LGI Homes says Q2 hit by economic uncertainty, withdraws full-year guidance
Overview
LGI Homes Q2 revenue at $483.5 mln, delivering 1,323 homes
Gross margin improved to 22.9%, adjusted gross margin at 25.5%
Co withdraws full-year guidance due to market uncertainty
Outlook
LGI Homes expects Q3 home closings between 1,100 and 1,300
Company sees average Q3 home sales price between $360,000 and $365,000, vs $365,446 in Q2
LGI Homes anticipates Q3 gross margin between 21.5% and 22.5%
Company withdraws full-year 2025 guidance due to market uncertainty
Result Drivers
COST SAVINGS - LGI Homes attributes increased gross margin to ongoing cost savings and efficiency improvements
AFFORDABILITY CHALLENGES - Affordability issues tied to interest rates and economic uncertainty led to a decline in net orders
OPTIMISM FOR Q3 - Recent trends in late June and July suggest a better sales environment for the third quarter
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Home Sales Revenue | $483.50 mln | ||
Q2 Net Income | $31.50 mln | ||
Q2 Gross Margin | 22.9% | ||
Q2 Adjusted Gross Margin | 25.5% | ||
Q2 Pretax Profit | $42 mln |
Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 4 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the homebuilding peer group is "buy."
Wall Street's median 12-month price target for LGI Homes Inc is $89.00, about 38.6% above its August 4 closing price of $54.64
The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 8 three months ago
Press Release:
