This Less-Followed Home Builder Could Be Setting Up For a Rally
One of the biggest beneficiaries of the changing economy has been the housing industry. The health crisis has caused consumers to reevaluate their living conditions and new and existing home sales have been trending higher over the last few quarters. Homebuilding stocks have rallied sharply over the last eight months and the SPDR S&P Homebuilders ETF (XHB) has more than doubled. The fund fell below the $25 level in March and is now trading over $55.
LGI Homes (LGIH) took part in the rally, rallying almost an exact $100 from its low of $33 to a high of $132.98. The stock has pulled back over the last few months, but may be setting up for another leg higher. The stock pulled back briefly in the third quarter and hit a low of $101.30 before rallying to its all-time high. The recent pullback has brought the $101-$102 range back in to play. The recent pullback has also brought the weekly stochastic readings down close to oversold territory for the first time since March.
Prior to the oversold readings in March, the indicators were below 30 in the fourth quarter of 2019 and in Q4 2018. In both of those instances the stock rallied off their lows.
LGI Homes isn’t as widely followed as competitors like Lennar (LEN) and D.R. Horton (DHI), and it also doesn’t have as much optimism toward it. From a contrarian perspective, this is a good thing for LGI as it leaves room for the bearish sentiment to shift to bullish and help push the stock higher.
LGI only has five analysts covering it with one “buy” rating, three “hold” ratings, and one “sell” rating. Not only is the overall coverage low, but the buy percentage is only 20%. On the other hand D.R. Horton has 22 analysts covering it with 16 “buy” ratings and six “hold” ratings. That’s a buy percentage of 72.7%. Lennar also has 22 analysts covering it with 13 “buy” ratings and nine “hold” ratings. That means its buy percentage is 59.1%.
Short sellers are also displaying pessimism toward LGI. The short interest ratio is at 8.5 currently and that is well above the average ratio in the 3.0 range. Lennar’s short interest ratio is 3.1 and D.R. Horton’s is below average at 1.5.
If we look at the Tickeron Screener for these three stocks, LGI has one positive indicator from the Profit vs. Risk Rating and it has one negative from the PE Growth Rating. D.R. Horton has two positive readings and two negative readings while Lennar has one positive and one negative. Both Lennar and D.R. Horton get negative readings for the Outlook Rating.
LGIH in upward trend: 10-day moving average crossed above 50-day moving average on November 28, 2025
The 10-day moving average for LGIH crossed bullishly above the 50-day moving average on November 28, 2025. This indicates that the trend has shifted higher and could be considered a buy signal. In of 11 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where LGIH's RSI Oscillator exited the oversold zone, of 30 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on November 21, 2025. You may want to consider a long position or call options on LGIH as a result. In of 85 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for LGIH just turned positive on November 04, 2025. Looking at past instances where LGIH's MACD turned positive, the stock continued to rise in of 47 cases over the following month. The odds of a continued upward trend are .
LGIH moved above its 50-day moving average on November 21, 2025 date and that indicates a change from a downward trend to an upward trend.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where LGIH advanced for three days, in of 265 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 3 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where LGIH declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
LGIH broke above its upper Bollinger Band on November 25, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for LGIH entered a downward trend on November 11, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. LGIH’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.581) is normal, around the industry mean (20.067). P/E Ratio (11.566) is within average values for comparable stocks, (55.314). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (1.474). LGIH has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.037). P/S Ratio (0.684) is also within normal values, averaging (24.997).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. LGIH’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 70, placing this stock worse than average.
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General Information
a provider of residential construction services
Industry Homebuilding
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