TacticScaleWhat LGI Homes Does & How It Makes Money (LGIH)
Updated October 2026 · reflects LGI Homes's latest reported financials
U.S. homebuilder focused on affordable entry-level single-family homes. It makes money by building and selling new homes, mainly to individual buyers under the LGI Homes and Terrata Homes brands.
How LGI Homes makes money
It makes money by building and selling new homes, mainly to individual buyers under the LGI Homes and Terrata Homes brands. It also earns revenue from wholesale bulk sales of homes to institutional single-family rental investors.
What LGI Homes does
LGI Homes, Inc. is a U.S. residential homebuilder founded in 2003 and headquartered in The Woodlands, Texas. It designs, builds, and sells new attached and detached homes, focused mainly on entry-level buyers. It also offers active adult homes under the LGI Homes brand and luxury homes under the Terrata Homes brand. Besides selling to individual buyers, the company has a wholesale business that sells homes in bulk to large institutions that own single-family rental homes. It operates in 21 states, including Texas, Arizona, Florida, Georgia, the Carolinas, Colorado, and states in the Pacific Northwest and Mid-Atlantic, which makes its results closely tied to U.S. housing demand, especially among first-time buyers.
Products & services
- LGI Homes entry-level homes
- LGI Homes active adult communities
- Terrata Homes luxury homes
- Attached and detached single-family homes
- Wholesale bulk home sales to rental investors
What is LGI Homes worth?
On an owner-earnings DCF, LGI Homes's most-likely value is about $84 versus a recent price near $44 (92% below fair value). But TacticScale only calls a stock undervalued when the price sits below its conservative no-growth floor (~$53) with a margin of safety — so the honest verdict here is “Deeply discounted.” Fair value earns its keep only at the extremes, not in the wide middle.
On the financials alone, $44 is below even the no-growth floor ($53); the market's discount — expectations and sentiment beyond the numbers — is pricing in ≈ -2.7%/yr. A bargain only if that pessimism is overdone.
⚠ High leverage — net debt is 7.5× annual cash flow. Net debt is subtracted from this fair value, but refinancing at higher rates, principal timing, and share dilution aren’t modeled — the equity can be worth far less if cash flow weakens.
Analysis, not advice. Fair value is a margin-of-safety estimate from a deterministic owner-earnings DCF, not a price target or recommendation. See the full breakdown →
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