I think you missed the point
I don’t think so. Like I suggested if you do the lot inventory as years of supply you will see there is no significant variance from the industry when you adjust for LGIH growth. In your lot supply you have to separate optioned lots vs owned lots, just to understand how much they really invested on land inventory. Also, as they geographically expand there could be short-term spike on the lots as they build inventory in a new geography.
Next, their wip or homes under development inventory, typically LGIH does spec build but closes the sales very fast. Therefore there inventory used to be 3 months of closing and now the sales process is slightly getting drawn out (takes more than 3 months to close the sale). They had a bit of absorption issues in their southern communities but that will fix itself over time, but the sale to close will get drawn out and slowly gravitate towards industry norm of 5 to 6 months. The good rule of thumb for the WIP inventory should be about 4 to 4.5 months of closing. For ex: this is 6 months for DHI excluding express homes and use to be 8 months for Toll brothers.
In a nutshell I am not worried about LGIH inventory, debt levels. The company is experiencing mild growing pains (which shows slightly lower absorption rate) and given time, management will make necessary adjustments. The growth slowing is a natural and the valuation (price) will either stagnate or gently decline towards the book value. I would say 1.0 to 1.3x price to book value is a good level and currently LGIH is trading at a premium.