DCF Tool

LGIH

LGI Homes Inc – New Single-Family Housing Construction (except For-Sale Builders)
Headquartered in The Woodlands, Texas, LGI Homes, Inc. engages in the design, construction and sale of homes in Texas, Arizona, Florida, Georgia, New Mexico, Colorado, North Carolina, South Carolina, Washington, Tennessee, Minnesota, Oklahoma, Alabama, California, Oregon, Nevada, West Virginia, Virginia and Pennsylvania. Since 2018, LGI Homes has been ranked as the 10th largest residential builder in the United States based on units closed. The Company has a notable legacy of more than 17 years of homebuilding operations, over which time it has closed more than 45,000 homes.
Analysis Results
Intrinsic Value $1,785.44
Latest Price $79.07
Relative Value 96% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 28.7%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.6%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 28.7%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 1.06 0.981
2023 1.36 1.17
2024 1.75 1.4
2025 2.25 1.68
2026 2.9 2.01
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 53.1 billion. This corresponds to a present value of 34.3 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 7.25 billion. Adding in the terminal value gives a total present value of 41.6 billion.

There are presently 23.3 million outstanding shares, so the intrinsic value per share is 1785.44.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 2,194,327,000
Current Cash 50,514,000
Current Liabilities 135,612,000
Current Debt 0
Non-Cash Working Capital (NCWC) 2,008,201,000
Change in NCWC 459,016,000
EBIT 547,698,000
Tax Provision 113,130,000
Depreciation and Amortization 1,154,000
Capital Expenditure -1,729,000
Unlevered Free Cash Flow 891,982,904
Current Assets 1,721,370,000
Current Cash 35,942,000
Current Liabilities 136,243,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,549,185,000
Change in NCWC 100,552,000
EBIT 364,710,000
Tax Provision 43,954,000
Depreciation and Amortization 710,000
Capital Expenditure -2,692,000
Unlevered Free Cash Flow 419,701,076
Current Assets 1,594,359,000
Current Cash 38,345,000
Current Liabilities 107,381,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,448,633,000
Change in NCWC 236,932,000
EBIT 227,538,000
Tax Provision 53,224,000
Depreciation and Amortization 643,000
Capital Expenditure -734,000
Unlevered Free Cash Flow 412,140,816
Current Assets 1,333,481,000
Current Cash 46,624,000
Current Liabilities 75,156,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,211,701,000
Change in NCWC 338,558,000
EBIT 200,111,000
Tax Provision 43,812,000
Depreciation and Amortization 711,000
Capital Expenditure -475,000
Unlevered Free Cash Flow 494,870,086
Current Assets 1,045,406,000
Current Cash 67,571,000
Current Liabilities 104,692,000
Current Debt 0
Non-Cash Working Capital (NCWC) 873,143,000
Change in NCWC 186,530,000
EBIT 169,801,000
Tax Provision 58,096,000
Depreciation and Amortization 791,000
Capital Expenditure -518,000
Unlevered Free Cash Flow 299,050,652
Current Assets 789,885,000
Current Cash 49,518,000
Current Liabilities 53,754,000
Current Debt 0
Non-Cash Working Capital (NCWC) 686,613,000
Change in NCWC 185,795,000
EBIT 111,471,000
Tax Provision 38,641,000
Depreciation and Amortization 1,089,000
Capital Expenditure -722,000
Unlevered Free Cash Flow 259,740,195
Current Assets 597,359,000
Current Cash 37,568,000
Current Liabilities 58,973,000
Current Debt 0
Non-Cash Working Capital (NCWC) 500,818,000
Change in NCWC 154,190,000
EBIT 79,674,000
Tax Provision 27,450,000
Depreciation and Amortization 883,000
Capital Expenditure -1,117,000
Unlevered Free Cash Flow 206,387,208

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