LGI Homes: Initiation Of Coverage – What Is Its Geographic Expansion Strategy?

LGI Homes, a player in the residential construction sector, delivered a robust performance in the second quarter
of 2024, navigating challenges such as rising costs and affordability issues with strategic pricing and community
development efforts, underscoring a delicate balancing act between growth and profitability pressures. The
company sold 1,655 homes, marking a significant revenue of over $602 million with an improved average sales
price of $364,000. This resulted in a substantial improvement in gross margins—up 300 basis points year-overyear
to 25%, reaching pre-pandemic levels, indicative of effective cost management and pricing strategies.