Financial Analysis: LGI Homes (LGIH) & Its Competitors

LGI Homes (NASDAQ: LGIH) is one of 24 public companies in the “Homebuilding” industry, but how does it compare to its peers? We will compare LGI Homes to related businesses based on the strength of its institutional ownership, earnings, profitability, risk, valuation, analyst recommendations and dividends.

Profitability

This table compares LGI Homes and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LGI Homes 9.26% 25.51% 11.10%
LGI Homes Competitors 9.74% 14.79% 7.94%

Volatility and Risk

LGI Homes has a beta of 0.26, indicating that its stock price is 74% less volatile than the S&P 500. Comparatively, LGI Homes’ peers have a beta of 1.52, indicating that their average stock price is 52% more volatile than the S&P 500.

Insider & Institutional Ownership

92.0% of LGI Homes shares are owned by institutional investors. Comparatively, 79.0% of shares of all “Homebuilding” companies are owned by institutional investors. 13.6% of LGI Homes shares are owned by insiders. Comparatively, 13.1% of shares of all “Homebuilding” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for LGI Homes and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LGI Homes 0 4 2 0 2.33
LGI Homes Competitors 282 1680 1925 38 2.44

LGI Homes presently has a consensus price target of $53.00, suggesting a potential downside of 24.12%. As a group, “Homebuilding” companies have a potential upside of 0.18%. Given LGI Homes’ peers stronger consensus rating and higher probable upside, analysts clearly believe LGI Homes has less favorable growth aspects than its peers.

Valuation and Earnings

This table compares LGI Homes and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
LGI Homes $838.32 million $75.03 million 16.17
LGI Homes Competitors $3.83 billion $231.12 million 485.43

LGI Homes’ peers have higher revenue and earnings than LGI Homes. LGI Homes is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

LGI Homes peers beat LGI Homes on 9 of the 13 factors compared.

LGI Homes Company Profile

LGI Homes, Inc. is a homebuilder and land developer. The Company is engaged in the design, construction, marketing and sale of new homes in markets in Texas, Arizona, Florida, Georgia, New Mexico, South Carolina, North Carolina, Colorado, Washington and Tennessee. The Company operates through five segments: the Texas division, the Southwest division, the Southeast division, the Florida division and the Northwest division. The Texas division includes homebuilding operations in Houston, Dallas/Fort Worth, San Antonio and Austin locations. The Southwest division includes homebuilding operations in Phoenix, Tucson, Albuquerque, Denver and Colorado Springs locations. The Southeast division includes homebuilding operations in Atlanta, Charlotte and Nashville locations. The Florida division includes homebuilding operations in Tampa, Orlando, Fort Myers and Jacksonville locations. The Northwest division includes homebuilding operations in Seattle location.

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