LGIH reported today, and it was a very, VERY, good report. Here are some of the results. Note that they had a PE of just 17 at yesterday’s close.
Revenue was up 87%. Note that that is revenue (!) Up 87%!
Diluted earnings were 76 cents. That was up 124% (!) from the year before.
Rate of growth of trailing earnings was 49.7%
Sale closings were up 68% from the year before.
Average sale price was up 12%.
And this is in a new home market that was supposed to have slowed down!?
I mentioned that their PE was just 17 at yesterday’s close. Well after factoring in their earnings, their new PE is under 14.
They just also reported their new home sales for October, the first month of the new quarter. They were only up 9.5% which is quite a slowdown, and certainly bears watching.
LGIH just also reported their new home sales for October, the first month of the new quarter. They were only up 9.5% which is quite a slowdown, and certainly bears watching.
I guess I worried unnecessarily about the October slowdown. In their conference call they reassured as follows:
Last November we closed only 165 compared to 241 in October and this year we expect November closings to increase over October, so we expect the November comparison to be up at least 60% year-over-year.
They also raised guidance for the full year for both revenue and earnings.
LGI boosted its full-year earnings guidance to a range of $2.45 to $2.65 a share from the previous range of $2.15 to $2.50 a share. The firm raised its outlook for home sales to a range of 3,250 to 3,400, up from the previous range of 3,000 to 3,300.
Burdened by student-loan debt, and with banks tightening lending standards in the aftermath of the financial crisis, first-time homebuyers haven’t exactly rushed into the market.
The labor market’s rebound has been slow in coming too, a drag on housing’s recovery. The jobless rate was 5.1% in September, though the labor participation rate hasn’t been this low in decades. Still, “demand for first-time homes is strong,” said Nela Richardson, chief economist at Redfin. “The demand in general is strong. There’s not a lot of supply out there.”
LGI Homes gets slightly less than half its total home sales in the Lone Star State, which is struggling due to weak oil prices.
The average home sales price rose 12.1% to $186,248. The adjusted gross margin as a percentage of home sales revenue was 27.5%, down from 28.3% in the year-earlier quarter.