📊 LGN Key Takeaways
Is Legence Corp. (LGN) a Good Investment?
Legence demonstrates conflicting fundamentals: strong 21.5% revenue growth and solid free cash flow generation are overshadowed by a catastrophic 170.7% decline in net income, indicating severe operational deterioration. Extremely thin margins (1.6% net, 2.2% operating) combined with high leverage (2.0x D/E) and minimal returns (ROE 3.2%, ROA 0.5%) create an unsustainable financial structure with minimal margin for error.
Legence delivers strong top-line growth and solid free cash flow despite reporting a GAAP net loss, indicating decent cash conversion from operations. Liquidity appears adequate, but profitability is thin and leverage is elevated with unclear interest coverage. Sustained margin expansion and clearer debt service capacity are needed to justify a more constructive view.
Legence Corp. Key Strengths (LGN)
- Strong revenue growth of 21.5% YoY demonstrates sustained market demand and top-line expansion
- Robust free cash flow generation of $102.3M with 9.9% FCF margin shows underlying cash generation capability despite margin weakness
- Adequate liquidity with $244.6M cash position and 1.30x current ratio provides near-term operational buffer
- Robust 21.5% YoY revenue growth
- Positive operating cash flow and 8.6% FCF margin
- Solid liquidity with 1.55–1.57x quick/current ratios
LGN Stock Risks: Legence Corp. Investment Risks
- Net income collapsed 170.7% YoY despite revenue growth, signaling severe profitability deterioration or one-time charges masking operational issues
- Critically thin operating margins (2.2%) and net margins (1.6%) provide almost no buffer for cost pressures, pricing pressure, or operational challenges
- High leverage ratio of 2.0x Debt/Equity with $1.0B long-term debt against only $505.4M equity base severely constrains financial flexibility and increases default risk
- Sustained GAAP losses and thin 2.4% operating margin
- High leverage (2.10x D/E) and unclear interest coverage
- Uncertain conversion of growth into durable profitability
Key Metrics to Watch
- Net income trend and drivers of 170.7% YoY decline - understand if deterioration is structural or one-time
- Operating and net margin recovery trajectory - critical to long-term viability
- Debt/Equity ratio and debt service coverage - monitor leverage sustainability given thin margins
- Operating margin
- Interest coverage
Legence Corp. (LGN) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Legence Corp. presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
LGN Profit Margin, ROE & Profitability Analysis
LGN vs Industrial Sector: How Legence Corp. Compares
How Legence Corp. compares to Industrial sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Legence Corp. Stock Overvalued? LGN Valuation Analysis 2026
Based on fundamental analysis, Legence Corp. shows some fundamental concerns relative to the Industrial 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.
Legence Corp. Balance Sheet: LGN Debt, Cash & Liquidity
LGN Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Legence Corp.'s revenue has remained relatively flat over the 5-year period, with a 0% decline. The most recent EPS of $-0.57 indicates the company is currently unprofitable.
LGN Revenue Growth, EPS Growth & YoY Performance
LGN Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $506.0M | $16.1M | $0.13 |
| Q3 2025 | $560.8M | -$576.0K | $-0.02 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Legence Corp. Dividends, Buybacks & Capital Allocation
LGN SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Legence Corp. (CIK: 0002052568)
📋 Recent SEC Filings
❓ Frequently Asked Questions about LGN
What is the AI rating for LGN?
Legence Corp. (LGN) has a Combined AI Grade of C from Claude (C) and ChatGPT (B) with 68% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are LGN's key strengths?
Claude: Strong revenue growth of 21.5% YoY demonstrates sustained market demand and top-line expansion. Robust free cash flow generation of $102.3M with 9.9% FCF margin shows underlying cash generation capability despite margin weakness. ChatGPT: Robust 21.5% YoY revenue growth. Positive operating cash flow and 8.6% FCF margin.
What are the risks of investing in LGN?
Claude: Net income collapsed 170.7% YoY despite revenue growth, signaling severe profitability deterioration or one-time charges masking operational issues. Critically thin operating margins (2.2%) and net margins (1.6%) provide almost no buffer for cost pressures, pricing pressure, or operational challenges. ChatGPT: Sustained GAAP losses and thin 2.4% operating margin. High leverage (2.10x D/E) and unclear interest coverage.
What is LGN's revenue and growth?
Legence Corp. reported revenue of $1.0B.
Does LGN pay dividends?
Legence Corp. does not currently pay dividends.
Where can I find LGN SEC filings?
Official SEC filings for Legence Corp. (CIK: 0002052568) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is LGN's EPS?
Legence Corp. has a diluted EPS of $0.13.
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 LGN's fundamental grade?
Based on our AI fundamental analysis in May 2026, Legence Corp. has a C grade with 68% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is LGN stock overvalued or undervalued?
Valuation metrics for LGN: ROE of 3.2% (sector avg: 15%), net margin of 1.6% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
What is LGN's AI grade for 2026?
Our dual AI analysis gives Legence Corp. a combined C grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is LGN's free cash flow?
Legence Corp.'s operating cash flow is $120.1M, with capital expenditures of $17.8M. FCF margin is 9.9%.
How does LGN compare to other Industrial stocks?
Vs Industrial sector averages: Net margin 1.6% (avg: 10%), ROE 3.2% (avg: 15%), current ratio 1.30 (avg: 1.8).
Is Legence Corp. carrying too much debt?
LGN has a debt-to-equity ratio of 2.00x, which is above the Industrial sector average of 0.7x. However, the current ratio of 1.30 suggests adequate short-term liquidity.