Texas Capital has initiated coverage on Legacy Housing (LEGH, Financial), assigning a Buy rating and setting a price target of $29. Legacy Housing is a prominent manufacturer of prefabricated homes based in the United States, operating three production facilities situated in Texas and Georgia.
According to the firm's analyst, under the guidance of Duncan Bates, Legacy has successfully reinforced its leadership team, expanded its sales strategies, enhanced quality control measures, and recently streamlined its product offerings. These strategic moves have positioned Legacy for substantial growth, increased profitability, and accelerated the creation of book value.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 3 analysts, the average target price for Legacy Housing Corp (LEGH, Financial) is $30.33 with a high estimate of $34.00 and a low estimate of $26.00. The average target implies an upside of 37.57% from the current price of $22.05. More detailed estimate data can be found on the Legacy Housing Corp (LEGH) Forecast page.
Based on the consensus recommendation from 3 brokerage firms, Legacy Housing Corp's (LEGH, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Legacy Housing Corp (LEGH, Financial) in one year is $17.68, suggesting a downside of 19.82% from the current price of $22.05. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Legacy Housing Corp (LEGH) Summary page.
LEGH Key Business Developments
Release Date: May 13, 2025
- Product Sales: Decreased by $6.5 million or 21.2% during Q1 2025 compared to Q1 2024.
- Net Revenue per Product Sold: Increased by 23.1% in Q1 2025 compared to Q1 2024.
- Consumer Loan Portfolio: Increased by $20.3 million between March 31, 2024, and March 31, 2025.
- MHP Loan Portfolio: Increased by $20.1 million between March 31, 2024, and March 31, 2025.
- Dealer Finance Notes: Decreased by $2.4 million between March 31, 2024, and March 31, 2025.
- Other Revenue: Decreased by $1.0 million or 59.2% during Q1 2025 compared to Q1 2024.
- Cost of Product Sales: Decreased by $3.3 million or 16.0% during Q1 2025 compared to Q1 2024.
- Gross Profit Margin: 29.2% of product sales in Q1 2025, down from 33.6% in Q1 2024.
- Selling, General, and Administrative Expenses: Increased by $0.4 million or 6.9% during Q1 2025 compared to Q1 2024.
- Net Income: Decreased by 32.1% to $10.3 million in Q1 2025 compared to Q1 2024.
- Basic Earnings Per Share: Decreased by 30.6% to $0.43 in Q1 2025 compared to Q1 2024.
- Cash: $3.4 million as of March 31, 2025, compared to $1.1 million as of December 31, 2024.
- Book Value Per Basic Share: $20.87 as of March 31, 2025, an increase of 13.1% from Q1 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Net revenue per product sold increased by 23.1% compared to the same period in 2024, driven by a shift towards higher retail prices.
- Consumer loan portfolio increased by $20.3 million, and MHP loan portfolio increased by $20.1 million, indicating growth in financing activities.
- Book value per basic share outstanding increased by 13.1% from the same period in 2024, reflecting improved shareholder equity.
- Production in Texas is up, and the company is working to extend its backlog, indicating potential future sales growth.
- Retail loan originations in April 2025 were the highest in one month since going public, showing strong demand in the retail sector.
Negative Points
- Product sales decreased by $6.5 million or 21.2% during the three months ended March 31, 2025, compared to the same period in 2024.
- Gross profit margin decreased to 29.2% from 33.6% in the same period in 2024, indicating reduced profitability.
- Net income decreased by 32.1% to $10.3 million in the first quarter of 2025 compared to the first quarter of 2024.
- Selling, general, and administrative expenses increased by $0.4 million or 6.9%, impacting overall profitability.
- Other income decreased by $0.6 million or 35.5%, primarily due to a decrease in non-operating interest income.
