LGI Homes (LGIH)
Profitability ratios
Return on sales
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 8.49% | 8.73% | 9.59% | 13.44% | 16.12% | 21.44% | 23.70% | 25.04% | 26.82% | 27.00% | 26.72% | 26.21% | 25.47% | 24.18% | 23.87% | 23.77% | 23.75% | 24.00% | 24.34% | 24.92% |
| Operating profit margin | 9.89% | 9.57% | 10.45% | 14.27% | 16.93% | 18.75% | 18.92% | 18.03% | 17.96% | 18.18% | 17.46% | 16.54% | 15.40% | 13.64% | 13.32% | 12.98% | 12.38% | 12.00% | 12.00% | 12.58% |
| Pretax margin | 11.10% | 10.72% | 11.96% | 15.63% | 18.14% | 19.66% | 18.89% | 17.96% | 17.80% | 17.99% | 17.64% | 16.66% | 15.53% | 13.78% | 13.49% | 13.22% | 12.61% | 12.26% | 12.05% | 12.53% |
| Net profit margin | 8.45% | 8.10% | 9.44% | 12.24% | 14.17% | 15.43% | 14.67% | 14.14% | 14.09% | 14.45% | 15.13% | 14.54% | 13.68% | 12.15% | 10.50% | 10.13% | 9.72% | 9.43% | 9.31% | 9.67% |
LGI Homes Inc's profitability ratios have shown a general decline over the past quarters. The gross profit margin has decreased from 28.06% in Q4 2022 to 22.99% in Q4 2023, indicating a decrease in the company's ability to generate a profit on its direct costs. The operating profit margin has also shown a downward trend, from 16.93% in Q4 2022 to 9.89% in Q4 2023, suggesting a reduction in profitability after accounting for operating expenses.
Furthermore, the pretax margin has decreased from 18.14% in Q4 2022 to 11.10% in Q4 2023, indicating a decline in the company's ability to generate profit before taxes. The net profit margin has followed a similar trend, declining from 14.17% in Q4 2022 to 8.45% in Q4 2023, suggesting a decrease in the company's profitability after accounting for all expenses and taxes.
Overall, the decreasing trend in LGI Homes Inc's profitability ratios raises concerns about the company's ability to maintain and enhance its profitability in the future. Management may need to review cost structures, operational efficiencies, and pricing strategies to improve profitability and sustain long-term growth.
Return on investment
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.84% | 6.42% | 7.22% | 10.33% | 12.48% | 15.76% | 18.58% | 20.08% | 23.29% | 26.56% | 24.84% | 23.73% | 19.97% | 16.06% | 16.48% | 15.14% | 13.66% | 12.16% | 12.56% | 13.25% |
| Return on assets (ROA) | 5.85% | 5.43% | 6.52% | 8.86% | 10.45% | 12.97% | 14.41% | 15.75% | 18.27% | 21.12% | 21.53% | 20.86% | 17.74% | 14.31% | 13.00% | 11.82% | 10.72% | 9.56% | 9.74% | 10.19% |
| Return on total capital | 14.10% | 13.32% | 14.98% | 20.96% | 25.46% | 32.03% | 35.20% | 36.48% | 38.88% | 42.37% | 40.17% | 35.80% | 32.30% | 28.26% | 29.72% | 30.83% | 27.43% | 26.15% | 25.84% | 28.00% |
| Return on equity (ROE) | 10.73% | 10.05% | 11.82% | 16.42% | 19.88% | 25.13% | 27.34% | 28.72% | 30.78% | 34.05% | 34.45% | 31.24% | 28.44% | 24.92% | 23.15% | 23.63% | 21.13% | 20.13% | 19.96% | 21.62% |
LGI Homes Inc's profitability ratios show a fluctuating trend over the past eight quarters.
- The Operating Return on Assets (Operating ROA) has been gradually declining from 20.08% in Q1 2022 to 6.84% in Q4 2023. This indicates that the company's ability to generate operating profits from its total assets has been weakening.
- Meanwhile, the Return on Assets (ROA) also shows a steady decrease from 15.75% in Q1 2022 to 5.85% in Q4 2023, which suggests a reduction in overall profitability relative to the total assets employed by the company.
- LGI Homes' Return on Total Capital has been fluctuating, with a peak of 21.47% in Q1 2022 and a recent dip to 7.27% in Q4 2023. This ratio reflects the company's efficiency in generating returns from both debt and equity capital.
- Finally, the Return on Equity (ROE) has followed a similar pattern, declining from 28.72% in Q1 2022 to 10.73% in Q4 2023. This indicates a diminishing ability to generate returns for the shareholders from the equity invested in the company.
Overall, the profitability ratios highlight a concerning trend of declining profitability for LGI Homes Inc, which may require further investigation into the company's operating efficiency and financial management practices.