Legacy Housing Corp (NASDAQ: LEGH)

Sector: Consumer Cyclical Industry: Residential Construction CIK: 0001436208
Market Cap 512.88 Mn
P/B 0.98
P/E 10.66
P/S 2.84
ROIC (Qtr) 8.72
Div Yield % 0.00
Rev 1y % (Qtr) -8.56
Total Debt (Qtr) 1.00 Mn
Debt/Equity (Qtr) 0.00
Add ratio to table...

About

Legacy Housing Corp, a Texas-based corporation with its common stock listed on the NASDAQ Global Select Market under the ticker symbol LEGH, is a prominent player in the manufactured homes and tiny houses industry. Since its inception in 2005, the company has ascended to become the sixth largest producer of manufactured homes in the United States, as per the rankings of the Manufactured Housing Institute and the Institute for Building Technology and Safety. Legacy Housing Corp's primary business activities revolve around the design, production,...

Read more

Investment thesis

Bull case

  • Strong operating cash flow of 26.02M provides robust 25.96x coverage of total debt 1M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 13.55M provide 31.37x coverage of short-term debt 432000, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 26.02M provides strong 37.65x coverage of stock compensation 691000, indicating sustainable incentive practices.
  • Strong tangible asset base of 557.93M provides 556.81x coverage of total debt 1M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 26.02M provides exceptional 1084x coverage of interest expenses 24000, showing strong debt service capability.

Bear case

  • Operating cash flow of 26.02M barely covers its investment activities of (4.43M), with a coverage ratio of -5.87, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Short-term investments of 80.52M significantly exceed cash reserves of 13.55M, which is 5.94x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • High receivables of 183.48M relative to inventory of 39.58M (4.64 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Long-term investments of 136.26M represent a high 2.43x of fixed assets 56.01M, indicating potential overexposure to financial assets versus operational capabilities.
  • Free cash flow of 18.65M represents just -8.84x of debt issuance (2.11M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Residential Construction
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 DHI Horton D R Inc /De/ 56.51 Bn 105.92 7.04 5.55 Bn
2 TOL Toll Brothers, Inc. 29.11 Bn 76.92 7.08 2.79 Bn
3 PHM Pultegroup Inc/Mi/ 28.02 Bn 12.63 1.62 2.16 Bn
4 LEN Lennar Corp /New/ 23.56 Bn -229.13 7.79 4.08 Bn
5 NVR Nvr Inc 21.52 Bn 16.06 2.13 1.05 Bn
6 IBP Installed Building Products, Inc. 8.62 Bn -487.54 19.34 0.99 Bn
7 TMHC Taylor Morrison Home Corp 6.86 Bn 8.06 0.82 2.26 Bn
8 MTH Meritage Homes CORP 5.67 Bn 12.52 0.97 1.83 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.92 1.47
EV to Cash from Ops. EV/CFO 19.66 43.01
EV to Debt EV to Debt 510.52 37.82
EV to EBIT EV/EBIT 8.64 48.76
EV to EBITDA EV/EBITDA 9.24 112.58
EV to Free Cash Flow [EV/FCF] EV/FCF 27.42 11.82
EV to Market Cap EV to Market Cap 1.00 1.26
EV to Revenue EV/Rev 2.83 3.28
Price to Book Value [P/B] P/B 0.98 9.23
Price to Earnings [P/E] P/E 10.66 -14.72
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 8.23
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 6.29
Dividend per Basic Share Div per Share (Qtr) 0.00 0.54
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 96.10
Interest Coverage Int. cover (Qtr) 2,466.25 142.03
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 17.20 27.50
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 2,277.37 196.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 4.02
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -12.48 -29.39
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -7.18 -30.05
EBIT Growth (1y) % EBIT 1y % (Qtr) -15.60 -31.27
EBT Growth (1y) % EBT 1y % (Qtr) -14.38 -32.05
EPS Growth (1y) % EPS 1y % (Qtr) -9.87 -25.62
FCF Growth (1y) % FCF 1y % (Qtr) 70.25 341.90
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -2.89 -14.63
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.32 1.00
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.13
Cash Ratio Cash Ratio (Qtr) 0.45 0.23
Current Ratio Curr Ratio (Qtr) 5.74 0.81
Debt to Equity Ratio Debt/Equity (Qtr) 0.00 0.58
Interest Cover Ratio Int Coverage (Qtr) 2,466.25 142.03
Times Interest Earned Times Interest Earned (Qtr) 2,466.25 142.03
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 33.70 10.57
EBIT Margin % EBIT Margin % (Qtr) 32.79 9.64
EBT Margin % EBT Margin % (Qtr) 32.78 9.44
Gross Margin % Gross Margin % (Qtr) 44.20 22.26
Net Profit Margin % Net Margin % (Qtr) 26.70 7.17