LGI Homes (LGIH)

Return on equity (ROE)

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
Net income (ttm) US$ in thousands 196,071 197,290 194,757 189,318 199,227 181,253 204,601 274,843 326,567 403,755 413,915 408,673 429,645 454,770 443,224 380,714 323,895 252,337 212,682 203,113
Total stockholders’ equity US$ in thousands 2,037,230 1,996,960 1,923,840 1,869,200 1,856,030 1,802,680 1,731,010 1,674,230 1,642,410 1,606,980 1,513,920 1,422,750 1,395,850 1,335,770 1,286,410 1,218,640 1,139,000 1,012,670 918,782 859,605
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%

December 31, 2024 calculation

ROE = Net income (ttm) ÷ Total stockholders’ equity
= $196,071K ÷ $2,037,230K
= 9.62%

LGI Homes' return on equity (ROE) has shown a declining trend over the past few years. The ROE was relatively stable and strong in the range of 23% to 34% from March 2020 to June 2021. However, it started to decline thereafter, dropping to 9.62% by December 2024. This decrease in ROE indicates a decreasing profitability relative to shareholders' equity. It suggests that the company may be less effective in generating profits from the shareholders' investments over time. Investors and stakeholders may need to closely monitor LGI Homes' financial performance and management strategies to understand the factors contributing to the declining ROE and take appropriate actions accordingly.