LGI Homes (NASDAQ:LGIH) Shares Gap Up Following Better-Than-Expected Earnings

Key Points

• Shares gapped up after LGI Homes reported quarterly EPS of $0.24 versus $0.11 expected, even though revenue of $319.74 million missed estimates and was down 9% year‑over‑year.
• Analyst sentiment is mixed — the stock has an average rating of “Hold” with a consensus target of $74.63, while some firms have raised targets and others maintain sell ratings.
• Insiders have been net sellers (22,451 shares sold in the past three months) while institutional investors own about 84.9% of the stock; LGI Homes has a market cap of ~$1.09 billion and a P/E of 15.00.

Shares of LGI Homes, Inc. (NASDAQ:LGIH - Get Free Report) gapped up prior to trading on Tuesday following a stronger than expected earnings report. The stock had previously closed at $45.32, but opened at $48.34. LGI Homes shares last traded at $47.0250, with a volume of 107,735 shares traded.

The financial services provider reported $0.24 EPS for the quarter, beating analysts' consensus estimates of $0.11 by $0.13. The firm had revenue of $319.74 million during the quarter, compared to analysts' expectations of $336.60 million. LGI Homes had a return on equity of 4.08% and a net margin of 4.25%.The company's revenue for the quarter was down 9.0% compared to the same quarter last year. During the same quarter last year, the firm posted $0.17 earnings per share.

Wall Street Analyst Weigh In

Several research analysts recently issued reports on LGIH shares. Citizens Jmp lifted their target price on LGI Homes from $85.00 to $95.00 and gave the company a "market outperform" rating in a research report on Wednesday, January 7th. Citigroup reaffirmed an "outperform" rating on shares of LGI Homes in a research report on Wednesday, January 7th. Zacks Research raised LGI Homes from a "strong sell" rating to a "hold" rating in a research report on Tuesday, April 21st. Finally, Weiss Ratings reaffirmed a "sell (d)" rating on shares of LGI Homes in a research report on Monday, December 29th. Two research analysts have rated the stock with a Buy rating, two have issued a Hold rating and two have issued a Sell rating to the company. According to data from MarketBeat.com, the stock has an average rating of "Hold" and a consensus target price of $74.63.

Insider Buying and Selling

In related news, COO Michael Larry Snider sold 6,000 shares of LGI Homes stock in a transaction on Monday, March 9th. The stock was sold at an average price of $42.04, for a total transaction of $252,240.00. Following the sale, the chief operating officer directly owned 175,556 shares in the company, valued at approximately $7,380,374.24. This trade represents a 3.30% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, General Counsel Scott James Garber sold 1,353 shares of LGI Homes stock in a transaction on Monday, March 9th. The stock was sold at an average price of $42.04, for a total value of $56,880.12. Following the sale, the general counsel owned 21,716 shares in the company, valued at $912,940.64. This trade represents a 5.87% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last three months, insiders have sold 22,451 shares of company stock worth $943,840. 12.60% of the stock is owned by company insiders.

Institutional Trading of LGI Homes

A number of hedge funds have recently bought and sold shares of the business. Wasatch Advisors LP lifted its holdings in LGI Homes by 3.4% during the second quarter. Wasatch Advisors LP now owns 1,467,855 shares of the financial services provider's stock worth $75,624,000 after acquiring an additional 48,795 shares during the period. River Road Asset Management LLC lifted its holdings in LGI Homes by 2.0% during the fourth quarter. River Road Asset Management LLC now owns 931,391 shares of the financial services provider's stock worth $40,013,000 after acquiring an additional 18,682 shares during the period. CDAM UK Ltd lifted its holdings in LGI Homes by 15.4% during the fourth quarter. CDAM UK Ltd now owns 743,153 shares of the financial services provider's stock worth $31,926,000 after acquiring an additional 99,090 shares during the period. Charles Schwab Investment Management Inc. raised its stake in shares of LGI Homes by 6.9% in the fourth quarter. Charles Schwab Investment Management Inc. now owns 458,601 shares of the financial services provider's stock valued at $19,701,000 after buying an additional 29,542 shares during the period. Finally, Tributary Capital Management LLC raised its stake in shares of LGI Homes by 93.1% in the third quarter. Tributary Capital Management LLC now owns 386,072 shares of the financial services provider's stock valued at $19,964,000 after buying an additional 186,159 shares during the period. 84.89% of the stock is currently owned by institutional investors.

LGI Homes Stock Performance

The stock has a market capitalization of $1.09 billion, a P/E ratio of 15.00 and a beta of 1.86. The company has a 50 day simple moving average of $43.51 and a 200-day simple moving average of $46.93. The company has a debt-to-equity ratio of 0.79, a current ratio of 20.98 and a quick ratio of 0.76.

LGI Homes Company Profile

LGI Homes, Inc NASDAQ: LGIH is a residential homebuilder primarily focused on serving first-time and first-time move-up homebuyers in the United States. The company specializes in the acquisition, development and sale of affordable single-family homes and townhomes. LGI Homes operates through an integrated model that encompasses land sourcing, lot development, home construction, and post-closing customer support including warranty services.

In addition to its core homebuilding activities, LGI Homes offers ancillary services to streamline the homebuying process for its customers.

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