2024-04-17 05:50:53 ET
Summary
- LGI Homes has experienced relatively material share price volatility over the past 12 months as a result of broader macro trends like interest rates.
- While sales are subject to the negative effects of such macro factors, there's a long-term growth opportunity for LGI through increased absorption rates and community count.
- I think LGIH could reasonably be in the mid-to-upper-$100 per share territory, particularly considering a likely release of inventory driving increased cash flow.
Introduction
LGI Homes ( LGIH ) has seen a relatively good amount of share price volatility over the past 12 months going from low-$100/share to over $130/share down to mid-$80/share, back up to over $130/share, and now down to mid-$90/share. I can't say I'm totally surprised - my casual observations have been that homebuilders are more volatile than general, trading largely with "macro" factors like interest rates....
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For further details see:
LGI Homes: Short-Term Uncertainty, Long-Term Optimism