks
- Negative free cash flow of -$56.2M with only $60.9M cash creates liquidity crisis risk
- Operating loss and negative 17.6% FCF margin indicate unsustainable business trajectory
- 22.6% YoY revenue decline signals severe market share loss or housing demand collapse in operative builder sector
- $1.7B debt load becomes dangerous with negative operating cash flow and deteriorating profitability
- Sharp revenue and EPS declines indicate demand softness and margin pressure
- Negative operating and free cash flow with low cash relative to debt
- Exposure to higher interest rates could further compress margins and liquidity
Key Metrics to Watch
- Operating cash flow trend - must return positive to validate business sustainability
- Housing starts and order backlog - indicators of market recovery in operative builder segment
- Cash balance and debt covenant compliance - critical given cash burn rate
- Gross margin sustainability - monitor if further deterioration occurs below 66%
- Gross margin trajectory
- Operating cash flow and inventory working capital
LGI Homes, Inc. (LGIH) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
LGIH Profit Margin, ROE & Profitability Analysis
LGIH vs Market Sector: How LGI Homes, Inc. Compares
How LGI Homes, Inc. compares to Market sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is LGI Homes, Inc. Stock Overvalued? LGIH Valuation Analysis 2026
Based on fundamental analysis, LGI Homes, Inc. shows some fundamental concerns relative to the Market sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
LGI Homes, Inc. Balance Sheet: LGIH Debt, Cash & Liquidity
LGIH Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: LGI Homes, Inc.'s revenue has declined by 23% over the 5-year period, indicating business contraction. The most recent EPS of $8.42 reflects profitable operations.
LGIH Revenue Growth, EPS Growth & YoY Performance
LGIH Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $319.7M | $2.2M | $0.09 |
| Q3 2025 | $396.6M | $4.0M | $0.85 |
| Q2 2025 | $483.5M | $4.0M | $1.36 |
| Q1 2025 | $351.4M | $4.0M | $0.17 |
| Q3 2024 | $617.5M | $17.1M | $2.84 |
| Q2 2024 | $602.5M | $17.1M | $2.25 |
| Q1 2024 | $390.9M | $17.1M | $0.72 |
| Q3 2023 | $547.1M | $27.0M | $2.84 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
LGI Homes, Inc. Dividends, Buybacks & Capital Allocation
LGIH SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for LGI Homes, Inc. (CIK: 0001580670)
📋 Recent SEC Filings
❓ Frequently Asked Questions about LGIH
What is the AI rating for LGIH?
LGI Homes, Inc. (LGIH) has a Combined AI Grade of C from Claude (C) and ChatGPT (B) with 71% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are LGIH's key strengths?
Claude: 66.2% gross margin indicates pricing power or cost efficiency at production level. Moderate leverage at 0.79x debt-to-equity provides some balance sheet cushion. ChatGPT: Remains profitable with positive net income and operating income. Moderate leverage (0.79x D/E) supported by $2.10B equity base.
What are the risks of investing in LGIH?
Claude: Negative free cash flow of -$56.2M with only $60.9M cash creates liquidity crisis risk. Operating loss and negative 17.6% FCF margin indicate unsustainable business trajectory. ChatGPT: Sharp revenue and EPS declines indicate demand softness and margin pressure. Negative operating and free cash flow with low cash relative to debt.
What is LGIH's revenue and growth?
LGI Homes, Inc. reported revenue of $319.7M.
Does LGIH pay dividends?
LGI Homes, Inc. does not currently pay dividends.
Where can I find LGIH SEC filings?
Official SEC filings for LGI Homes, Inc. (CIK: 0001580670) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is LGIH's EPS?
LGI Homes, Inc. has a diluted EPS of $0.09.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is LGIH's fundamental grade?
Based on our AI fundamental analysis in May 2026, LGI Homes, Inc. has a C grade with 71% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is LGIH stock overvalued or undervalued?
Valuation metrics for LGIH: ROE of 0.1% (sector avg: 15%), net margin of 0.7% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
What is LGIH's AI grade for 2026?
Our dual AI analysis gives LGI Homes, Inc. a combined C grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is LGIH's free cash flow?
LGI Homes, Inc.'s operating cash flow is $-55.5M, with capital expenditures of $696.0K. FCF margin is -17.6%.
How does LGIH compare to other Market stocks?
Vs Default sector averages: Net margin 0.7% (avg: 12%), ROE 0.1% (avg: 15%), current ratio N/A (avg: 1.8).