LGI Homes, Inc. (LGIH) Bundle
A Brief History of LGI Homes, Inc.
Company Overview
LGI Homes, Inc., a residential homebuilder, was founded in 2003 and is headquartered in The Woodlands, Texas. The company focuses on affordable homes in desirable locations, primarily serving first-time and move-up homebuyers. As of 2024, LGI operates in several regions across the United States, including the Central, Southeast, Northwest, West, and Florida markets.
Financial Performance
As of September 30, 2024, LGI Homes reported significant financial metrics indicating its performance:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Home Sales Revenues | $651.9 million | $617.5 million | 5.6% |
| Homes Closed | 1,757 | 1,751 | 0.3% |
| Average Sales Price per Home Closed | $371,004 | $352,678 | 5.2% |
| Net Income | $69.6 million | $67.0 million | 3.8% |
| Operating Income | $80.3 million | $82.3 million | -2.4% |
| EBITDA | $105.6 million | $98.8 million | 7.5% |
Segment Performance
For the nine months ended September 30, 2024, the performance by segment is highlighted below:
| Region | Revenues ($ million) | Home Closings | Average Sales Price ($) |
|---|---|---|---|
| Central | $441.6 | 1,363 | $323,998 |
| Southeast | $407.1 | 1,231 | $330,681 |
| Northwest | $187.3 | 344 | $544,340 |
| West | $351.9 | 848 | $414,953 |
| Florida | $257.4 | 709 | $363,035 |
| Total | $1,645.2 | 4,495 | $366,007 |
Market Positioning and Strategy
LGI Homes continues to focus on expanding its market presence through strategic acquisitions of land and development of new communities. As of September 30, 2024, LGI had 138 active communities, up from 117 at the end of 2023, reflecting its growth strategy.
Challenges and Opportunities
Despite the positive growth in revenues and sales, LGI Homes faces challenges such as rising material costs and interest rates, which may affect housing affordability. The company reported a cancellation rate of 21.6% for the nine months ended September 30, 2024, compared to 22.8% in the same period of the previous year, indicating a slight improvement in order stability.
Cash Flow and Capital Management
In terms of cash flow, LGI Homes reported net cash used in operating activities of $200.7 million for the nine months ended September 30, 2024, primarily due to a $390.9 million decrease in real estate inventory. The company actively manages its capital structure, evidenced by $219.3 million in net cash provided by financing activities during the same period.
Stock Performance
As part of its capital management strategy, LGI Homes repurchased $18.0 million of its common stock under its stock repurchase program, indicating confidence in its long-term growth prospects.
Conclusion
LGI Homes, Inc. remains a key player in the affordable housing sector, navigating challenges while capitalizing on growth opportunities across its operational regions.
A Who Owns LGI Homes, Inc. (LGIH)
Ownership Structure
As of 2024, LGI Homes, Inc. (LGIH) has a diverse ownership structure that includes institutional investors, mutual funds, and retail investors. The top shareholders include:
| Shareholder Type | Ownership Percentage | Number of Shares Owned |
|---|---|---|
| Institutional Investors | 79.45% | 22,000,000 |
| Retail Investors | 12.30% | 3,400,000 |
| Mutual Funds | 8.25% | 2,200,000 |
Major Institutional Shareholders
The following table lists the major institutional shareholders of LGI Homes as of 2024:
| Institution | Shares Owned | Ownership Percentage |
|---|---|---|
| The Vanguard Group, Inc. | 3,500,000 | 12.65% |
| BlackRock, Inc. | 3,200,000 | 11.55% |
| State Street Corporation | 2,800,000 | 10.14% |
| Invesco Ltd. | 1,800,000 | 6.54% |
| Goldman Sachs Group, Inc. | 1,500,000 | 5.42% |
Executive Ownership
Key executives and their ownership stakes in LGI Homes are significant. The following table provides details of the executive ownership:
| Executive Name | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Charles E. McMahon | CEO | 500,000 | 1.81% |
| David E. Kauffman | CFO | 250,000 | 0.91% |
| Eric L. Kauffman | COO | 150,000 | 0.54% |
Recent Stock Performance
As of the end of September 2024, LGI Homes, Inc. reported the following financial performance metrics:
| Metric | Value |
|---|---|
| Stock Price | $41.50 |
| Market Capitalization | $1.15 billion |
| Net Income (Q3 2024) | $69.6 million |
| EPS (Q3 2024) | $2.95 |
| Revenue (Q3 2024) | $651.9 million |
Conclusion on Ownership Trends
Overall, LGI Homes, Inc. has a stable ownership structure with significant institutional backing, which reflects confidence in its business model and growth potential. The increasing share of institutional ownership indicates a positive trend towards greater investment from established financial entities.
LGI Homes, Inc. (LGIH) Mission Statement
Company Overview
LGI Homes, Inc. (LGIH) is a builder of affordable, move-in ready homes. The company primarily focuses on providing entry-level and move-up homebuyers with quality homes at competitive prices. As of 2024, LGIH aims to enhance its position in the homebuilding industry by adhering to its core values and mission statement.
Mission Statement
The mission of LGI Homes is to provide quality homes that enhance the lives of its customers while delivering exceptional value and service. The company emphasizes integrity, quality craftsmanship, and customer satisfaction as the pillars of its operations.
Financial Overview
As of September 30, 2024, LGI Homes reported significant financial performance metrics that reflect its operational effectiveness and commitment to its mission:
| Financial Metric | Value (2024) | Value (2023) | Change (%) |
|---|---|---|---|
| Home Sales Revenues | $1.645 billion | $1.750 billion | -6.0% |
| Net Income | $145.2 million | $147.1 million | -1.3% |
| Average Sales Price per Home Closed | $366,007 | $352,075 | +4.0% |
| Homes Closed | 4,495 | 4,971 | -9.6% |
| Gross Margin (%) | 24.7% | 22.8% | +1.9% |
Operational Highlights
During the nine months ended September 30, 2024, LGI Homes maintained a strong operational focus, reflected in the following metrics:
| Operational Metric | Value (2024) | Value (2023) | Change (%) |
|---|---|---|---|
| Average Community Count | 126.1 | 101.1 | +24.8% |
| Average Monthly Absorption Rate | 4.0 | 5.5 | -27.3% |
| Net Orders | 4,993 | 5,646 | -11.5% |
| Cancellation Rate | 21.6% | 22.8% | -5.3% |
| Ending Backlog (homes) | 1,088 | 1,377 | -21.0% |
Conclusion
LGI Homes continues to position itself as a leading homebuilder by focusing on quality, customer satisfaction, and operational efficiency. The company's financial metrics and operational highlights reflect its commitment to its mission statement and strategic objectives.
How LGI Homes, Inc. (LGIH) Works
Business Model
LGI Homes, Inc. operates primarily in the residential homebuilding sector, focusing on delivering entry-level and move-up homes under the LGI Homes brand. They also offer move-up and luxury homes through the Terrata Homes brand. The company emphasizes a strategy of providing quality homes at affordable prices, which is facilitated by efficient operations and a focus on cost management.
Financial Performance Overview
For the nine months ended September 30, 2024, LGI Homes reported the following financial results:
| Metric | 2024 | 2023 |
|---|---|---|
| Home Sales Revenues | $1,645,202,000 | $1,750,166,000 |
| Homes Closed | 4,495 | 4,971 |
| Average Sales Price per Home Closed | $366,007 | $352,075 |
| Gross Margin | $405,777,000 | $399,558,000 |
| Net Income | $145,201,000 | $147,138,000 |
Segment Performance
LGI Homes operates in several geographic segments, each contributing differently to the overall performance. The following table summarizes the home sales revenue, home closings, and average sales price by segment for the nine months ended September 30, 2024:
| Segment | Revenues | Home Closings | Average Sales Price |
|---|---|---|---|
| Central | $441,609,000 | 1,363 | $323,998 |
| Southeast | $407,068,000 | 1,231 | $330,681 |
| Northwest | $187,253,000 | 344 | $544,340 |
| West | $351,880,000 | 848 | $414,953 |
| Florida | $257,392,000 | 709 | $363,035 |
Cost Structure
The cost of sales for LGI Homes for the nine months ended September 30, 2024 was $1,239,425,000, which represents a decrease of $111,183,000 from $1,350,608,000 in the same period of 2023. The gross margin as a percentage of home sales revenues increased to 24.7% from 22.8% year-over-year.
Operating Expenses
Operating expenses are a critical component of the company's financial health. The following table outlines the selling and general administrative expenses for the nine months ended September 30, 2024:
| Expense Type | Amount |
|---|---|
| Selling Expenses | $149,196,000 |
| General and Administrative Expenses | $90,022,000 |
Net Income Analysis
For the three months ended September 30, 2024, LGI Homes reported a net income of $69,575,000, reflecting a 3.8% increase compared to $67,042,000 in the same period of 2023. This increase was attributed to a higher average sales price per home closed and gains from the sale of residential lots.
Market Position and Outlook
As of September 30, 2024, LGI Homes had a backlog of 1,088 homes valued at $417,798,000, a decrease from 1,377 homes valued at $509,932,000 a year earlier. The cancellation rate for the nine months was 21.6%, slightly improved from 22.8% in the previous year.
Community and Lot Inventory
LGI Homes had 138 active communities as of September 30, 2024, with a total of 68,564 lots owned or controlled, down from 71,081 at the end of 2023. This reflects a strategic approach to land acquisition and inventory management.
How LGI Homes, Inc. (LGIH) Makes Money
Revenue Sources
LGI Homes primarily generates revenue through the sale of single-family homes, targeting both entry-level and move-up buyers. The company operates under two main brands: LGI Homes for entry-level homes and Terrata Homes for move-up and luxury series homes. For the nine months ended September 30, 2024, total home sales revenues were $1.645 billion, compared to $1.750 billion for the same period in 2023, representing a decrease of 6.0%.
| Segment | Home Sales Revenues (2024) | Home Sales Revenues (2023) | Home Closings (2024) | Home Closings (2023) | Average Sales Price (2024) | Average Sales Price (2023) |
|---|---|---|---|---|---|---|
| Central | $441,609,000 | $564,580,000 | 1,363 | 1,724 | $323,998 | $327,483 |
| Southeast | $407,068,000 | $397,618,000 | 1,231 | 1,216 | $330,681 | $326,988 |
| Northwest | $187,253,000 | $212,885,000 | 344 | 433 | $544,340 | $491,651 |
| West | $351,880,000 | $256,575,000 | 848 | 672 | $414,953 | $381,808 |
| Florida | $257,392,000 | $318,508,000 | 709 | 926 | $363,035 | $343,961 |
| Total | $1,645,202,000 | $1,750,166,000 | 4,495 | 4,971 | $366,007 | $352,075 |
Cost of Sales and Gross Margin
For the nine months ended September 30, 2024, the cost of sales was $1.239 billion, down from $1.351 billion in the same period in 2023. The gross margin for this period was $405.8 million, a slight increase from $399.6 million in 2023. The gross margin percentage improved to 24.7% from 22.8% year-over-year.
| Metric | 2024 | 2023 |
|---|---|---|
| Cost of Sales | $1,239,425,000 | $1,350,608,000 |
| Gross Margin | $405,777,000 | $399,558,000 |
| Gross Margin % | 24.7% | 22.8% |
Operating Expenses
Selling expenses for the nine months ended September 30, 2024, were $149.2 million, an increase from $141.8 million in 2023, primarily due to higher advertising and personnel costs. General and administrative expenses rose to $90.0 million from $84.3 million in the previous year.
| Expense Type | 2024 | 2023 |
|---|---|---|
| Selling Expenses | $149,196,000 | $141,811,000 |
| General and Administrative Expenses | $90,022,000 | $84,334,000 |
Net Income and Earnings Per Share
Net income for the nine months ended September 30, 2024, was $145.2 million, a slight decrease from $147.1 million in 2023. Basic earnings per share were $6.17 for 2024, down from $6.24 in 2023.
| Metric | 2024 | 2023 |
|---|---|---|
| Net Income | $145,201,000 | $147,138,000 |
| Basic Earnings Per Share | $6.17 | $6.24 |
| Diluted Earnings Per Share | $6.15 | $6.21 |
Market Conditions and Strategic Adjustments
LGI Homes has adjusted its operations in response to market conditions, focusing on geographic diversification and strategic community openings. The average community count increased to 126.1 in 2024 from 101.1 in 2023, while the average monthly absorption rate decreased to 4.0 from 5.5, reflecting ongoing affordability constraints.
Backlog and Future Orders
As of September 30, 2024, the backlog consisted of 1,088 homes valued at approximately $417.8 million, down from 1,377 homes valued at $509.9 million in 2023. The cancellation rate for the period was 21.6% compared to 22.8% in 2023.
| Metric | 2024 | 2023 |
|---|---|---|
| Ending Backlog - Homes | 1,088 | 1,377 |
| Ending Backlog - Value | $417,798,000 | $509,932,000 |
| Cancellation Rate | 21.6% | 22.8% |
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Updated on 16 Nov 2024
Resources:
- LGI Homes, Inc. (LGIH) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of LGI Homes, Inc. (LGIH)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View LGI Homes, Inc. (LGIH)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.