Winners And Losers Of Q1: LGI Homes (NASDAQ:LGIH) Vs The Rest Of The Home Builders Stocks
Let's dig into the relative performance of LGI Homes (NASDAQ:LGIH) and its peers as we unravel the now-completed Q1 home builders earnings season.
Traditionally, homebuilders have built competitive advantages with economies of scale that lead to advantaged purchasing and brand recognition among consumers. Aesthetic trends have always been important in the space, but more recently, energy efficiency and conservation are driving innovation. However, these companies are still at the whim of the macro, specifically interest rates that heavily impact new and existing home sales. In fact, homebuilders are one of the most cyclical subsectors within industrials.
The 10 home builders stocks we track reported a slower Q1. As a group, revenues were in line with analysts' consensus estimates.
While some home builders stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.4% since the latest earnings results.
Based in Texas, LGI Homes (NASDAQ:LGIH) is a homebuilding company specializing in constructing affordable, entry-level single-family homes in desirable communities across the United States.
LGI Homes reported revenues of $351.4 million, down 10.1% year on year. This print fell short of analysts' expectations by 5%. Overall, it was a disappointing quarter for the company with a significant miss of analysts' adjusted operating income estimates.
'During the quarter, we continued to see strong demand for new homes,' said Eric Lipar, Chairman and Chief Executive Officer of LGI Homes.
Unsurprisingly, the stock is down 3.4% since reporting and currently trades at $57.21.
Read our full report on LGI Homes here, it's free.
Named 'America's Most Trusted Home Builder' in 2019, Taylor Morrison Home (NYSE:TMHC) builds single family homes and communities across the United States.
Taylor Morrison Home reported revenues of $1.90 billion, up 11.5% year on year, outperforming analysts' expectations by 5.7%. The business had a strong quarter with a solid beat of analysts' EBITDA estimates.
Taylor Morrison Home pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. However, the results were likely priced into the stock as it's traded sideways since reporting. Shares currently sit at $58.94.
Is now the time to buy Taylor Morrison Home? Access our full analysis of the earnings results here, it's free.
The first homebuilder to be listed on the NYSE, KB Home (NYSE:KB) is a homebuilding company targeting the first-time home buyer and move-up buyer markets.
KB Home reported revenues of $1.39 billion, down 5.2% year on year, falling short of analysts' expectations by 6.5%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts' expectations.
KB Home delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 12% since the results and currently trades at $54.39.
Read our full analysis of KB Home's results here.
Established in 2015 following a spinoff from Masco Corporation, TopBuild (NYSE:BLD) is a distributor and installer of insulation and other building products.
TopBuild reported revenues of $1.23 billion, down 3.6% year on year. This result met analysts' expectations. Aside from that, it was a satisfactory quarter as it also logged an impressive beat of analysts' adjusted operating income estimates.
The stock is up 1.6% since reporting and currently trades at $296.42.
Read our full, actionable report on TopBuild here, it's free.
Established in 2009 in California, Tri Pointe Homes (NYSE:TPH) is a United States homebuilder recognized for its innovative and sustainable approach to creating premium, life-enhancing homes.
Tri Pointe Homes reported revenues of $740.9 million, down 21.1% year on year. This number beat analysts' expectations by 4%. Overall, it was a strong quarter as it also produced an impressive beat of analysts' EPS estimates and a solid beat of analysts' EBITDA estimates.
Tri Pointe Homes had the slowest revenue growth among its peers. The stock is up 2.8% since reporting and currently trades at $31.69.
Read our full, actionable report on Tri Pointe Homes here, it's free.
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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