49.85 USD
-0.03 (-0.06%)
We assign a fundamental rating of 3 out of 10 to LGIH. LGIH was compared to 60 industry peers in the Household Durables industry. LGIH may be in some trouble as it scores bad on both profitability and health. LGIH has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
- In the past year LGIH was profitable.
- In the past year LGIH has reported a negative cash flow from operations.
- Each year in the past 5 years LGIH has been profitable.
- The reported operating cash flow has been mixed in the past 5 years: LGIH reported negative operating cash flow in multiple years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 2.65%, LGIH is in line with its industry, outperforming 43.33% of the companies in the same industry.
- With a Return On Equity value of 5.15%, LGIH perfoms like the industry average, outperforming 43.33% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 2.10%, LGIH is doing worse than 68.33% of the companies in the same industry.
- LGIH had an Average Return On Invested Capital over the past 3 years of 6.70%. This is below the industry average of 9.70%.
- The 3 year average ROIC (6.70%) for LGIH is well above the current ROIC(2.10%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.65% | ||
| ROE | 5.15% | ||
| ROIC | 2.1% |
ROA(3y)7.17%
ROA(5y)11.5%
ROE(3y)13.41%
ROE(5y)19.89%
ROIC(3y)6.7%
ROIC(5y)11.06%
1.3 Margins
- LGIH has a Profit Margin of 5.98%. This is in the better half of the industry: LGIH outperforms 63.33% of its industry peers.
- In the last couple of years the Profit Margin of LGIH has declined.
- Looking at the Operating Margin, with a value of 5.99%, LGIH is in line with its industry, outperforming 41.67% of the companies in the same industry.
- LGIH's Operating Margin has declined in the last couple of years.
- LGIH has a Gross Margin of 22.19%. This is in the lower half of the industry: LGIH underperforms 70.00% of its industry peers.
- LGIH's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.99% | ||
| PM (TTM) | 5.98% | ||
| GM | 22.19% |
OM growth 3Y-18.77%
OM growth 5Y-4.91%
PM growth 3Y-14.19%
PM growth 5Y-1.74%
GM growth 3Y-3.35%
GM growth 5Y0.39%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), LGIH is destroying value.
- LGIH has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, LGIH has less shares outstanding
- Compared to 1 year ago, LGIH has a worse debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 2.68 indicates that LGIH is not a great score, but indicates only limited risk for bankruptcy at the moment.
- LGIH has a Altman-Z score (2.68) which is comparable to the rest of the industry.
- A Debt/Equity ratio of 0.85 indicates that LGIH is somewhat dependend on debt financing.
- LGIH has a Debt to Equity ratio of 0.85. This is in the lower half of the industry: LGIH underperforms 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.68 |
ROIC/WACC0.22
WACC9.55%
2.3 Liquidity
- LGIH has a Current Ratio of 21.56. This indicates that LGIH is financially healthy and has no problem in meeting its short term obligations.
- LGIH has a Current ratio of 21.56. This is amongst the best in the industry. LGIH outperforms 100.00% of its industry peers.
- LGIH has a Quick Ratio of 21.56. This is a bad value and indicates that LGIH is not financially healthy enough and could expect problems in meeting its short term obligations.
- LGIH has a worse Quick ratio (0.48) than 78.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 21.56 | ||
| Quick Ratio | 0.48 |
3. Growth
3.1 Past
- The earnings per share for LGIH have decreased strongly by -41.25% in the last year.
- LGIH shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.47% yearly.
- LGIH shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -20.62%.
- Measured over the past years, LGIH shows a small growth in Revenue. The Revenue has been growing by 3.68% on average per year.
EPS 1Y (TTM)-41.25%
EPS 3Y-21.62%
EPS 5Y3.47%
EPS Q2Q%-71.19%
Revenue 1Y (TTM)-20.62%
Revenue growth 3Y-10.28%
Revenue growth 5Y3.68%
Sales Q2Q%-39.15%
3.2 Future
- Based on estimates for the next years, LGIH will show a very negative growth in Earnings Per Share. The EPS will decrease by -13.79% on average per year.
- The Revenue is expected to grow by 6.85% on average over the next years.
EPS Next Y-58.91%
EPS Next 2Y-25.37%
EPS Next 3Y-13.79%
EPS Next 5YN/A
Revenue Next Year-22.83%
Revenue Next 2Y-4.33%
Revenue Next 3Y6.85%
Revenue Next 5YN/A
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 10.17, the valuation of LGIH can be described as reasonable.
- LGIH's Price/Earnings ratio is a bit cheaper when compared to the industry. LGIH is cheaper than 75.00% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 28.60, LGIH is valued rather cheaply.
- With a Price/Forward Earnings ratio of 10.78, the valuation of LGIH can be described as very reasonable.
- LGIH's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. LGIH is cheaper than 76.67% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of LGIH to the average of the S&P500 Index (25.83), we can say LGIH is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.17 | ||
| Fwd PE | 10.78 |
4.2 Price Multiples
- 76.67% of the companies in the same industry are cheaper than LGIH, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 25.7 |
4.3 Compensation for Growth
- A cheap valuation may be justified as LGIH's earnings are expected to decrease with -13.79% in the coming years.
PEG (NY)N/A
PEG (5Y)2.94
EPS Next 2Y-25.37%
EPS Next 3Y-13.79%
5. Dividend
5.1 Amount
- No dividends for LGIH!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
LGI HOMES INC / LGIH FAQ
What is the fundamental rating for LGIH stock?
ChartMill assigns a fundamental rating of 3 / 10 to LGIH.
What is the valuation status for LGIH stock?
ChartMill assigns a valuation rating of 4 / 10 to LGI HOMES INC (LGIH). This can be considered as Fairly Valued.
Can you provide the profitability details for LGI HOMES INC?
LGI HOMES INC (LGIH) has a profitability rating of 3 / 10.
What is the earnings growth outlook for LGI HOMES INC?
The Earnings per Share (EPS) of LGI HOMES INC (LGIH) is expected to decline by -58.91% in the next year.
How sustainable is the dividend of LGI HOMES INC (LGIH) stock?
The dividend rating of LGI HOMES INC (LGIH) is 0 / 10 and the dividend payout ratio is 0%.