Gross Margin % is calculated as gross profit divided by its revenue. LGI Homes's Gross Profit for the
three
months ended in Dec. 2023 was $143 Mil. LGI Homes's Revenue for the
three
months ended in Dec. 2023 was $608 Mil. Therefore, LGI Homes's Gross Margin % for the quarter that ended in Dec. 2023 was 23.44%.
The historical rank and industry rank for LGI Homes's Gross Margin % or its related term are showing as below:
LGIH'
s Gross Margin % Range Over the Past 10 Years
Min: 22.99 Med: 25.96 Max: 28.06
Current: 22.99
During the past 13 years, the highestGross Margin % of LGI Homes was 28.06%. The lowest was 22.99%. And the median was 25.96%.
LGIH's Gross Margin % is ranked better than 58.42% of 101
companies
in the Homebuilding & Construction industry
Industry Median: 21.69
vs LGIH: 22.99
LGI Homes had a gross margin of 23.44% for the quarter that ended in Dec. 2023 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for LGI Homes was 0.20% per year.
LGI Homes Gross Margin % Historical Data
The historical data trend for LGI Homes's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of LGI Homes's Gross Margin %
For the Residential Construction subindustry, LGI Homes's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
LGI Homes's Gross Margin % Distribution in the Homebuilding & Construction Industry
For the Homebuilding & Construction industry and Consumer Cyclical sector, LGI Homes's Gross Margin % distribution charts can be found below:
* The bar in red indicates where LGI Homes's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
LGI Homes (NAS:LGIH) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
LGI Homes had a gross margin of 23.44% for the quarter that ended in Dec. 2023 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
LGI Homes Gross Margin % Related Terms
Thank you for viewing the detailed overview of LGI Homes's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
LGI Homes Inc is engaged in the design, construction, and sale of new homes in markets. The company current product offerings include entry-level homes, including both detached homes and townhomes, and move-up homes sold, which are sold under LGI Homes brand, and luxury series homes, which are sold under the Terrata Homes brand. It offers a set number of floor plans in each community with features that include upgrades, such as granite countertops, appliances, and ceramic tile flooring.
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