LGI Homes (NASDAQ:LGIH) Trading 9.1% Higher After Earnings Beat

Key Points

• LGI Homes shares rose by 9.1% after the company reported quarterly earnings of $1.36 EPS, surpassing expectations by $0.02, despite a 19.8% decrease in revenue year-over-year.
• Analysts have diverse views on LGI Homes, with JMP Securities setting a target price of $140, while JPMorgan Chase downgraded its target to $47, reflecting varying confidence among investors.
• Institutional investors significantly increased their stakes in LGI Homes, with MassMutual Private Wealth increasing its position by 453.1% during the second quarter, highlighting growing institutional interest.

LGI Homes, Inc. (NASDAQ:LGIH - Get Free Report)'s share price shot up 9.1% during mid-day trading on Tuesday following a stronger than expected earnings report. The company traded as high as $59.42 and last traded at $59.59. 90,941 shares traded hands during mid-day trading, a decline of 71% from the average session volume of 319,039 shares. The stock had previously closed at $54.64.

The financial services provider reported $1.36 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.21 by $0.15. The business had revenue of $483.49 million during the quarter, compared to the consensus estimate of $546.96 million. LGI Homes had a net margin of 7.63% and a return on equity of 8.00%. The firm's quarterly revenue was down 19.8% compared to the same quarter last year. During the same quarter last year, the firm earned $2.48 earnings per share.

Analysts Set New Price Targets

Several brokerages have issued reports on LGIH. JPMorgan Chase & Co. decreased their price objective on shares of LGI Homes from $52.00 to $47.00 and set an "underweight" rating for the company in a research note on Wednesday, July 9th. JMP Securities decreased their price target on shares of LGI Homes from $140.00 to $75.00 and set a "market outperform" rating for the company in a research note on Thursday. Wedbush reaffirmed a "neutral" rating and set a $93.00 price target on shares of LGI Homes in a research note on Monday, July 7th. Finally, Citigroup reaffirmed an "outperform" rating on shares of LGI Homes in a research note on Thursday. One equities research analyst has rated the stock with a sell rating, two have issued a hold rating and two have issued a buy rating to the stock. According to MarketBeat, the company has an average rating of "Hold" and an average target price of $71.67.

Hedge Funds Weigh In On LGI Homes

Several institutional investors have recently bought and sold shares of the business. Dimensional Fund Advisors LP increased its holdings in LGI Homes by 0.4% during the fourth quarter. Dimensional Fund Advisors LP now owns 1,504,384 shares of the financial services provider's stock valued at $134,491,000 after buying an additional 6,706 shares during the period. Wasatch Advisors LP increased its holdings in LGI Homes by 2.7% during the fourth quarter. Wasatch Advisors LP now owns 1,395,710 shares of the financial services provider's stock valued at $124,776,000 after buying an additional 36,608 shares during the period. Khrom Capital Management LLC increased its holdings in LGI Homes by 19.4% during the fourth quarter. Khrom Capital Management LLC now owns 1,095,801 shares of the financial services provider's stock valued at $97,965,000 after buying an additional 177,698 shares during the period. CDAM UK Ltd increased its holdings in LGI Homes by 4.4% during the first quarter. CDAM UK Ltd now owns 766,210 shares of the financial services provider's stock valued at $50,930,000 after buying an additional 32,267 shares during the period. Finally, Charles Schwab Investment Management Inc. grew its holdings in LGI Homes by 5.0% in the first quarter. Charles Schwab Investment Management Inc. now owns 395,810 shares of the financial services provider's stock worth $26,309,000 after purchasing an additional 19,017 shares during the last quarter. 84.89% of the stock is owned by hedge funds and other institutional investors.

LGI Homes Stock Down 0.2%

The company's fifty day simple moving average is $53.06 and its 200-day simple moving average is $63.03. The company has a debt-to-equity ratio of 0.85, a current ratio of 18.18 and a quick ratio of 0.54. The firm has a market capitalization of $1.32 billion, a PE ratio of 8.61 and a beta of 1.69.

LGI Homes Company Profile

LGI Homes, Inc designs, constructs, and sells homes. It offers entry-level homes, such as attached and detached homes, and active adult homes under the LGI Homes brand name; and luxury series homes under the Terrata Homes brand name. The company also engages in the wholesale business, which include building and selling homes to large institutions looking to acquire single-family rental properties.