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ZYBERNO

Stock Report

Updated Aug 31, 2026

LGI HOMES, INC. (LGIH)

Industrial • NASDAQ

$57.50

Professional Investment Analysis

ZYBERNO SCORE →

Is it a great business? Is it getting better?

29.0/100

POOR BUSINESS

LGI HOMES, INC. (LGIH) scores 29/100 — concerning metrics indicating significant structural or financial risks.

📊 How is the Zyberno Score calculated? +

The Zyberno Score answers one question: "Is this a quality business worth owning?" It's a 0-100 investment grade that evaluates business fundamentals across four critical dimensions, based on principles from Warren Buffett, Benjamin Graham, Peter Lynch, and Charlie Munger.

The 4 Core Categories (25 points each):

1. PROFITABILITY (25 pts)

Metrics: ROE, ROIC, Net Margin, Operating Margin
Thresholds: ROE >20% excellent • ROIC >20% excellent • Net Margin >20% excellent • Operating Margin >25% excellent

2. FINANCIAL STRENGTH (25 pts)

Metrics: Debt-to-Equity, Current Ratio, Interest Coverage, Altman Z-Score
Thresholds: D/E <0.3 excellent • Current Ratio >2.5 excellent • Interest Coverage >10x excellent • Altman Z >3.0 safe

3. CASH FLOW QUALITY (25 pts)

Metrics: Free Cash Flow, OCF vs Net Income, FCF Margin
Thresholds: Positive & growing FCF excellent • OCF/NI >1.2x excellent (cash earnings exceed accounting)

4. GROWTH & CONSISTENCY (25 pts)

Metrics: Revenue Growth, Net Income Growth, FCF Growth, Piotroski F-Score
Thresholds: Growth via log-linear regression • Piotroski 8-9 excellent, 6-7 good

Score Interpretation:

75-100

GREAT BUSINESS

65-74

GOOD BUSINESS

50-64

AVERAGE BUSINESS

30-49

WEAK BUSINESS

0-29

POOR BUSINESS

→ View full LGIH quality analysis & detailed breakdown

VALUATION SIGNAL

MARGIN OF SAFETY

Is this stock cheap or expensive relative to what the business has historically generated for owners?

Margin of Safety unavailable — insufficient data for the owner-earnings DCF.

BRINA GAP ↗

Is the market underestimating or overestimating what this business is capable of going forward?

-9.4%

Market Overestimates

💰 How is Margin of Safety calculated? +

Margin of Safety measures how much discount or premium you're paying relative to a stock's intrinsic value. It's Benjamin Graham's core principle: the larger the margin, the lower your downside risk.

Formula: (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100%

How We Calculate Intrinsic Value (DCF Method):

Step 1: Calculate current Owner Earnings (OCF − Maintenance CapEx)

Step 2: Calculate company-specific growth rate using log-linear regression on 16 quarters of Owner Earnings

Step 3: Project 10 years forward using the calculated growth rate

Step 4: Discount each year's cash flow to present value using 10% discount rate

Step 5: Calculate terminal value using 3% perpetual growth rate

Step 6: Sum all discounted cash flows = Intrinsic Value

What The Percentages Mean:

+50% or more

EXCELLENT — Very undervalued

+25% to +50%

GOOD — Attractive discount

0% to +25%

FAIR — Reasonable value

0% to -25%

CAUTION — Slight premium

-25% or worse

POOR — Overvalued

"Price is what you pay, value is what you get." — Warren Buffett

→ View full LGIH valuation analysis · → View full LGIH Brina Gap analysis

📈 How is Brina Gap calculated? +

Brina Gap measures the difference between the growth a business can fundamentally sustain and the growth the market is already pricing in.

Formula: Fundamental Growth Rate − Market-Implied Growth Rate

The Two Components:

Fundamental Growth Rate = ROIC × Reinvestment Rate

What the business can sustainably grow at based on how much it reinvests and what return it earns on that capital. Grounded in historical financials.

Market-Implied Growth Rate = Reverse DCF

The growth rate the current Enterprise Value implicitly assumes. Calculated by back-solving a 10-year DCF model (10% WACC, 3% terminal growth) until the present value of projected cash flows equals EV.

What The Gap Means:

Gap > +5% Market Underestimates — potential upside

+2% to +5% Slight Underestimate

-2% to +2% Fairly Priced — market consensus matches fundamentals

-5% to -2% Slight Overestimate

Gap < -5% Market Overestimates — price embeds optimism fundamentals don't support

A positive gap (market underestimates) combined with a positive Margin of Safety is the strongest combined signal — the business is both cheap historically and forward economics are stronger than the price suggests.

Critical Financial Health Indicators

Return on Equity (Profitability):CRITICAL (3.1%)

Debt-to-Equity (Solvency Risk):EXCELLENT (0.00x)

Operating Margin (Operational Efficiency):POOR (4.5%)

Return on Capital (Capital Efficiency):CRITICAL (2.7%)

📊 Valuation Trilogy

Three interconnected metrics for complete valuation analysis

Click any metric for full methodology and detailed analysis

Zyberno's Verdict

LGI HOMES, INC. (LGIH) stock report — Zyberno Score 29/100 (POOR BUSINESS). Full financial analysis on Zyberno.

According to Zyberno's DCF model, LGI HOMES, INC. (LGIH) shows a Brina Gap of -9.4%, which weakens the case: based on the company's ROIC (2.7%) and reinvestment rate (-6.1%), the business can fundamentally grow at -0.2% — but the current enterprise value implies the market expects 9.3%.

Over the trailing twelve months, LGIH generated -$69.16M in Owner Earnings. Capital was deployed as follows: $789.00K invested in capital expenditures. Reinvestment rate: -6.1%.

DIVISION I: EXECUTIVE SUMMARY

A. Market Valuation

Market Price & Capitalization (2)

Current Price:57.50

Market Cap:$1.33B

Valuation Multiples (4)

P/E Ratio:

20.25x

📊 Click to view full LGIH P/E analysis →

P/B Ratio:0.63x

P/S Ratio:0.78x

Peg Ratio:-999.00x

Enterprise Metrics (2)

Enterprise Value:$1.29B

Ev Ebitda Ratio:15.98x

Price Action & Momentum (3)

12-1 Momentum:

+13.3% (66th pctile)

📈 Click to view full LGIH Momentum analysis →

Momentum Percentile:66 / 100

% of 52-Week High:82.7%

B. Profitability Assessment

Return Metrics (7)

ROE:

3.1%

📊 Click to view full LGIH ROE analysis →

ROA:1.7%

Roic:

2.7%

📊 Click to view full LGIH ROIC analysis →

Reinvestment Rate:-6.1%

Fundamental Growth Rate (g):-0.2%

Market-Implied Growth Rate:9.3%

Brina Gap:

-9.4%

☷ Click to view full LGIH Brina Gap analysis →

Margin Analysis (3)

Operating Margin Ttm:4.5%

Net Margin Ttm:3.9%

Ebitda Margin:4.7%

TTM Performance (3)

Gross Margin Ttm:19.4%

Operating Margin Ttm:4.5%

Net Margin Ttm:3.9%

Yield Metrics (2)

Earnings Yield:$4.94

Dividend Yield:0.0%

C. Log-Linear Regression Growth Trends

Earnings Surprise (SUE) (3)

Earnings Surprise (SUE):

+0.56

📊 Click to view full LGIH Earnings Surprise analysis →

EPS Surprise vs Expected:124.7%

Latest Earnings Filed:2026-08-04

Revenue Growth (Linear) (1)

Revenue Growth Rate (Linear):-8.1%

Earnings Growth (Linear) (1)

Net Income Growth Rate (Linear):-38.4%

Cash Flow Growth (Linear) (1)

Operating Cash Flow Growth Rate (Linear):35.3%

Operating Growth (Linear) (1)

Operating Income Growth Rate (Linear):-25.3%

D. Financial Stability

Liquidity Ratios (3)

Current Ratio:2.19x

Quick Ratio:2.19x

Cash Ratio:0.03x

Leverage Analysis (3)

Debt To Equity Ttm:0.00x

Debt-to-Equity Ratio:0.00x

Debt To Ebitda:0.07x

Coverage Ratios (1)

Times Interest Earned:-999.00

Capital Structure (4)

Working Capital:2,132,656,000.00

Cash And Cash Equivalents:50,514,000.00

Long Term Debt:$4.60M

Net Debt:-$44.93M

DIVISION II: FINANCIAL STATEMENTS ANALYSIS

A. Income Statement Analysis

Revenue Components (2)

Revenue TTM: $1.71B

Linear Growth: -8.1%

📊 Click to view full LGIH Revenue analysis & methodology →

Cost Of Revenue Ttm:$1.38B

Profitability Breakdown (2)

Gross profit TTM: $330.85M

Linear Growth: -13.3%

📊 Click to view full LGIH Gross Profit analysis & methodology →

Operating income TTM: $76.01M

Linear Growth: -25.3%

📊 Click to view full LGIH Operating Income analysis & methodology →

Bottom Line Performance (3)

Net income TTM: $66.17M

Linear Growth: -38.4%

📊 Click to view full LGIH Net Income analysis & methodology →

Income Before Tax:$91.63M

Ebitda Ttm:80,659,000.00

Operating Expenses (5)

Operating Expenses:0.00

R And D Expense:0.00

Sga Expense:107,450,000.00

Income Tax Expense:$25.46M

Interest Expense:0.00

Expense Ratios (3)

R And D To Revenue Percentage:0.0%

Sga To Revenue Percentage:20.8%

Ebitda Margin:4.7%

B. Balance Sheet Analysis

Asset Composition (5)

Total Assets:$3.92B

Current Assets:$3.92B

Ppe Net:149,579,000.00

Goodwill:12,018,000.00

Intangible Assets:$0.00

Liability Structure (4)

Total Liabilities:1,785,937,000.00

Current Liabilities:1,785,937,000.00

Long Term Debt:$4.60M

Short Term Debt:$979.00K

Equity & Capital (3)

Equity:$2.13B

Retained Earnings:$2.19B

Common Stock:250,000,000.00

Working Capital Items (3)

Accounts Receivable:33,850,000.00

Inventory:0.00

Accounts Payable:0.00

Special Items (2)

Contract Liabilities:6,161,000.00

Stock Based Compensation:3,418,000.00

C. Cash Flow Analysis

Operating Activities (2)

Operating cash flow TTM: -$68.37M

Linear Growth: 35.3%

-$69.16M

Investment Activities (2)

Investing Cash Flow:$6.44M

Capital Expenditures Ttm:789,000.00

Financing Activities (3)

Financing Cash Flow:$48.72M

Dividends Paid Ttm:0.00

Stock Repurchase:0.00

Capital Transactions (3)

Common Stock Issuance:1,242,000.00

Long Term Debt Issuance:$0.00

Long Term Debt Repayments:$0.00

Non-Cash Items (1)

Depreciation Amortization Ttm:4,651,000.00

DIVISION III: OPERATIONAL METRICS

A. Per Share Analysis

Earnings Per Share (3)

EPS (Basic TTM):2.85

Eps diluted TTM: $2.84

Linear Growth: -38.3%

📊 Click to view full LGIH EPS analysis & methodology →

Earnings Per Share Ttm:$2.85

Revenue & Cash Per Share (2)

Sales Per Share Ttm:73.55

Operating Cash Flow Per Share:-$6.03

Book Value & Capital (2)

Book Value Per Share:$91.92

Cash Per Share:2.18

Dividend Policy (1)

Dividend Payout Ratio:0.00x

B. Operational Efficiency

Asset Utilization (2)

Asset Turnover Ttm:0.43x

Working Capital Turnover Ttm:0.80x

Receivables Management (2)

Receivables Turnover Ttm:50.41x

Days Sales Outstanding Ttm:7.24

Inventory Management (2)

Inventory Turnover Ttm:-999.00x

Days Inventory Outstanding Ttm:-999.00

Payables & Cash Cycle (2)

Days Payable Outstanding:-999.00

Cash Conversion Cycle:7.24

C. Quality & Risk Metrics

Financial Quality Scores (2)

Financial Strength Score:100.00

Quality Score:65.00

Market Metrics (2)

Beta:0.00x

Volatility Category:unknown

DIVISION IV: INVESTMENT ANALYSIS

A. Value Investment Framework

Owner Earnings Analysis (1)

-$69.16M

Damodaran Growth Analysis (4)

Reinvestment Rate:-6.1%

Fundamental Growth Rate (g):-0.2%

Market-Implied Growth Rate:9.3%

Brina Gap:

-9.4%

☷ Click to view full LGIH Brina Gap analysis →

B. Log-Linear Regression Growth Analysis

Growth Rates (Log-Linear Regression) (3)

Revenue Growth Rate (Linear):-8.1%

Net Income Growth Rate (Linear):-38.4%

Operating Income Growth Rate (Linear):-25.3%

Cash Flow Growth Rates (1)

Operating Cash Flow Growth Rate (Linear):35.3%

Other Growth Rates (2)

Gross Profit Growth Rate (Linear):-13.3%

Book Value Growth Rate (Linear):9.5%

C. Company Profile & Context

Corporate Information (6)

Symbol:LGIH

Company Name:LGI HOMES, INC.

Sector:Industrial

Industry:Construction

Exchange:NASDAQ

Country:United States

Market Classification (3)

Market Cap Category:N/A

Price Category:high

Volume Category:N/A

Share Structure (3)

Shares Outstanding:23.20M

Shares Outstanding Basic:23.20M

Shares Outstanding Diluted:23.28M

Data Processing Info (3)

Processing Version:v3.0

Last Updated:2026-08-31 21:34:01 UTC

Data Timestamp:2026-08-31T21:34:01.624909