LGIH

LGI Homes delivered a second quarter that surpassed Wall Street’s revenue expectations, with management crediting results to higher home deliveries, strategic inventory management, and increased activity in key markets like Atlanta, Southern California, and Charlotte. CEO Eric Thomas Lipar noted that the company’s self-developed land position and disciplined cost controls allowed for improved profitability, even as affordability pressures persisted across the housing market. Management highlighted that house costs declined year over year, helping offset market headwinds such as elevated mortgage rates and higher energy costs. Is now the time to buy LGIH? Find out in our full research report (it’s free). Revenue: $501.5 million vs analyst estimates of $487.4 million (3.7% year-on-year growth, 2.9% beat) Adjusted EPS: $1.16 vs analyst estimates of $1.16 (in line) Operating Margin: 5.8%, down from 8% in the same quarter last year Market Capitalization: $1.32 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Trevor Allinson (Wolfe Research) asked about the drivers behind LGI Homes’ raised gross margin guidance despite higher mortgage rates. CEO Eric Thomas Lipar explained that improved land development profits, favorable sales mix, and lower house costs contributed to outperformance, though he noted ongoing incentives and market challenges. Allinson also inquired about demand trends and seasonality in July. Lipar responded that higher rates and negative news cycles were headwinds, but July closings were in line or slightly better than the company’s expectations, supporting full-year targets. Alex Rygiel (Texas Capital Securities) questioned the impact of new communities on average selling prices and margins. Lipar highlighted success in Western markets and noted that larger home selections by qualified buyers are contributing to upward pressure on ASPs. Rygiel followed up on whether July closings performed as expected. Lipar confirmed results were on track with guidance and emphasized disciplined tracking toward annual goals. Jay McCanless (Citizens Bank) asked about renewed wholesale demand following legislative changes and the company’s ability to offload older specs. Lipar said wholesale engagement has improved, though new orders have not yet materialized, and noted offloading finished lots to other builders as a strategic option. In the coming quarters, our analyst team will be monitoring (1) the pace at which LGI Homes expands its active community count and opens new markets, (2) execution on maintaining gross margins amid persistent affordability and rate pressures, and (3) the impact of improved land deals and renewed wholesale channel engagement on inventory turnover. Progress in converting backlog and sustaining price discipline will also be key signposts for ongoing performance. LGI Homes currently trades at $56.70, up from $56.10 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it’s free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Aug. 11, 2026 at 12:30 p.m. ET Executive Vice President of Finance and Capital Markets - Joshua D. Fattor Chief Executive Officer and Chairman of the Board - Eric Thomas Lipar Chief Financial Officer and Treasurer - Charles Michael Merdian Operator: Welcome to the LGI Homes second Quarter 26 Conference Call. Today's call is being recorded and a replay will be available on the company's website at ww.lgihomes.com. After management's prepared comments, there will be an opportunity to ask questions. At this time, I will turn the call over to Joshua D. Fattor, Executive Vice President of Finance and Capital Markets. Joshua D. Fattor: Thanks, and good afternoon. I will remind listeners that this call contains forward looking statements including management's views on the company's business strategy, outlook, plans, objectives and guidance for future periods. Such statements reflect management's current expectations and involve assumptions and estimates that are subject to risks and uncertainties that could cause those expectations to prove to be incorrect. You should review our filings with the SEC for a discussion of the risks uncertainties, and other factors that could cause actual results to differ from those presented today. Forward looking statements must be considered in light of those related risks, and you should not place undue reliance on such statements which reflect management's current viewpoints and are not guarantees of future performance. On this call, we will discuss non GAAP financial that are not intended to be considered in isolation or as substitutes for financial information presented in accordance with GAAP. Reconciliations of non GAAP financial measures to the most comparable measures prepared in accordance with GAAP can be found in the press release we issued this morning and on our quarterly report on Form 10 Q for the period ended 06/30/2026 that will be filed with the SEC today. This filing will be accessible on the SEC's website and on the investor relations section of our website. I am joined today by Eric Thomas Lipar, LGI Home chief executive officer and chairman of the board Charles Michael Merdian, chief financial officer and treasurer. I will now turn the call over to Eric. Eric Thomas Lipar: Thanks, Joshua. Good afternoon, and welcome to our earnings call. During the second quarter, our team delivered strong results, while continuing to navigate a dynamic operating environment. We delivered a total of 1.44 thousand homes during the quarter an increase of 9% over the prior year. Of this total, 1.36 thousand homes contributed directly to homebuilding revenue of $502 million an increase of 4% compared to the prior year. The additional 75 closings were currently or previously leased homes the gains from which were reflected in other income. Year to date, we have delivered a total of 2.36 thousand homes an increase of 2% over the same period last year leaving us well positioned to achieve our full year closing guidance. Our average selling price for new homes increased to over $367 thousand while we continue to support affordability through targeted price discounts, on older inventory, and financing incentives. We ended the quarter with 151 active communities already achieving the low end of our full year guidance range just 6 months into the year and representing an increase of 3.4% from a year ago. We are beginning to see some improvement in the land market, with a broader set of opportunities becoming available in transaction economics improving. We are finding more deals where pricing and terms align our disciplined underwriting standards particularly as new projects are brought to market later in the development process. This provides greater certainty around cost and demand assumptions enabling us to underwrite using today's market conditions and more readily achieve risk adjusted returns. Beyond 2026, our development pipeline positions us well for additional community openings in 2027 and continued community count growth. As we continue to grow our community count, we have invested in the capabilities of our organization. We have strengthened sales leadership, expanded leadership development initiatives, and continued refining our product along with the systems and processes that support our sales organization. We believe these capabilities will build upon our proven ability to deliver exceptional customer experience in high quality homes which together contribute to the strong customer satisfaction, and low warranty cost that are hallmarks of the LGI Homes brand. During the quarter, we averaged 3.2 total closings per community per month. Our strongest performing markets on a closings per community basis were Atlanta at 5.0 Southern California at 4.7, Charlotte at 4.2, Las Vegas at 3.9, and Albuquerque at 3.8 closings per community per month. We delivered a homebuilding gross margin of 19.8% and an adjusted homebuilding gross margin of 23.2% both of which were above the midpoint of the increased guidance range we provided on our last call. Our predominantly self developed on balance sheet land position remains an important advantage supporting higher profitability, and providing operational flexibility regardless of housing market conditions. Our adjusted EBITDA for the quarter was $59 million or 11.4% of total revenue reflecting prudent cost discipline sound decision making, and a sustained focus on the fundamentals. Demand for new homes during the second quarter was mixed but still proved more resilient than many would have expected. We ended the quarter with 1.3 thousand homes in backlog, up 61% compared to the prior year. The increase reflects both continued interest in homeownership and a longer buying process as customers navigate affordability challenges and financing qualification requirements. In addition to delivering growth and solid profitability, continue to strengthen our balance sheet. During the quarter, we paid down approximately $130 million on our credit facility reducing our leverage ratio by 22 basis points to 42.6%. This progress was driven by disciplined capital allocation, thoughtful management of our development investments, strategic balance sheet initiatives and continued success monetizing noncore and aged inventory positioning us to capitalize on opportunities as market conditions improve. As we look ahead, we believe our strong balance sheet liquidity and operating platform position us well to evaluate opportunities in an increasingly active M&A environment. Our focus continues to be on smaller strategic acquisitions that can enhance our existing platform and strengthen our position in attractive markets. Consistent with our approach, to capital allocation, we remain focused on opportunities that are strategically aligned culturally compatible financially accretive, and capable of creating long term shareholder value. Last week, members of our Board had the opportunity to visit communities within our Charlotte operation and see firsthand the exceptional work being done by the team. Charlotte continues to be 1 of our top performing markets, driven by the team's relentless focus on execution, customer service, and operational excellence. Their impact on our overall success has been significant I want to congratulate and thank everyone in The Carolinas for their hospitality, and continued commitment to delivering best in class results. Finally, on July 9, LGI Homes common stock was listed and began trading on NASDAQ, Texas. LGI Homes was founded in Texas, We are headquartered here in The Woodlands, and many of the families would help become homeowners call this stay home. We are pleased we won the early companies on this new exchange and believe it is a good reflection for our ongoing commitment to our home state. Now I will invite Charles to provide additional details on our financial results. Charles Michael Merdian: Thank you, Eric, and good afternoon. Total revenue in the second quarter was $516 million including $502 million of homebuilding revenue generated from 1.36 thousand new home closings and $14.5 million of revenue from the sale of land and lots and income from leasing operations. Of the 1.36 thousand new home closings delivered during the quarter, 295 or 21.6% were through our wholesale channel, compared to 17.9% during the same period last year. Our homebuilding gross margin of 19.8% and adjusted homebuilding gross margin of 23.2% each exceeded the midpoint of the increased guidance range provided on our last call. Adjusted homebuilding gross margin excluded $16.5 million of capitalized interest and $544 thousand related to purchase accounting. Combined selling, general, and administrative expenses totaled $72.7 million or 14.1% of total revenue an improvement of 40 basis points year over year. Selling expenses were $44.1 million or 8.6% of total revenue, compared to 8.5% in the same period last year. The increase was primarily due to higher overall spending to drive leads to our communities. General and administrative expenses were 28.6 million or 5.5% of total revenue compared to 6% in the same period last year reflecting higher revenues and our continued focus on controlling costs, improving efficiency, and maintaining a disciplined operating structure. Other income was $7.6 million driven primarily by the sale of 75 currently or previously leased homes. Adjusted EBITDA totaled $58.7 million representing 11.4% of total revenue. Pretax net income was $36.6 million or 7.1% of total revenue. And we generated net income of $27 million for the quarter, or $1.16 per basic and diluted share. Net orders in the second quarter were 39 homes, a decrease of 4.8% from 1.09 thousand homes during the same period last year. Reflecting continued affordability pressures higher mortgage rates, and elevated energy costs arising from the conflict in The Middle East. Our cancellation rate in the second quarter was 49.4% compared to 32.7% in the same period last year. Driven by a wider pool of buyers needing more time to get across. Finish line. We ended the quarter with 1.3 thousand homes in backlog, valued at $526 million representing increases of 60.6%, 63% respectively. Turning to our land position. As of June 30, we owned and controlled 57.4 thousand lots. A decrease of 11.4% year over year and 2.7% sequentially. This marked our sixth consecutive quarter of reducing our lot position while focusing capital on markets where demand and returns support the additional investment. Of our total lots, 50.5 thousand or 88% were owned. And 6.88 thousand lots or 12% were controlled. Of our owned lots, 33.8 thousand were broad land or land under development. 19% of which were in active development and 81% were in engineering or undeveloped land. Although early stage lots represent 2 thirds of our owned lot count, they require only modest investment per lot. In contrast, 26% of our $3.5 billion real estate inventory is invested in the 7% of lots that are homes in progress or completed. Positioning us for near term revenue conversion. Of the remaining 16.7 thousand owned lots, 13 thousand were finished vacant lots and 1.86 thousand were completed homes. During the quarter, we started 1.56 thousand homes, and ended June with 1.9 thousand homes under construction. I will now turn the call over to Joshua for a discussion of our capital position. Joshua D. Fattor: Thank you, Charles. We ended the quarter with just under $1.6 billion of debt outstanding, including $449 million drawn on our revolver resulting in a debt to capital ratio of 42.6% and a net debt to capital ratio of 41.6% sequential decreases of 2 hundred and 22 hundred and 40 basis points respectively. Total debt declined by approximately $129 million from the prior quarter and approximately $160 million year over year representing strong progress on our deleveraging objectives. These efforts are intended to enhance flexibility and position us to act opportunistically as attractive opportunities emerge. We ended the quarter with $468 million in liquidity, including $61 million of cash on hand, $107 million available to borrow under our credit facility, And as of June 30, our stockholders' equity was over 2.1 billion and our book value per share was $91.73. At this point, I will turn the call back over to Eric. Eric Thomas Lipar: Thanks, Joshua. Pleased with our performance during the quarter and remain confident in our ability to continue navigating the current market successfully. Our focus remains on affordability, inventory management, capital allocation, helping more families achieve the dream of homeownership as we move through the second half of the year. Customers remain highly payment sensitive particularly in an environment where mortgage rates continue to rise. However, our backlog remains strong, and buyers continue to inquire about homeownership and engage with our sales teams. After a quieter first half, we are seeing more of our wholesale partners reenter the market pursuit of growth opportunities. Demand for affordable homeownership continues to support our business, and we are right on track to achieve our 2026 objectives and continue executing against our long term growth strategy. Pending verification of fundings, we expect to announce that we closed 25 homes in July an increase of 11.5% over last year bringing our year to date closings to 2.78 thousand. As a result, we are well positioned to achieve the full year guidance metrics we provided on our last call including annual closings between 4.6 thousand and 5.4 thousand homes in a 150 to 160 active communities by year end. Our ability to maintain price year to date and current visibility into our backlog we are raising the guidance range for our average selling price by $5 thousand at both the low and high end of our prior range resulting in full year ASP range between $3.60 and $370 thousand We continue to expect SG&A as a percentage of revenue between 15-16%. Given our margin outperformance and visibility into the strong margins in our backlog, we are raising full year homebuilding gross margin and adjusted homebuilding gross margin by 50 basis points at both the low and high end of our prior ranges. We now expect homebuilding gross margin will range between 19-21% and adjusted homebuilding gross margin between 22 point 5 percent and 24 point half percent. This is our second consecutive quarter of raising gross margin guidance. Our teams continue to execute at a high level, delivering strong results across the business. We are pleased with our results to date and remain confident in our ability to achieve all of our full year expectations. We will now open the call for questions. Operator: And our first question will be coming from the line of Trevor Allinson of Wolfe Research. Your line is open. Trevor Allinson: Eric, I wanted to follow-up on the raise to gross margin guidance for the second quarter in a row. That was despite mortgage rates moving higher through the quarter. So can you talk about what is driving the better performance than you expected? Is it a less significant reaction from customers to the higher rates? what is going better than what you thought that is leading to the higher gross margins than what you originally anticipated? Eric Thomas Lipar: Yes, Trevor, thanks. Yes, I think part starting with, we do a lot of land developments. We got some land development profits in that gross margin. there is a mix component to that as well. there is a conservative component, not knowing exactly where incentives are going to be at the beginning of the year. So our guidance was conservative. And as we work through our older inventory, the new homes that we are closing have a higher gross margin. So that is been helpful. And, sequentially, the team across the country has done a great job of getting rid of a little older inventory. Our house costs are down year over year, which is contributing to that as well. So it is really a combination of a lot of factors, but we are pleased with our progress even though gross margins are still down year over year. We are still incentivizing our customers. We are still dealing with a higher rate environment, but really good progress. Trevor Allinson: Okay. Thanks for that, Eric. And then second 1 is on the demand trends through the quarter. I think you called the mix Can you just talk about kind of sequentially how that performed relative to normal seasonality given the move higher in rates and then similar comment or question on July. How has July trended so far relative to normal seasonality? Thanks. Eric Thomas Lipar: Yeah. We are definitely dealing with some normal seasonality in the summer months here in July. Definitely the higher rates, I think, in general. The higher rates and the, you know, negative news cycle, and the higher gas prices, are always going to be a headwind to sales. I think we are seeing some of that in July. But, also, you know, our July closing number that we report tomorrow, which is really focused on June and Q2 sales. We were happy with reporting approximately 425 closings We will also report an increase of another community. So we are going to report 102 active communities. And we will report tomorrow night. And we believe that is the highest active community count in company history. Thanks for all the color. Trevor Allinson: Goodbye, moving forward. Eric Thomas Lipar: Thanks, Trevor. Appreciate it. Hello? Operator: And as a reminder, to ask a question, please press 1-1 on your touch tone telephone and wait for your name to be announced. Our next question will come from the line of Alex Rygiel of Texas Capital Securities. Alex: Good morning, gentlemen. Nice quarter. Thank you. Can you talk a little bit more about the new communities that came online during the quarter. And even subsequently? And how they may impact ASPs and gross margin And it seems like or it looks like quite a few of these might have come online at the later portion of the quarter. Is that correct? Eric Thomas Lipar: Yeah. That is correct, Eric. This or excuse me, Alex. This is Eric. Yeah. We just opened up a new community-- ones we just added, California, we are having a lot of success in California. I know we added a few new communities in the Western United States that will influence ASP. We just added 1, a new project in Dallas just becoming an active community. We got a really good community that is off to a fast start in Seattle that is going to be really ramping up closings over the next 6 months that will influence ASP. So there is certainly a mixed component to our raising ASP guidance. We have also seen a component of mix within the floor plans of the community. Even though we are dealing with affordability-challenged market, a lot of the customers that qualify today are not necessarily picking the smallest homes in the community. They want what they want. And if they qualify and they sometimes pick the larger square footage in the community. So there is a mix intra community as well. Alex: That sounds great. And then regarding the closings in July, which looks pretty good, how does that compare to what you might have expected a few months ago? Do you feel it is a little bit better in line or a little bit lighter? Eric Thomas Lipar: I think it is in line to slightly better. Alex. I think we always track everything to our annual guidance. Of 4.6 thousand to 5.4 thousand homes. So I would say it was right on track to continue on our pace to hit our margin to get margin closings margin guidance and closing guidance for the year. Alex: that is great. And 1 last question. You referenced land looking to be a little bit more attractive. How should we think about how that is improved pricing flows through your income statement? Sort of how far down the road would we anticipate to see that play out? Charles Michael Merdian: Hey, Alex. This is Charles I think most of what we are still seeing are land deals, although they are further along in the entitlement process. So our development timelines are still running at about 12 to 18 months. So it would be into 2028. Most of these are communities that we are looking at that will affect our community count. Further out. So not as much in the near term because most of those projects are currently on our balance sheet. We have developed those first initial sections. So what you are coming through-- what is coming through in the short run are projects that we had purchased several years ago. Very helpful. Alex: Thank you. Charles Michael Merdian: You bet. Thank you. Operator: Our next question will be coming from the line of Jay McCanless of Citizens Bank. Jay, your line is open. Jay McCanless: Hey, good afternoon, everyone. Thanks for taking my questions. Great progress on getting the finished spec count down. I guess, could we talk about the comment? I cannot remember who made it, but about demand from wholesale getting better, especially now that the Road to Housing Act is finished? Does a, or is it turning into tangible contracts yet, but also, b, is this an opportunity for LGI to offload some of the older specs that you referenced earlier, Eric? Eric Thomas Lipar: Yes and yes, Jay. I think it is not necessarily turning into orders yet, but from for most of the year until the Road to Housing Act was finalized, there was just uncertainty. And what uncertainty leads to is just pencils down and not really a lot of engagement from our wholesale partners. And now that the Road to Housing Act is finalized and which was positive, we have seen the investors pick up their pencil. They are engaged. They are talking to our teams. Not necessarily resulting in orders yet, but we are talking to them, and it is very much a positive for our business, not only to finish out the year, whether it is older inventory or also making agreements to look at contracts and delivering houses going into next year as well. Jay McCanless: Got it. And then the next 1 I had you said that you are seeing at the beginning of the prepared comments that you are seeing better opportunities for land deals, maybe a little more rational in terms of pricing I think last quarter, you guys talked about more finished lot deals that you were able to see. Is that what is happened again this quarter is that there is more finished lots available out there? And stuff that y'all can turn a little bit quicker Is that what happened this quarter? Eric Thomas Lipar: Yeah. So, I mean, Charles commented, they are most predominantly land still, and we are comfortable developing land. But we are starting to see some finished lot opportunities that we can turn quicker. Even the land parcels we are seeing are smaller They are further in the development. Cycle. The pricing is more reflective of it is it is a challenging market right now for developers to capture development profit, especially if they have bought the project over the last few years. So the finished lot opportunities are very accretive because you can buy finished lots or partially developed lots but there is no reason to develop them to end up at the same price, I guess, is my point. The developer profit is challenging right now. So we are seeing those opportunities. And the acquisitions teams are all doing a great job and letting everyone know that we are open for business and looking at growing our community count. Jay McCanless: that is great. And then on the flip side of that, on some of the older land parcels that you that LGI is trying to sell, type of investor interest or interest level have you seen with those type of sales? Eric Thomas Lipar: Yeah. I think the opportunity for us is really on the finish lots. You know, we are very comfortable. They are older land parcels. The ones we bought were our basis is very strong. But I think just like us, the opportunity to sell lots is really the finished lot opportunities where we have a section that maybe is too large for the current absorption pace. And we can sell some finished lots to another builder, that would be a great partner. And they would reinvest those dollars in an additional community count somewhere else. Jay McCanless: Okay. that is great. Thanks again. Eric Thomas Lipar: Thanks, Jay. Operator: Thank you. At this time, I am showing no further questions. I would now like to turn the call back to Eric for closing remarks. Eric Thomas Lipar: Yes. Thanks, everyone, for participating on today's call and your continued interest in LGI Homes. Have a great day. Operator: And this concludes today's conference call. Thank you for participating. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends LGI Homes. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy. LGI Homes (LGIH) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

LGI Homes, Inc. recently reported past second-quarter 2026 results, with revenue of US$516.05 million and net income of US$26.98 million, while also reiterating plans to pursue smaller, bolt-on acquisitions to strengthen its homebuilding platform in selected markets. Management’s focus on acquisitions that are financially accretive, culturally compatible, and aligned with its existing footprint highlights how LGI Homes is trying to enhance scale and market presence without shifting away from its core affordable-housing model. We’ll now explore how LGI Homes’ pursuit of smaller, accretive acquisitions shapes the existing investment narrative around growth and risk. Find 51 companies with promising cash flow potential yet trading below their fair value. To own LGI Homes, you need to believe its affordable, entry level focus can translate steady buyer interest into healthier margins over time, despite recent earnings pressure. The Q2 2026 results, with revenue up but net income and margins down year over year, keep the main near term catalyst on execution and cost control, while reaffirmed interest in small, accretive acquisitions does not materially change the central risk around affordability and demand volatility. Among recent announcements, the grand opening of Blue Ridge Crossing in Blue Ridge, Texas, stands out because it reinforces LGI Homes’ core proposition of move in ready, affordable homes with a standardized CompleteHome package. Communities like this tie directly into management’s plan to deepen its presence in targeted markets, and they frame how any future bolt on acquisitions might complement organic community growth as a potential support for volumes and operating leverage. Yet, while growth in new communities is encouraging, investors should be aware that concentrated exposure to entry level buyers could still magnify the impact of... Read the full narrative on LGI Homes (it's free!) LGI Homes’ narrative projects $2.3 billion revenue and $90.2 million earnings by 2029. Uncover how LGI Homes' forecasts yield a $93.00 fair value, a 57% upside to its current price. By contrast, the most pessimistic analysts warn that persistent affordability pressure could keep margins tight even as they still pencil in US$2.2 billion of revenue and US$87.5 million of earnings by 2029, reminding you that views on LGI’s acquisition push and entry level focus can differ widely and may shift again as this new information is absorbed. Explore 2 other fair value estimates on LGI Homes - why the stock might be worth 31% less than the current price! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your LGI Homes research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision. Our free LGI Homes research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate LGI Homes' overall financial health at a glance. The market won't wait. These fast-moving stocks are hot now. Grab the list before they run: We've uncovered the 9 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. Uncover the next big thing with 20 elite penny stocks that balance risk and reward. Invest in the nuclear renaissance through our list of 89 elite nuclear energy infrastructure plays powering the global AI revolution. 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. Companies discussed in this article include LGIH. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. Total Revenue: $516 million in Q2 2026. Homebuilding Revenue: $501.5 million from 1,365 new home closings. Home Closings: 1,440 total homes delivered in Q2, up 9% year-over-year; 1,365 contributed to homebuilding revenue. Average Selling Price (ASP): Over $367,000 for new homes in Q2. Homebuilding Gross Margin: 19.8% in Q2. Adjusted Homebuilding Gross Margin: 23.2% in Q2, excluding $16.5 million of capitalized interest and $544,000 related to purchase accounting. Adjusted EBITDA: $58.7 million, or 11.4% of total revenue. Net Income: $27 million, or $1.16 per basic and diluted share. Pre-Tax Net Income: $36.6 million, or 7.1% of total revenue. SG&A Expenses: $72.7 million, or 14.1% of total revenue, an improvement of 40 basis points year-over-year. Selling Expenses: $44.1 million, or 8.6% of total revenue. General and Administrative Expenses: $28.6 million, or 5.5% of total revenue. Net Orders: 1,039 homes in Q2, a decrease of 4.8% year-over-year. Cancellation Rate: 49.4% in Q2, compared to 32.7% in the prior year. Backlog: 1,298 homes valued at $525.5 million, up 60.6% and 63% year-over-year, respectively. Active Communities: 151 at quarter end, up 3.4% year-over-year. Closings per Community per Month: 3.2 average in Q2; top markets included Atlanta at 5.0, Southern California at 4.7, Charlotte at 4.2, Las Vegas at 3.9, and Albuquerque at 3.8. Wholesale Channel Closings: 295 homes, or 21.6% of total new home closings, compared to 17.9% in the prior year. Other Income: $7.6 million, driven primarily by the sale of 75 currently or previously leased homes. Debt: Just under $1.6 billion outstanding, including $449 million drawn on the revolver; debt-to-capital ratio of 42.6%. Liquidity: $468 million, including $61 million cash and $406.9 million available under the credit facility. Stockholders' Equity: Over $2.1 billion; book value per share of $91.73. Land Position: Owned and controlled 57,406 lots, a decrease of 11.4% year-over-year. Homes Under Construction: 1,899 at quarter end; 1,560 homes started during Q2. July Closings (Preliminary): 425 homes, an increase of 11.5% year-over-year, bringing year-to-date closings to 2,781. Full-Year Guidance: Closings between 4,600 and 5,400 homes; ASP raised to $360,000-$370,000; homebuilding gross margin raised to 19%-21%; adjusted homebuilding gross margin raised to 22.5%-24.5%; SG&A as a percentage of revenue expected between 15% and 16%. Warning! GuruFocus has detected 8 Warning Signs with LGIH. Is LGIH fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. LGI Homes Inc (NASDAQ:LGIH) delivered strong Q2 results with total home deliveries up 9% year-over-year to 1,440 homes, and homebuilding revenue increasing 4% to $502 million. The company raised its full-year guidance for average selling price (ASP) to $360,000-$370,000 and gross margins for the second consecutive quarter, reflecting improved profitability and cost discipline. LGI Homes Inc (NASDAQ:LGIH) strengthened its balance sheet by paying down approximately $130 million on its credit facility, reducing its debt-to-capital ratio by 220 basis points to 42.6%. The company ended the quarter with 151 active communities, already at the low end of its full-year guidance range, and expects to report 152 active communities in July, the highest in company history. LGI Homes Inc (NASDAQ:LGIH) is seeing improved land market conditions with more attractive deals, including finished lot opportunities, which could support future community growth and margins. Backlog increased 61% year-over-year to 1,298 homes, providing strong visibility into future revenue and supporting the company's confidence in achieving its 2026 objectives. The company reported strong performance in key markets like Atlanta (5.0 closings per community per month) and Southern California (4.7), demonstrating operational excellence. LGI Homes Inc (NASDAQ:LGIH) is benefiting from increased engagement from wholesale partners following the finalization of the Road to Housing Act, which could help offload older inventory. The company raised its full-year homebuilding gross margin guidance to 19%-21% and adjusted gross margin to 22.5%-24.5%, reflecting better-than-expected performance. LGI Homes Inc (NASDAQ:LGIH) maintains a strong liquidity position with $468 million available, including $406.9 million under its credit facility, providing flexibility for strategic opportunities. Net orders in Q2 decreased 4.8% year-over-year to 1,039 homes, reflecting continued affordability pressures, higher mortgage rates, and elevated energy costs. The cancellation rate surged to 49.4% in Q2, up from 32.7% in the prior year, driven by a wider pool of buyers needing more time to complete purchases. LGI Homes Inc (NASDAQ:LGIH) continues to face headwinds from rising mortgage rates and a negative news cycle, which are impacting sales momentum, particularly in July. The company's lot position decreased 11.4% year-over-year to 57,406 lots, marking the sixth consecutive quarter of reduction, which could limit future growth if not replenished. Gross margins remain under pressure year-over-year, despite improvement, as the company continues to offer incentives and price discounts to support affordability. The company's wholesale channel accounted for 21.6% of closings, up from 17.9% last year, indicating a higher reliance on potentially lower-margin sales. LGI Homes Inc (NASDAQ:LGIH) faces a longer buying process as customers navigate affordability challenges and financing qualification, which could slow order conversion. The company's development pipeline for new land deals is expected to impact community count only in 2028, providing limited near-term growth from new acquisitions. Higher selling expenses, up to 8.6% of revenue, were driven by increased spending to drive leads, which could pressure margins if not offset by higher volumes. The company's debt remains substantial at nearly $1.6 billion, with $449 million drawn on its revolver, indicating ongoing leverage despite deleveraging progress. Q: What is driving the second consecutive quarter of raising gross margin guidance, despite mortgage rates moving higher?A: Eric Lipar, CEO, attributed the outperformance to a combination of factors: land development profits embedded in gross margin, a favorable mix shift as older, lower-margin inventory is sold through, conservative initial guidance, and lower house costs year-over-year. He noted that while gross margins are still down year-over-year due to incentives and higher rates, the progress is encouraging. Q: How did demand trends perform sequentially through the quarter and into July relative to normal seasonality?A: Eric Lipar, CEO, acknowledged that July is experiencing normal summer seasonality, with higher mortgage rates, a negative news cycle, and elevated gas prices acting as headwinds to sales. However, he highlighted that July closings are expected to be approximately 425 homes, an 11.5% increase year-over-year, and the company will report 152 active communities, the highest count in company history. Q: How will the new communities that came online during the quarter impact average selling price (ASP) and gross margin?A: Eric Lipar, CEO, confirmed that many new communities opened later in the quarter, particularly in California, Dallas, and Seattle, which will influence ASP. He noted a mix component within communities as well, where qualifying customers are often choosing larger floor plans, not just the smallest homes, contributing to the raised ASP guidance. Q: How does the improved land market pricing flow through the income statement, and how far down the road will the impact be seen?A: Charles Merdian, CFO, explained that most new land deals are further along in the entitlement process, with development timelines of 12 to 18 months, meaning the impact will be felt in 2028. Near-term results are driven by projects purchased several years ago, as most current projects are already on the balance sheet. Q: Is the improving demand from wholesale partners turning into tangible contracts, and is it an opportunity to offload older specs?A: Eric Lipar, CEO, confirmed both. With the Road to Housing Act finalized, wholesale investors are re-engaging and talking to teams, though not yet resulting in orders. This is a positive for the business, both for selling older inventory this year and for potential contracts delivering into next year. Q: Are the better land opportunities primarily finished lots that can be turned quicker, as seen last quarter?A: Eric Lipar, CEO, noted that while land deals are still predominant, the company is seeing more finished lot opportunities that can be turned faster. These are accretive because developers are struggling to capture development profit in the current market, making finished or partially developed lots attractive purchases. Q: What level of investor interest is LGI seeing for selling its own older land parcels?A: Eric Lipar, CEO, stated that the opportunity lies in selling finished lots, particularly sections that are too large for current absorption pace. The company is comfortable with its older land parcels given strong basis, but sees finished lot sales to other builders as a way to reinvest capital into additional communities. Q: How did July closings compare to expectations set a few months ago?A: Eric Lipar, CEO, said July closings were in line or slightly better than expectations, tracking well against the full-year guidance of 4,600 to 5,400 homes. He expressed confidence in maintaining the pace to hit both closing and margin guidance for the year. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

THE WOODLANDS, Texas, Aug. 04, 2026 (GLOBE NEWSWIRE) -- LGI Homes, Inc. (NASDAQ: LGIH) today announced financial results for the second quarter and the six months ended June 30, 2026. “We delivered strong results during the second quarter, exceeding expectations across key metrics while navigating a dynamic operating environment,” said Eric Lipar, Chairman and Chief Executive Officer of LGI Homes. “During the quarter, we delivered 1,440 homes, an 8.8% increase year-over-year, generating total revenues of $516.0 million and homebuilding revenues of $501.5 million. “We ended the quarter with 151 active communities, achieving the low end of our full year guidance just six months into the year, and representing an increase of 3.4% compared to the same time last year. “Homebuilding gross margin of 19.8% and adjusted homebuilding gross margin of 23.2% both exceeded the midpoint of our previously increased guidance range, reflecting our disciplined approach to pricing, incentives, and inventory management and the continued benefits of our self-development platform. “We made significant progress strengthening our balance sheet during the quarter, reducing debt by $128.6 million and ending the period with a debt-to-capital ratio of 42.6%, a 220 basis point improvement year-over-year. “On the strength of our outperformance in the first half of the year, we are raising our full-year gross margin guidance for the second consecutive quarter. We now expect our homebuilding gross margin will range between 19.0% and 21.0% and adjusted homebuilding gross margin between 22.5% and 24.5%. We are also raising the guidance for our full-year average sales price per home closed to between $360,000 and $370,000.” Mr. Lipar concluded, “With strong visibility into the second half of the year, we are confident in achieving all of our objectives for 2026 and remain focused on balancing sales pace, profitability, and inventory management as we create long-term value for our shareholders.” Second Quarter 2026 Highlights and Comparisons to Second Quarter 2025 Homebuilding revenues of $501.5 million, an increase of 3.7% Total home closings of 1,440, including 75 currently and previously leased homes, an increase of 8.8% Home closings of 1,365, an increase of 3.2% Average sales price per home closed of $367,407, an increase of 0.5% Homebuilding gross margin as a percentage of homebuilding revenues of 19.8% Adjusted homebuilding gross margin* as a percentage of homebuilding revenues of 23.2% Net income before income taxes of $36.6 million Net income of $27.0 million or $1.16 basic EPS and $1.16 diluted EPS Six Months Ended June 30, 2026 Highlights and Comparisons to Six Months Ended June 30, 2025 Homebuilding revenues of $821.2 million, a decrease of 1.6% Total home closings of 2,356, including 110 currently and previously leased homes, an increase of 1.6% Home closings of 2,246, a decrease of 3.1% Average sales price per home closed of $365,649, an increase of 1.6% Homebuilding gross margin as a percentage of homebuilding revenues of 19.4% Homebuilding gross margin excluding inventory impairment* as a percentage of homebuilding revenues of 20.0% Adjusted homebuilding gross margin* as a percentage of homebuilding revenues of 23.3% Net income before income taxes of $40.9 million Net income of $29.1 million or $1.26 basic EPS and $1.25 diluted EPS Adjusted net income* of $32.6 million, or $1.41 adjusted basic EPS* and $1.40 adjusted diluted EPS* *Please see “Non-GAAP Measures” for a reconciliation of Homebuilding Gross Margin Excluding Inventory Impairment (a non-GAAP measure) and Adjusted Homebuilding Gross Margin (a non-GAAP measure) to Homebuilding Gross Margin, and Adjusted Net Income (a non-GAAP measure) to Net Income, the most directly comparable GAAP measures, and for calculations of adjusted basic EPS and adjusted diluted EPS. Balance Sheet Highlights Total liquidity of $468.0 million at June 30, 2026, including cash and cash equivalents of $61.1 million and $406.9 million of availability under the Company’s revolving credit facility Net debt to capital ratio* of 41.6% at June 30, 2026 *Please see “Non-GAAP Measures” for a reconciliation of net debt to capital ratio (a non-GAAP measure) to debt to capital ratio, the most directly comparable GAAP measure. Full Year 2026 Outlook Subject to the caveats in the Forward-Looking Statements section of this press release and the assumptions noted below, the Company is updating its average sales price per home closed, homebuilding gross margin, and adjusted homebuilding gross margin as a percentage of homebuilding revenues outlook for the full year 2026 and reiterating its other outlook items for the full year 2026. Currently, the Company expects for full year 2026: Home closings between 4,600 and 5,400 Active selling communities at the end of 2026 between 150 and 160 Average sales price per home closed between $360,000 and $370,000 Homebuilding gross margin as a percentage of homebuilding revenues between 19.0% and 21.0%, adjusted for estimated capitalized interest and estimated purchase accounting of approximately 3.5%, which results in adjusted homebuilding gross margin (non-GAAP) as a percentage of homebuilding revenues between 22.5% and 24.5% SG&A as a percentage of total revenues between 15.0% and 16.0% Effective tax rate of approximately 26.5% This outlook assumes that general economic conditions, including input costs, materials, product and labor availability, interest rates and mortgage availability, in the remainder of 2026 are similar to those experienced to date in 2026 and that construction costs, availability of land and land development costs for the remainder of 2026 are consistent with the Company’s recent experience. In addition, this outlook assumes that governmental regulations relating to land development and home construction are similar to those currently in place and does not take into account any additional changes to U.S. trade policies, including the imposition of tariffs and duties on homebuilding products. Earnings Conference Call The Company will host a conference call via live webcast for investors and other interested parties beginning at 12:30 p.m. Eastern Time on Tuesday, August 4, 2026 (the “Earnings Call”). Participants may access the live webcast by visiting the Investor Relations section of the Company’s website at https://investor.lgihomes.com. An archive of the Earnings Call webcast will be available for replay on the Company’s website for one year from the date of the Earnings Call. About LGI Homes, Inc. Headquartered in The Woodlands, Texas, LGI Homes, Inc. is a pioneer in the homebuilding industry, successfully applying an innovative and systematic approach to the design, construction and sale of homes across 36 markets in 21 states. LGI Homes has closed over 80,000 homes since its founding in 2003 and has delivered profitable financial results every year. Nationally recognized for its quality construction and exceptional customer service, LGI Homes was named to Newsweek’s list of the World’s Most Trustworthy Companies. LGI Homes’ commitment to excellence extends to its employees, earning the Company numerous workplace awards at the local, state, and national level, including the Top Workplaces USA 2026 Award. For more information about LGI Homes and its unique operating model focused on making the dream of homeownership a reality for families across the nation, please visit the Company’s website at www.lgihomes.com. Forward-Looking Statements Any statements made in this press release or on the Earnings Call that are not statements of historical fact, including statements about the Company’s beliefs, outlook and expectations, are forward-looking statements within the meaning of the federal securities laws, and should be evaluated as such. Forward-looking statements include information concerning expected 2026 home closings, active selling communities, average sales price per home closed, homebuilding gross margin as a percentage of homebuilding revenues, adjusted homebuilding gross margin as a percentage of homebuilding revenues, SG&A as a percentage of total revenues and effective tax rate, as well as market conditions and possible or assumed future results of operations, including descriptions of the Company’s business plan and strategies. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “predict,” “projection,” “should,” “will” or, in each case, their negative, or other variations or comparable terminology. For more information concerning factors that could cause actual results to differ materially from those contained in the forward-looking statements please refer to the “Risk Factors” section in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, including the “Cautionary Statement about Forward-Looking Statements” subsection within the “Risk Factors” section, and subsequent filings by the Company with the U.S. Securities and Exchange Commission (the “SEC”), including the “Risk Factors” and “Cautionary Statement about Forward-Looking Statements” sections in the Company’s Quarterly Report on Form 10-Q for the quarters ended March 31, 2026 and June 30, 2026 (when it is filed with the SEC). The Company bases these forward-looking statements or outlook on its current expectations, plans and assumptions that it has made in light of its experience in the industry, as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances and at such time. As you read and consider this press release or listen to the Earnings Call, you should understand that these statements are not guarantees of future performance or results. The forward-looking statements, including the Company’s 2026 outlook, are subject to and involve risks, uncertainties and assumptions and you should not place undue reliance on these forward-looking statements or outlook. Although the Company believes that these forward-looking statements and outlook are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect the Company’s actual results to differ materially from those expressed in the forward-looking statements and outlook. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. If the Company does update one or more forward-looking statements, there should be no inference that it will make additional updates with respect to those or other forward-looking statements. Homebuilding Revenues, Home Closings, Average Sales Price Per Home Closed (ASP), Average Community Count, Average Monthly Absorption Rate, and Ending Community Count by Reportable Segment (Revenues in thousands, unaudited) Homebuilding Revenues, Home Closings, Average Sales Price Per Home Closed (ASP), Average Community Count, and Average Monthly Absorption Rate by Reportable Segment(Revenues in thousands, unaudited) Owned and Controlled Lots The table below shows (i) home closings by reportable segment for the six months ended June 30, 2026 and (ii) the Company’s owned or controlled lots by reportable segment as of June 30, 2026. (1)   Of the 50,522 owned lots as of June 30, 2026, 33,775 were raw/under development lots and 16,747 were finished lots. Finished lots included 1,858 completed homes, including information centers, and 1,899 homes in progress. Backlog Data As of the dates set forth below, the Company’s net orders, cancellation rate and ending backlog homes and value were as follows (dollars in thousands, unaudited): (1)  Net orders are new (gross) orders for the purchase of homes during the period, less cancellations of existing purchase contracts during the period. (2)  Cancellation rate for a period is the total number of purchase contracts cancelled during the period divided by the total new (gross) orders for the purchase of homes during the period. (3)  Ending backlog consists of retail homes at the end of the period that are under a purchase contract that has been signed by homebuyers who have met preliminary financing criteria but have not yet closed and wholesale contracts with varying terms. Ending backlog is valued at the contract amount. (4)  As of June 30, 2026, the Company had 269 units related to bulk sales agreements associated with its wholesale business. (5)  As of June 30, 2025, the Company had 91 units related to bulk sales agreements associated with its wholesale business. Non-GAAP Measures In addition to the results reported in accordance with accounting principles generally accepted in the United States (“GAAP”), the Company has provided information in this press release relating to adjusted net income, adjusted basic earnings per share, adjusted diluted earnings per share, homebuilding gross margin excluding inventory impairment, adjusted homebuilding gross margin, and net debt to capital ratio. Adjusted Net Income, Adjusted Basic Earnings per Share, and Adjusted Diluted Earnings per Share Adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share are non-GAAP financial measures used by management as supplemental measures in evaluating operating performance. The Company defines adjusted net income as net income less inventory impairment charges. The Company defines adjusted basic earnings per share as adjusted net income divided by weighted average basic shares outstanding. The Company defines adjusted diluted earnings per share as adjusted net income divided by weighted average diluted shares outstanding. Management believes that the presentation of adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share provides useful information to investors because such measures isolate the impact that inventory impairment charges have on net income and earnings per share. However, because adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share exclude the inventory impairment charge, which has real economic effects and could impact the Company’s results, the utility of adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share as measures of the Company’s operating performance may be limited. In addition, other companies may not calculate adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share in the same manner that the Company does. Accordingly, adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share should be considered only as supplements to net income, basic earnings per share, and diluted earnings per share, respectively, as measures of the Company’s performance. The following table reconciles adjusted net income to net income, which is the GAAP financial measure that management believes to be most directly comparable, and adjusted basic earnings per share and adjusted diluted earnings per share are calculated by dividing adjusted net income by basic or diluted weighted average shares outstanding, respectively (dollars in thousands, except earnings per share, unaudited): Homebuilding Gross Margin Excluding Inventory Impairment and Adjusted Homebuilding Gross Margin Homebuilding gross margin excluding inventory impairment and adjusted homebuilding gross margin are non-GAAP financial measures used by management as supplemental measures in evaluating operating performance. The Company defines homebuilding gross margin excluding inventory impairment as homebuilding gross margin less inventory impairment charges. The Company defines adjusted homebuilding gross margin as homebuilding gross margin excluding inventory impairment, less capitalized interest and adjustments resulting from the application of purchase accounting included in the cost of sales. Management believes homebuilding gross margin excluding inventory impairment and adjusted homebuilding gross margin are useful because they isolate the impact that capitalized interest, purchase accounting adjustments, and inventory impairment (as applicable) have on homebuilding gross margin. However, because homebuilding gross margin excluding inventory impairment and adjusted homebuilding gross margin exclude capitalized interest, purchase accounting adjustments, and inventory impairment (as applicable), which have real economic effects and could impact the Company’s results, the utility of homebuilding gross margin excluding inventory impairment and adjusted homebuilding gross margin as measures of the Company’s operating performance may be limited. In addition, other companies may not calculate homebuilding gross margin excluding inventory impairment and adjusted homebuilding gross margin in the same manner that the Company does. Accordingly, homebuilding gross margin excluding inventory impairment and adjusted homebuilding gross margin should be considered only as supplements to homebuilding gross margin as a measure of the Company’s performance. The following table reconciles homebuilding gross margin excluding inventory impairment and adjusted homebuilding gross margin to homebuilding gross margin (homebuilding revenues less homebuilding costs), which is the GAAP financial measure that management believes to be most directly comparable (dollars in thousands, unaudited): (1)  Adjustments result from the application of purchase accounting for acquisitions and represent the amount of the fair value step-up adjustments included in cost of sales for real estate inventory sold after the acquisition dates. (2)  Calculated as a percentage of homebuilding revenues. Net Debt to Capital Ratio Net debt to capital ratio is a non-GAAP financial measure used by management as a supplemental measure in understanding the leverage employed in the Company’s operations and as an indicator of its ability to obtain financing. The Company defines net debt to capital ratio as net debt (which is total debt minus cash and cash equivalents) divided by net debt plus total equity. Management believes that the presentation of net debt to capital ratio provides useful information to investors regarding the Company’s financial leverage and its ability to meet long-term obligations. By excluding cash and cash equivalents from total debt, the ratio offers a clearer view of the Company’s capital structure and financial flexibility. Management uses this metric to monitor the Company’s capital efficiency and to evaluate the effectiveness of its capital management strategies over time. Other companies may define this measure differently and, as a result, the Company’s measure of net debt to capital ratio may not be directly comparable to the measures of other companies. The following table reconciles net debt to capital ratio (a non-GAAP financial measure) to debt to capital ratio, which is the GAAP financial measure that management believes to be most directly comparable (dollars in thousands, unaudited): (1) Net debt to capital ratio is calculated as net debt (which is total debt minus cash and cash equivalents) divided by net debt plus total equity. CONTACT:Joshua D. FattorExecutive Vice President of Finance and Capital Markets(281) [email protected]

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by a 9% increase in home deliveries and a 4% rise in homebuilding revenue, supported by a strong self-developed land position that provides higher profitability and operational flexibility. Management attributed the gross margin outperformance to land development profits, a favorable product mix, and a disciplined effort to monetize older, incentivized inventory. The company successfully reached the low end of its full-year community count guidance six months early, ending the quarter with 151 active communities. A 61% year-over-year increase in backlog reflects resilient demand for homeownership, though management noted a longer buying process as customers navigate affordability and financing hurdles. Strategic balance sheet management included a $130 million reduction in credit facility debt, lowering the leverage ratio to 42.6% to enhance flexibility for future M&A opportunities. The land market is showing signs of improvement with better transaction economics and opportunities to acquire projects later in the development cycle, reducing cost and demand uncertainty. Full-year homebuilding gross margin guidance was raised by 50 basis points to a range of 19-21%, reflecting visibility into strong margins within the current backlog. Average Selling Price (ASP) guidance was increased by $5,000 at both ends of the range to $360,000-$370,000, driven by geographic mix and customers selecting larger floor plans. Management expects to achieve full-year closing guidance of 4,600 to 5,400 homes, supported by a preliminary July closing count of 425 homes. The development pipeline is positioned for continued community count growth into 2027, with a focus on smaller strategic acquisitions that are financially accretive. Guidance assumes continued payment sensitivity among customers and potential headwinds from higher mortgage rates and seasonal summer slowdowns. The company transitioned its stock listing to the NASDAQ Texas exchange as of July 9, reflecting its corporate roots and commitment to its home state. A high cancellation rate of 49.4% was reported, which management linked to the extended time required for buyers to secure financing in a high-rate environment. The lot position was reduced for the sixth consecutive quarter to 57.4 thousand lots as the company prioritizes capital allocation toward high-demand markets. Inventory concentration remains high, with 26% of real estate inventory value tied to the 7% of lots that are currently homes in progress or completed. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management cited land development profits and a shift away from older, heavily incentivized inventory toward new homes with higher margins. House costs have decreased year-over-year, providing a tailwind despite the continued need for customer incentives in a high-rate environment. New openings in high-value markets like California, Seattle, and Dallas are influencing the upward trend in ASP. Affordability-challenged buyers who do qualify are often opting for larger square footage floor plans rather than the smallest available options. The finalization of the Road to Housing Act has removed uncertainty, leading to renewed engagement and 'pencils down' ending for wholesale partners. While not yet reflected in orders, management expects this to facilitate the offloading of older inventory and support volume into next year. LGI is seeing more finished lot opportunities that allow for quicker capital turns compared to traditional long-term land development. The company is open to selling finished lots in its own large sections to other builders to diversify risk and reinvest capital into new community locations.

Interested in LGI Homes, Inc.? Here are five stocks we like better. Q2 deliveries and profitability improved: LGI Homes delivered 1,440 homes, up 9% year over year, while adjusted homebuilding gross margin reached 23.2%, above guidance. Net income was $27 million, or $1.16 per diluted share. Demand remained pressured: Net orders fell 4.8% and the cancellation rate rose to 49.4% as high mortgage rates and affordability challenges weighed on buyers. However, backlog increased 60.6% to 1,298 homes valued at $525.5 million. Outlook and balance sheet strengthened: LGI reduced debt by about $129 million sequentially and raised its full-year average selling price and gross-margin guidance, while maintaining projections for 4,600–5,400 home closings and 150–160 active communities. Congress Beat the Market Again—Here Are the 3 Stocks They Bought LGI Homes (NASDAQ:LGIH) reported second-quarter results that included higher home deliveries, improved gross-margin guidance and continued debt reduction, while management said affordability pressures and elevated mortgage rates continued to weigh on demand and cancellations. The company delivered 1,440 homes in the second quarter, up 9% from a year earlier. Of those deliveries, 1,365 new-home closings contributed $501.5 million in homebuilding revenue, while 75 currently or previously leased-home closings were reflected in other income. Total revenue was $516 million, including $14.5 million from land and lot sales and leasing operations. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Investors Are Buying The Dip In LGI Homes Stock Chief Executive Officer and Chairman Eric Lipar said LGI's average selling price for new homes rose above $367,000 during the quarter. The company continued to use targeted discounts on older inventory and financing incentives to support affordability. Homebuilding gross margin was 19.8%, while adjusted homebuilding gross margin was 23.2%, both above the midpoint of the guidance range LGI had raised during its prior earnings call. The adjusted figure excluded $16.5 million of capitalized interest and $544,000 related to purchase accounting. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? Lipar attributed the stronger-than-expected margin performance to a combination of land-development profits, sales mix, conservative initial assumptions on incentives, lower house costs from a year earlier and progress reducing older inventory. He said homes now closing from newer inventory carry higher gross margins, though margins remain down year over year and the company continues to offer customer incentives. Selling, general and administrative expenses totaled $72.7 million, or 14.1% of total revenue, improving 40 basis points from a year earlier. Selling expenses were $44.1 million, or 8.6% of revenue, as LGI increased spending to generate leads. General and administrative expenses were $28.6 million, or 5.5% of revenue, compared with 6% a year ago. → Why Rare Earth Processing Could Be the Real 2027 Opportunity LGI generated adjusted EBITDA of $58.7 million, equal to 11.4% of total revenue. Net income was $27 million, or $1.16 per basic and diluted share, while pretax income totaled $36.6 million. Net orders declined 4.8% to 1,039 homes in the second quarter from 1,091 homes a year earlier. Chief Financial Officer and Treasurer Charles Merdian said the decline reflected affordability pressures, higher mortgage rates and elevated energy costs related to the conflict in the Middle East. The cancellation rate increased to 49.4% from 32.7% in the prior-year period. Merdian said a broader pool of buyers needed more time to complete the purchase process. Despite the order decline, LGI ended June with backlog of 1,298 homes valued at $525.5 million, increases of 60.6% and 63%, respectively, from a year earlier. Lipar said the larger backlog reflects continued interest in homeownership as well as a longer buying process for customers navigating financing qualification requirements. LGI averaged 3.2 total closings per active community per month during the quarter. Its strongest markets by that measure were Atlanta, Southern California, Charlotte, Las Vegas and Albuquerque. The company ended the quarter with 151 active communities, up 3.4% from a year earlier and already at the low end of its full-year target range. Lipar said LGI expected to report 152 active communities following its July results, which would represent the highest active community count in company history. Management said land-market conditions have begun to improve, with more opportunities becoming available and transaction economics improving. The company is seeing smaller projects and projects later in the development process, which can offer greater certainty around costs and demand. However, Merdian said most newly evaluated land opportunities would likely affect community count in 2028 because development timelines remain about 12 to 18 months. Management also said finished or partially developed lot opportunities can be more immediately accretive because they can be converted more quickly. As of June 30, LGI owned and controlled 57,406 lots, down 11.4% from a year earlier and 2.7% sequentially. The company said this was its sixth consecutive quarter of reducing its lot position while concentrating capital in markets where demand and returns support investment. LGI reduced total debt by about $129 million from the prior quarter and approximately $160 million from a year earlier. The company ended June with just under $1.6 billion of debt, including $449 million outstanding on its revolver. Its debt-to-capital ratio declined 220 basis points sequentially to 42.6%, while net debt-to-capital fell 240 basis points to 41.6%. Liquidity totaled $468 million, consisting of $61 million of cash and $406.9 million available under the company’s credit facility. Stockholders’ equity exceeded $2.1 billion, and book value per share was $91.73. Pending verification of fundings, LGI said it expected to report 425 July closings, up 11.5% from a year earlier, bringing year-to-date closings to 2,781 homes. Management maintained its full-year closing outlook of 4,600 to 5,400 homes and expects to finish the year with 150 to 160 active communities. The company raised its full-year average selling price outlook by $5,000 at both ends of the prior range to $360,000 to $370,000. It also lifted expected homebuilding gross margin by 50 basis points to 19% to 21% and adjusted homebuilding gross margin to 22.5% to 24.5%. LGI continues to expect SG&A to equal 15% to 16% of revenue. LGI Homes, Inc (NASDAQ: LGIH) is a residential homebuilder primarily focused on serving first-time and first-time move-up homebuyers in the United States. The company specializes in the acquisition, development and sale of affordable single-family homes and townhomes. LGI Homes operates through an integrated model that encompasses land sourcing, lot development, home construction, and post-closing customer support including warranty services. In addition to its core homebuilding activities, LGI Homes offers ancillary services to streamline the homebuying process for its customers. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "LGI Homes Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Affordable single-family home construction company LGI Homes (NASDAQ:LGIH) will be reporting earnings this Tuesday before the bell. Here’s what investors should know. LGI Homes missed analysts’ revenue expectations last quarter, reporting revenues of $319.7 million, down 9% year on year. It was a mixed quarter for the company, with a beat of analysts’ EPS estimates. Is LGI Homes a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members. This quarter, the market is expecting LGI Homes’s revenue to be flat year on year, improving from the 19.8% decrease it recorded in the same quarter last year. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. LGI Homes has missed Wall Street’s revenue estimates multiple times over the last two years. Looking at LGI Homes’s peers in the home builders segment, some have already reported their Q2 results, giving us a hint as to what we can expect. PulteGroup’s revenues decreased 9.6% year on year, beating analysts’ expectations by 1.1%, and Meritage Homes reported a revenue decline of 13.8%, falling short of estimates by 0.9%. PulteGroup’s stock price was unchanged after the results, while Meritage Homes was down 1.1%. Read our full analysis of PulteGroup’s results here and Meritage Homes’s results here. In the last year or so, investors have shifted their focus from one macro dynamic to the next (AI disintermediation and AI investment to geopolitical conflict, interest rates, and the health of the wider economy). While some of the home builders stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 5% on average over the last month. LGI Homes is down 8.7% during the same time and is heading into earnings with an average analyst price target of $93 (compared to the current share price of $54.57). WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it. This is what the early days of Palantir looked like before it became a giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE.