LGI Homes (LGIH)
Profitability ratios
Return on sales
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 33.28% | 33.21% | 33.48% | 32.57% | 22.99% | 22.36% | 22.95% | 26.14% | 28.06% | 28.93% | 28.48% | 27.21% | 26.82% | 27.00% | 26.72% | 26.21% | 25.47% | 24.18% | 23.87% | 23.77% |
| Operating profit margin | 8.48% | 8.87% | 9.07% | 8.82% | 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% |
| Pretax margin | 10.35% | 10.20% | 10.24% | 9.86% | 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% |
| Net profit margin | 7.84% | 7.73% | 7.73% | 7.39% | 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% |
LGI Homes' profitability ratios have shown fluctuations over the analyzed periods.
1. Gross Profit Margin: The gross profit margin has been gradually increasing from 23.77% on March 31, 2020, to a peak of 33.48% on June 30, 2024. However, it slightly decreased to 33.28% on December 31, 2024. This indicates that LGI Homes has been able to improve its efficiency in generating profits from its revenue but experienced a minor setback in the most recent quarter.
2. Operating Profit Margin: The operating profit margin started at 12.98% on March 31, 2020, increased over time, reaching a peak of 18.92% on June 30, 2022. Yet, it declined to 8.48% by December 31, 2024. This trend suggests fluctuations in LGI Homes' ability to control its operating expenses effectively.
3. Pretax Margin: The pretax margin showed a similar pattern, starting at 13.22% on March 31, 2020, peaking at 19.66% on September 30, 2022, and decreasing to 10.35% by December 31, 2024. This indicates that LGI Homes' profitability before taxes has been subject to ups and downs throughout the analyzed periods.
4. Net Profit Margin: The net profit margin, which reflects LGI Homes' profitability after all expenses, also displayed fluctuations. Starting at 10.13% on March 31, 2020, it reached a high of 15.43% on September 30, 2022, but decreased to 7.84% on December 31, 2024. This suggests that LGI Homes' bottom-line profitability has been varying, possibly due to changes in costs or revenue performance.
In summary, while LGI Homes has shown improvements in certain profitability ratios over time, there have also been periods of decline or fluctuation. It is essential for the company to monitor and manage its costs effectively to maintain and enhance its overall profitability in the future.
Return on investment
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.64% | 5.92% | 6.17% | 6.41% | 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% |
| Return on assets (ROA) | 5.22% | 5.16% | 5.26% | 5.37% | 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% |
| Return on total capital | 8.19% | 11.35% | 11.93% | 12.23% | 12.71% | 12.11% | 13.32% | 19.34% | 24.19% | 31.00% | 35.77% | 37.01% | 39.42% | 43.00% | 39.98% | 35.85% | 32.35% | 28.28% | 29.74% | 30.72% |
| Return on equity (ROE) | 9.62% | 9.88% | 10.12% | 10.13% | 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% |
LGI Homes' profitability ratios have shown fluctuations over the years. The Operating Return on Assets (Operating ROA) increased from 15.14% in March 2020 to a peak of 26.56% in September 2021 before declining to 5.64% by December 2024. This indicates a varying efficiency in generating operating profits from its assets over the period.
Similarly, the Return on Assets (ROA) metric also peaked at 21.53% in June 2021 but decreased to 5.22% by December 2024. This ratio reflects LGI Homes' overall ability to generate profits from its total assets, showing a similar declining trend.
The Return on Total Capital reached its highest at 43.00% in September 2021 but dropped to 8.19% by December 2024. This ratio measures the company's capacity to generate returns from all forms of capital invested, including debt and equity. The decreasing trend indicates potential challenges in efficiently utilizing capital to generate returns.
The Return on Equity (ROE) peaked at 34.45% in June 2021 and gradually decreased to 9.62% by December 2024. ROE reflects the profitability of the company from the shareholders' perspective, and the declining trend suggests a reduction in the returns generated for the equity holders over time.
Overall, the declining profitability ratios for LGI Homes indicate a potential struggle in maintaining efficient operations and maximizing returns for both assets and capital providers.