Legacy Housing (LEGH) AI Stock Analysis

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Legacy Housing

(NASDAQ:LEGH)

71Outperform

Legacy Housing demonstrates strong financial performance with an impressive balance sheet and profitability. Recent earnings call highlights positive strategic adjustments and growth in net income and book value. However, technical indicators suggest caution due to downward momentum and moving averages being below current price levels. Valuation appears favorable with a low P/E ratio, although the absence of a dividend may deter some investors.

Legacy Housing (LEGH) vs. S&P 500 (SPY)

Market Cap

$575.49M

Dividend YieldN/A

Average Volume (3M)84.75K

Price to Earnings (P/E)9.6

Beta (1Y)0.87

Revenue Growth-2.62%

EPS Growth13.97%

CountryUS

Employees594

SectorConsumer Cyclical

Sector Strength63

IndustryResidential Construction

Share Statistics

EPS (TTM)2.49

Shares Outstanding24,129,362

10 Day Avg. Volume84,247

30 Day Avg. Volume84,752

Financial Highlights & Ratios

PEG Ratio0.68

Price to Book (P/B)N/A

Price to Sales (P/S)3.37

Price to Cash Flow (P/CF)19.70

P/FCF Ratio25.90

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$30.00

Price Target Upside25.79% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Legacy Housing Business Overview & Revenue Model

Company DescriptionLegacy Housing Corporation (LEGH) is a prominent manufacturer of manufactured homes and tiny houses in the United States. With a focus on affordability and quality, the company operates within the residential construction sector, catering primarily to customers seeking cost-effective housing solutions. Legacy Housing offers a diverse range of floor plans and customizable options, ensuring that their products meet various customer preferences and needs.

How the Company Makes MoneyLegacy Housing makes money primarily through the design, production, and sale of manufactured homes and tiny houses. Their revenue model includes direct sales to consumers, as well as wholesale transactions with independent retailers. Additionally, the company generates income by providing financing options to customers purchasing their homes, which can include both retail and wholesale financing solutions. Legacy Housing's earnings are further supported by their strategic partnerships with a network of independent dealers and distributors, expanding their market reach and customer base.

Legacy Housing Financial Statement Overview

Summary

Legacy Housing is financially strong with excellent profitability and a solid balance sheet. While cash flow has shown some volatility, recent improvements suggest better financial management. The company is well-positioned in the residential construction industry, although maintaining consistent revenue growth remains a challenge.

Income Statement

Positive

Legacy Housing demonstrates strong profitability with a consistent gross profit margin and net profit margin over the years. However, the revenue growth rate shows volatility, with a decline in recent years. The EBIT and EBITDA margins are healthy, reflecting efficient operations.

Balance Sheet

Very Positive

The company's balance sheet is robust, with a low debt-to-equity ratio indicating minimal leverage. Return on equity is impressive, showing effective use of shareholder funds. The equity ratio is high, highlighting a solid financial position with substantial equity backing the assets.

Cash Flow

Positive

Cash flow from operations has been inconsistent, with negative values in some years. However, the recent turnaround to positive free cash flow is promising. The operating cash flow to net income ratio is improving, but historical fluctuations warrant caution.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
184.19M	189.14M	257.01M	197.51M	176.72M
	Gross Profit
94.12M	89.45M	106.90M	83.46M	67.00M
	EBIT
63.61M	64.59M	78.02M	58.92M	47.60M
	EBITDA
78.63M	71.39M	84.30M	63.10M	51.09M
	Net Income Common Stockholders
61.64M	54.46M	67.77M	49.87M	37.99M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.15M	748.00K	11.23M	1.04M	768.00K
	Total Assets
534.19M	506.74M	436.81M	366.67M	338.62M
	Total Debt
1.40M	25.57M	5.32M	7.99M	36.17M
	Net Debt
247.00K	24.82M	2.50M	6.95M	35.41M
	Total Liabilities
40.24M	70.01M	54.71M	57.27M	79.42M
	Stockholders Equity
493.96M	436.74M	382.10M	309.39M	259.19M
Cash Flow		Free Cash Flow
26.78M	-21.25M	-5.49M	54.34M	-4.88M
	Operating Cash Flow
35.99M	-13.54M	-1.69M	60.30M	-2.04M
	Investing Cash Flow
-6.71M	-9.77M	9.08M	-31.94M	-2.72M
	Financing Cash Flow
-28.88M	21.23M	-5.61M	-28.08M	3.60M

Legacy Housing Technical Analysis

Technical Analysis Sentiment

Negative

Last Price23.85

Price Trends

50DMA

25.51

Negative

100DMA

25.25

Negative

200DMA

25.72

Negative

Market Momentum

MACD

-0.53

Positive

RSI

43.67

Neutral

STOCH

45.01

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LEGH, the sentiment is Negative. The current price of 23.85 is below the 20-day moving average (MA) of 24.92, below the 50-day MA of 25.51, and below the 200-day MA of 25.72, indicating a bearish trend. The MACD of -0.53 indicates Positive momentum. The RSI at 43.67 is Neutral, neither overbought nor oversold. The STOCH value of 45.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LEGH.

Legacy Housing Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CCS	73 Outperform	$1.81B	5.69	13.33%	1.81%	18.17%	30.51%
LEGH	71 Outperform	$575.49M	9.56	13.25%	―	-2.62%	13.97%
HOV	67 Neutral	$543.80M	2.77	33.63%	―	8.88%	19.66%
UHG	67 Neutral	$144.16M	3.09	262.89%	―	10.02%	-30.65%
BZH	61 Neutral	$568.83M	4.64	10.32%	―	12.27%	-22.28%
Sector *	59 Neutral	$11.48B	10.33	-0.21%	4.02%	1.19%	-15.83%
LGIH	50 Neutral	$1.33B	6.82	10.07%	―	-6.61%	-1.56%

* Consumer Cyclical Sector Average

Performance Comparison

LEGH

Legacy Housing

23.98

3.86

19.18%

BZH

Beazer Homes

18.45

-9.09

-33.01%

HOV

Hovnanian Enterprises

94.22

-39.83

-29.71%

LGIH

LGI Homes

57.23

-39.33

-40.73%

CCS

Century Communities

59.43

-21.88

-26.91%

UHG

United Homes Group

2.35

-4.06

-63.34%

Legacy Housing Earnings Call Summary

Earnings Call Date: Mar 12, 2025 | % Change Since: -3.64% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Positive

The earnings call reflected a generally positive outlook with significant gains in net income, book value, and interest income, despite challenges such as a decrease in product sales and gross profit margin. The company is making strategic adjustments and remains optimistic about future growth.

Highlights

Net Income Increase

Net income increased by 13.2% to $61.6 million in 2024 compared to 2023.

Book Value Growth

Legacy's book value per basic share outstanding increased by 13.9% from the year-end of 2023.

Interest Income Growth

Consumer MHP and dealer loans interest income increased by $3.8 million or 10.1% from 2023 to 2024.

Other Revenue Increase

Other revenue increased by $7.0 million or 106.3% from 2023 to 2024, driven by land sales.

Decrease in Selling, General, and Administrative Expenses

SG&A expenses decreased by $1.1 million or 4.4% in 2024 as compared to 2023.

Significant Increase in Other Income

Other income expense net increased by $8.3 million in 2024, driven by gains on sales and reversals of certain balance sheet liabilities.

GAAP Net Income Margins Improvement

GAAP net income margins increased to 33.5% in 2024 from 28.8% in 2023.

Lowlights

Decrease in Product Sales

Product sales decreased by $15.8 million or 10.9% in 2024 compared to 2023, mainly due to a decrease in unit volume shipped.

Gross Profit Margin Decline

Gross profit margin decreased to 30.4% in 2024 from 31.3% in 2023.

Challenges in Georgia Market

Georgia production is slower than desired, with the dealer side of the business lagging.

Company Guidance

During the Legacy Housing Corporation Full Year 2024 Earnings Call, several key metrics were highlighted. Product sales decreased by 10.9%, amounting to a $15.8 million decline primarily due to reduced unit volume in direct and inventory finance sales. Despite this, net revenue per product sold increased by 1.9% due to higher unit prices. Interest income from consumer MHP and dealer loans rose by 10.1%, or $3.8 million, driven by growth in loan portfolios. The consumer loan portfolio saw a $17.6 million increase, while the MHP loan portfolio grew by $24.5 million. Other revenue surged by 106.3%, mainly due to $8.9 million in land sales. Operating expenses fell by 4.4%, totaling a $1.1 million reduction, with warranty costs and consulting fees contributing to this decrease. Net income increased by 13.2% to $61.6 million, boosting basic earnings per share by 14.3%. The company ended 2024 with $1.1 million in cash, up from $0.7 million the previous year, and its book value per basic share rose by 13.9% to $20.40.

Legacy Housing Corporate Events

Executive/Board Changes

Legacy Housing Appoints Skyler Howton to Board

Neutral

Nov 18, 2024

Skyler M. Howton has been appointed to the Company’s Board of Directors, filling a vacancy left by Francisco J. Coll. With a robust legal background and leadership roles in Dallas, she will serve on key committees and stand for election at the 2024 Annual Shareholders’ Meeting. Howton’s appointment aligns with SEC and NASDAQ independence standards, and she will receive compensation similar to other non-employee directors.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.