It's been a good week for LGI Homes, Inc. (NASDAQ:LGIH) shareholders, because the company has just released its latest third-quarter results, and the shares gained 8.0% to US$110. Revenues were US$652m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$2.95 were also better than expected, beating analyst predictions by 17%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for LGI Homes

Following the latest results, LGI Homes' six analysts are now forecasting revenues of US$2.84b in 2025. This would be a huge 26% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 28% to US$10.74. In the lead-up to this report, the analysts had been modelling revenues of US$3.14b and earnings per share (EPS) of US$11.79 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of US$121, suggesting the downgrades are not expected to have a long-term impact on LGI Homes' valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic LGI Homes analyst has a price target of US$160 per share, while the most pessimistic values it at US$85.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting LGI Homes' growth to accelerate, with the forecast 20% annualised growth to the end of 2025 ranking favourably alongside historical growth of 2.0% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that LGI Homes is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded LGI Homes' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for LGI Homes going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for LGI Homes that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.