LGI Homes' stock price plummeted 5.10% during Tuesday's intraday trading session following the release of its fourth quarter and full year 2025 financial results.
The homebuilder reported a significant year-over-year decline in key financial metrics for the fourth quarter. Revenue fell to $474.0 million from $557.4 million in the same period last year, while net income dropped sharply to $17.3 million from $50.9 million. Gross margin contracted to 17.7% from 22.9%, and adjusted gross margin decreased to 22.3% from 25.2%.
Investors reacted negatively to the company's 2026 outlook, which projects adjusted gross margin between 21.0% and 23.0%, below the 24.0% achieved in full year 2025. The guidance for home closings between 4,600 and 5,400 suggests limited growth potential compared to the 4,685 homes closed in 2025, contributing to the stock's downward pressure during the trading session.