Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at LGI Homes (NASDAQ:LGIH) and its peers.
Traditionally, homebuilders have built competitive advantages with economies of scale that lead to advantaged purchasing and brand recognition among consumers. Aesthetic trends have always been important in the space, but more recently, energy efficiency and conservation are driving innovation. However, these companies are still at the whim of the macro, specifically interest rates that heavily impact new and existing home sales. In fact, homebuilders are one of the most cyclical subsectors within industrials.
The 12 home builders stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 2.8%.
Stocks, especially growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data. However, home builders stocks have held steady amidst all this with share prices up 2.5% on average since the latest earnings results.
LGI Homes (NASDAQ:LGIH) Based in Texas, LGI Homes (NASDAQ:LGIH) is a homebuilding company specializing in constructing affordable, entry-level single-family homes in desirable communities across the United States.
LGI Homes reported revenues of $602.5 million, down 6.6% year on year. This print fell short of analysts’ expectations by 2.4%. Overall, it was a slower quarter for the company with a miss of analysts’ backlog sales estimates.
LGI Homes delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $105.24.
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Best Q2: Skyline Champion (NYSE:SKY) Founded in 1951, Skyline Champion (NYSE:SKY) is a manufacturer of modular homes and buildings in North America.
Skyline Champion reported revenues of $627.8 million, up 35.1% year on year, outperforming analysts’ expectations by 4.6%. The business had an incredible quarter with an impressive beat of analysts’ earnings estimates.
The market seems happy with the results as the stock is up 17.3% since reporting. It currently trades at $87.30.
Weakest Q2: TopBuild (NYSE:BLD) Established in 2015 following a spinoff from Masco Corporation (NYSE:MAS), TopBuild (NYSE:BLD) is a distributor and installer of insulation and other building products.
TopBuild reported revenues of $1.37 billion, up 3.7% year on year, falling short of analysts’ expectations by 2.3%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.
As expected, the stock is down 15.3% since the results and currently trades at $360.43.
Toll Brothers (NYSE:TOL) Started by two brothers who started by building and selling just one home in Pennsylvania, today Toll Brothers (NYSE:TOL) is a luxury homebuilder across the United States.
Toll Brothers reported revenues of $2.73 billion, up 1.5% year on year. This print met analysts’ expectations. Overall, it was a strong quarter as it also put up a decent beat of analysts’ earnings estimates and solid earnings guidance for the full year.
The stock is up 4.8% since reporting and currently trades at $140.
NVR (NYSE:NVR) Known for its unique land acquisition strategy, NVR (NYSE:NVR) is a respected homebuilder and mortgage company in the United States.
NVR reported revenues of $2.61 billion, up 11.7% year on year. This print surpassed analysts’ expectations by 2.6%. It was an exceptional quarter as it also produced an impressive beat of analysts’ backlog sales estimates and a solid beat of analysts’ operating margin estimates.
The stock is up 6% since reporting and currently trades at $9,150.
This content was originally published on Stock Story
