Earnings Miss: LGI Homes, Inc. Missed EPS By 73% And Analysts Are Revising Their Forecasts

As you might know, LGI Homes, Inc. (NASDAQ:LGIH) last week released its latest quarterly, and things did not turn out so great for shareholders. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$351m, statutory earnings missed forecasts by an incredible 73%, coming in at just US$0.17 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Our free stock report includes 2 warning signs investors should be aware of before investing in LGI Homes. Read for free now.

Taking into account the latest results, the current consensus from LGI Homes' five analysts is for revenues of US$2.28b in 2025. This would reflect an okay 5.4% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to fall 15% to US$6.66 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$2.32b and earnings per share (EPS) of US$7.37 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

Check out our latest analysis for LGI Homes

It might be a surprise to learn that the consensus price target was broadly unchanged at US$102, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic LGI Homes analyst has a price target of US$140 per share, while the most pessimistic values it at US$65.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that LGI Homes' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 7.2% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 2.0% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 4.3% per year. So it looks like LGI Homes is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for LGI Homes. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$102, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple LGI Homes analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for LGI Homes (1 is a bit unpleasant!) that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.