LGI Homes (LGIH)
Operating profit margin
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 212,146 | 233,255 | 390,107 | 547,698 | 364,710 |
| Revenue | US$ in thousands | 2,202,600 | 2,358,580 | 2,304,460 | 3,050,150 | 2,367,930 |
| Operating profit margin | 9.63% | 9.89% | 16.93% | 17.96% | 15.40% |
December 31, 2024 calculation
Operating profit margin = Operating income ÷ Revenue
= $212,146K ÷ $2,202,600K
= 9.63%
The operating profit margin for LGI Homes has shown varying trends over the period from December 31, 2020, to December 31, 2024.
In 2020, the operating profit margin stood at 15.40%, indicating the company generated $0.15 of operating profit for every $1 in revenue. This margin improved in 2021 to 17.96%, suggesting an increase in operating efficiency and profitability.
However, the operating profit margin dipped slightly in 2022 to 16.93%, potentially due to changes in operating costs or revenue streams. The most significant decline occurred in 2023, with the margin falling sharply to 9.89%. This could be a cause for concern as it indicates the company's operating expenses may have increased disproportionately compared to revenues during that period.
The trend continued in 2024 with a further decrease in the operating profit margin to 9.63%. This suggests that LGI Homes may be facing challenges in effectively managing its operating costs relative to its revenue generation.
Overall, fluctuations in LGI Homes' operating profit margin highlight the importance of closely monitoring operational efficiency and cost management to ensure sustained profitability and financial health.
Peer comparison
Dec 31, 2024