Update shared on 15 Dec 2025
Fair value Decreased 15%Analysts have trimmed their price target on LGI Homes from approximately $47.00 to $40.00 per share. This reflects the application of a higher discount rate and a lower forward valuation multiple, which more than offset stronger revenue growth assumptions and only modestly softer profit margins.
What's in the News
- Announced Fulton Meadows, a new North Lakeland, Florida community of upgraded single family homes featuring the CompleteHome package and five floor plans, with strong connectivity to I-4 and local retail and recreation options (Key Developments).
- Detailed plans for Orchard Park near Bakersfield, California, a Shafter community offering five spacious floor plans, a central park with playground and fitness stations, and CompleteHome energy efficient and smart home features (Key Developments).
- Provided fourth quarter 2025 guidance, targeting 1,300 to 1,500 home closings and an average sales price per home between $365,000 and $375,000 (Key Developments).
- Expanded its footprint with new and grand opening communities, including Oquirrh Mountain Ranch in Utah, Rivenwick Village near Minneapolis, and multiple Terrata branded luxury neighborhoods in Florida and Tennessee (Key Developments).
- Continued its long running share repurchase program, having completed buybacks of approximately 3.7 million shares, or about 15% of shares outstanding, under the authorization announced in 2018 (Key Developments).
Valuation Changes
- Fair Value Estimate reduced significantly from approximately $47.00 to $40.00 per share, reflecting a more cautious overall valuation.
- Discount Rate increased modestly from about 11.55 percent to 12.50 percent, raising the hurdle rate applied to future cash flows.
- Revenue Growth Assumption raised substantially from roughly 3.90 percent to 10.48 percent, indicating a more optimistic outlook for top line expansion.
- Net Profit Margin trimmed slightly from about 6.12 percent to 5.84 percent, incorporating expectations for modestly higher costs or pricing pressure.
- Future P/E Multiple reduced moderately from around 9.77x to 8.90x, implying a lower valuation placed on projected earnings.
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