LGI Homes Inc (0JSI.L) Q3 2024 Earnings Report

LGI Homes reported a solid Q3 2024 with revenue of $651.9 million, up 5.6% year over year and 8.2% quarter over quarter, supported by a stable gross margin of about 25.1% and an operating margin near 12.3%. Net income of $69.6 million translated to EPS of $2.96, reinforcing a durable earnings foundation despite cyclical market headwinds. However, the quarter featured pronounced working capital dynamics, culminating in negative operating cash flow of $17.8 million and a free cash flow figure of -$17.8 million, underscoring a substantial inventory build and receivables/ payables cadence that pressured near-term liquidity and liquidity-driven metrics. The balance sheet shows a sizeable inventory position (~$3.44 billion) and a high debt burden ($1.60 billion total debt; net debt approximately $1.54 billion), contributing to a leveraged profile despite a robust current ratio (~12.8x) and substantial equity cushion (approx. $2.00 billion). Management commentary is not included in the provided dataset, limiting explicit forward-looking guidance, but the quarterly performance suggests continued earnings resilience even as working capital management remains a key watchpoint for cash generation and capital allocation going forward.

Key takeaway for investors: LGI Homes delivers steady profitability in a cyclical housing context, but near-term cash flow and leverage dynamics warrant close monitoring of inventory turns, debt maturity profiles, and any management outlook on capital deployment and operating efficiency improvements.