Critical Analysis: LGI Homes (LGIH) versus Its Rivals
LGI Homes (NASDAQ: LGIH) is one of 23 publicly-traded companies in the “Homebuilding” industry, but how does it contrast to its competitors? We will compare LGI Homes to similar businesses based on the strength of its profitability, analyst recommendations, valuation, earnings, risk, institutional ownership and dividends.
Earnings and Valuation
This table compares LGI Homes and its competitors gross revenue, earnings per share and valuation.
|Gross Revenue||NetIncome||Price/Earnings Ratio|
|LGI Homes||$838.32 million||$75.03 million||14.69|
|LGI Homes Competitors||$3.82 billion||$228.40 million||506.93|
LGI Homes’ competitors have higher revenue and earnings than LGI Homes. LGI Homes is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.
Volatility and Risk
LGI Homes has a beta of 0.2, indicating that its share price is 80% less volatile than the S&P 500. Comparatively, LGI Homes’ competitors have a beta of 1.51, indicating that their average share price is 51% more volatile than the S&P 500.
Institutional and Insider Ownership
88.2% of LGI Homes shares are held by institutional investors. Comparatively, 78.4% of shares of all “Homebuilding” companies are held by institutional investors. 13.6% of LGI Homes shares are held by company insiders. Comparatively, 13.1% of shares of all “Homebuilding” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This table compares LGI Homes and its competitors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|LGI Homes Competitors||9.80%||14.64%||8.00%|
This is a summary of recent ratings and target prices for LGI Homes and its competitors, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|LGI Homes Competitors||264||1609||1872||36||2.44|
LGI Homes currently has a consensus price target of $53.00, indicating a potential downside of 16.47%. As a group, “Homebuilding” companies have a potential upside of 0.04%. Given LGI Homes’ competitors stronger consensus rating and higher probable upside, analysts clearly believe LGI Homes has less favorable growth aspects than its competitors.
LGI Homes competitors beat LGI Homes on 9 of the 13 factors compared.
About LGI Homes
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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