LGI Homes Inc. Common Stock (LGIH)

FairStock Score: 36/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a value investor, I start with the business. LGI Homes builds and sells new homes, mostly entry-level, with a wholesale component. That is a cyclical, capital-intensive, commodity-like trade with no obvious durable moat. The recent record is mixed at best. In fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $516.0M, up from $488.2M in fiscal Q2 2025, the quarter ended 2025-06-30, but net income fell to $27.0M from $31.5M, and diluted EPS declined to $1.16 from $1.36. Fiscal Q1 2026, ended 2026-03-31, was especially weak: $2.2M of net income on $319.7M of revenue. For fiscal 2025, ended 2025-12-31, revenue was $1.7B and net income $72.6M, down sharply from fiscal 2024, ended 2024-12-31, when revenue was $2.2B and net income $196.1M. So sales have not collapsed everywhere, but profitability has compressed badly. Financial health is not alarming, but returns are poor. FairStock shows D/E of 0.74, Altman Z-Score 2.36, Piotroski F-Score 8/9, trailing FCF of $131.0M and FCF yield of 12.4%. Yet ROE is 3.16% and ROCE 1.07%, which is not the signature of a high-quality compounder. At the 2026-10-13 close of $45.29, FairStock's P/B is 0.49, P/E is 15.89, Graham Number is $76.70, implying a 40.95% margin of safety. But EV/EBITDA is 35.13, and beta is 1.84. This looks like a cheap-on-assets, weak-on-earnings cyclical. I would demand a clearer turn in margins and returns before calling it a bargain.

In plain English: LGI Homes builds and sells new homes, mostly entry-level homes, in several U.S. states. Recent sales are not collapsing, but profits have dropped sharply, and the business earns low returns on the money it invests. The shares look inexpensive compared with the company's net assets and a conservative value estimate, but this is a cyclical business and the cheapness may reflect real risk.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer