LGI HomesLGIH +5.02%68 Gross Margin % is 18.74% as of Mar. 2026, which is 26% below its 10-year median of 25.36. GuruFocus rates LGIH with a GF Score™ of 68/100 and a GF Value™ of $70.72 (Fairly Valued). The stock has 12 warning signs investors should review. Among 90 Homebuilding & Construction companies, LGI Homes ranks worse than 56.67% on this metric.
Gross Margin % is calculated as gross profit divided by its revenue. LGI Homes's Gross Profit for the
three
months ended in Mar. 2026 was $60 Mil. LGI Homes's Revenue for the
three
months ended in Mar. 2026 was $320 Mil. Therefore, LGI Homes's Gross Margin % for the quarter that ended in Mar. 2026 was 18.74%.
Warning Sign:
LGI Homes Inc gross margin has been in long-term decline. The average rate of decline per year is -4.3%.
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: 20.3 Med: 25.36 Max: 28.06
Current: 20.3
During the past 13 years, the highestGross Margin % of LGI Homes was 28.06%. The lowest was 20.30%. And the median was 25.36%.
LGIH's Gross Margin % is ranked worse than 56.67% of 90
companies
in the Homebuilding & Construction industry
Industry Median: 21.34
vs LGIH: 20.30
LGI Homes had a gross margin of 18.74% for the quarter that ended in Mar. 2026 => No sustainable competitive advantage
The 5-Year average Growth Rate of Gross Margin for LGI Homes was -4.30% per year.
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 18.74% for the quarter that ended in Mar. 2026 => No sustainable competitive advantage
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
LGI Homes Gross Margin % Historical Data
* Premium members only.
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.
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 Gross Margin % vs 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 (LGIH) has a Gross Margin % of 18.74% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on LGI Homes and its competitors. This is 26% below median its historical median of 25.36. Over the past decade, LGI Homes' Gross Margin % has ranged from 20.30 to 28.06. According to the industry distribution chart, LGI Homes ranks #51 out of 90 companies in the Homebuilding & Construction industry, placing it in the top 56.7%.
Is LGI Homes' Gross Margin % too high?
LGI Homes' current Gross Margin % of 18.74% is 26% below median its 10-year median of 25.36. Over the past 10 years, this metric has ranged from a low of 20.30 to a high of 28.06. The Homebuilding & Construction industry median Gross Margin % is 21.34. LGI Homes' value of 18.74% is 12.2% below this industry median. Based on the distribution chart, LGI Homes ranks #51 out of 90 companies in the Homebuilding & Construction industry, which is below the industry midpoint. Overall, LGI Homes has a GF Score™ of 68/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does LGI Homes' Gross Margin % compare to DFH and BZH?
According to the Homebuilding & Construction industry distribution chart, LGI Homes ranks #51 out of 90 companies for Gross Margin %. This places LGI Homes in the lower half of its industry. The industry median Gross Margin % is 21.34. LGI Homes' value of 18.74% is 12.2% below this benchmark. Historically, LGI Homes' own Gross Margin % has ranged from 20.30 to 28.06 over the past decade. While the company's 10-year median is 25.36 vs. the industry median of 21.34, LGI Homes has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Homebuilding & Construction company?
The median Gross Margin % among Homebuilding & Construction companies is 21.34, based on 90 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. LGI Homes's current Gross Margin % of 18.74% is 12.2% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on LGI Homes and its competitors. For the Homebuilding & Construction industry, the median Gross Margin % is 21.34 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. LGI Homes's current Gross Margin % is 18.74%, which is 26% below median its own 10-year median of 25.36. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is LGI Homes stock overvalued right now?
Based on GuruFocus' analysis, LGI Homes (LGIH) is currently considered Fairly Valued. The stock's GF Value™ is $70.72, compared to a current price of $65.84 — trading 6.9% below its estimated fair value. The current Gross Margin % is 18.74%, which is 26% below median its 10-year median of 25.36 and 12.2% below the Homebuilding & Construction industry median of 21.34. LGI Homes' overall GF Score™ is 68/100 with 12 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For LGI Homes (LGIH), the current Gross Margin % is 18.74% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is LGI Homes (LGIH) Overvalued in 2026?
Based on GuruFocus' analysis, LGI Homes stock appears to be undervalued.
The current stock price of $65.84 is trading 6.9% below its estimated GF Value™ of $70.72.
GuruFocus considers LGI Homes to be Fairly Valued.
Key valuation signals for LGIH:
Gross Margin %: 18.74% (26% below median its 10-year median of 25.36)
GF Value™: $70.72 vs. price of $65.84 (6.9% below fair value)
Industry Position: 12.2% below the Homebuilding & Construction median (#51 of 90)
No single metric tells the full story. See the LGIH stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
LGI Homes Inc is engaged in the design, construction, and sale of new homes in markets. The company's current product offerings include entry-level homes, including both detached homes and townhomes, and move-up homes sold, which are sold under the 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. The company has seven operating segments: West, Northwest, Central, Midwest, Florida, Southeast, and Mid-Atlantic. The majority of the revenue is generated from the Central division segment.
68GF Score
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Gross Margin % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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