LGI Homes, Inc. Announces Record December, 4th Q

LGI Homes, Inc. Announces Record December, 4th Quarter, and Year End 2017 Home Closings and 2017 Year End Earnings Conference Call

Impressive stuff…

https://finance.yahoo.com/news/lgi-homes-inc-announces-recor…

THE WOODLANDS, Texas, Jan. 04, 2018 (GLOBE NEWSWIRE) – LGI Homes, Inc. (LGIH) today announced an all-time record for closings during a single month with 770 homes closed in December 2017, representing year-over-year growth of 64.9%. In addition, the Company announced record-breaking quarterly home closings of 1,844 during the fourth quarter of 2017 compared to 1,139 home closings in the fourth quarter of 2016, a 61.9% increase year-over-year. The Company had 5,845 home closings in 2017 surpassing its previous annual record of 4,163 home closings in 2016 by 40.4%.

As of the end of December 2017, the Company had 78 active selling communities.

“We are extremely pleased with our record setting performance,” said Eric Lipar, LGI Homes Chairman and CEO. “We continue to see robust demand for homeownership in our markets and uphold a positive outlook for 2018. Assuming that general economic conditions, including interest rates and mortgage availability, in 2018 are similar to those in the fourth quarter of 2017, we believe we will close between 6,000 and 7,000 homes in 2018 and end the year with between 85 and 90 active communities.”

10 Likes

That is pretty darn impressive… blew away my expectations and they were high. Glad I bought more on the post hurricane dip… what a stock this has been over the last 9 months.

MC

1 Like

With apologies to Elon, 770 closings is ludicrous. 9.9 absorption rate. It almost makes modeling 2018 impossible.

It increases my 2017 by 100 closings and 2017 eps from $4.99 to $5.08 or share price of $76.15 at 15 p/e. Now wait for January closings to see if they are normal for that month. Earlier this week I did make a 2018 estimate using 5% increase in average selling price, 12% improvement due to tax and 15% increase in closings. That gave $6.75 per share or $101 at 15 p/e.

That also matches their 90 communities top end forecast and 7000 homes at this year’s 6.8 average absorption rate. Certainly worth a hold and buy on any weakness that we are lucky enough to find, IMO.

KC

7 Likes

770 homes is 1.03 homes/hour, every hour of every day for the month of December. Start to finish.

Dig
Form
Pour
Strip
Frame
Dry-in
Side
Roof
Insulate
Doors
Windows
Sheetrock
Trim
Flooring
Paint
Plumbing
HVAC
Electrical
Landscape
Fence
Address plaque and doorbell :slight_smile:

6 Likes

The Company had 5,845 home closings in 2017 surpassing its previous annual record of 4,163 home closings in 2016 by 40.4%…

we believe we will close between 6,000 and 7,000 homes in 2018."

That’s significant growth deceleration right? They did 40% increased home sales in 2017 and are projecting between 3 and 20 percent in 2018. Maybe ASP goes up a bit but still… the Dec numbers were awesome but that sentence concerns me greatly. I guess with a PE of 18 maybe it’s not so bad, but seems to me they are signalling that they will not grow as much this year. I don’t think they have sandbagged too much in the past. I guess the rosy scenario is they book 7,500 homes with an ASP up 10%, that’d be 41% revenue growth.

Am I reading it wrong? Sold half my shares this morning. Perplexed why the stock is up. Thanks.

That’s significant growth deceleration right? They did 40% increased home sales in 2017 and are projecting between 3 and 20 percent in 2018. Maybe ASP goes up a bit but still… the Dec numbers were awesome but that sentence concerns me greatly. I guess with a PE of 18 maybe it’s not so bad, but seems to me they are signalling that they will not grow as much this year. I don’t think they have sandbagged too much in the past. I guess the rosy scenario is they book 7,500 homes with an ASP up 10%, that’d be 41% revenue growth.

Hi Utah Chris,
Well they forecast 4000 to 4700 for this year and closed 5845.
Saul

2 Likes

Ahh my statement about not sandbagging is wrong then. I get it now. Thank you Saul.

that’d be 41% revenue growth.

Not too shabby for a company with a PE in the teens.

Bear

How many people here have actually looked at their home page? Impressive. What sets them apart imo is also helping people to afford a decent house at a reasonable price. Renting options as well. In fact the whole package if one qualifies. Take a look at where their communities are positioned and the huge further potential to fill spaces on the map.

https://www.lgihomes.com/

1 Like