Yahoo Finance Things Look Grim For Legacy Housing Corporation (NASDAQ:LEGH) After Today's Downgrade
Today is shaping up negative for Legacy Housing Corporation (NASDAQ:LEGH) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
After the downgrade, the consensus from Legacy Housing's two analysts is for revenues of US$173m in 2024, which would reflect a considerable 8.8% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to nosedive 20% to US$1.79 in the same period. Prior to this update, the analysts had been forecasting revenues of US$238m and earnings per share (EPS) of US$2.84 in 2024. Indeed, we can see that the analysts are a lot more bearish about Legacy Housing's prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.
Check out our latest analysis for Legacy Housing
It'll come as no surprise then, to learn that the analysts have cut their price target 16% to US$25.33.
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. We would highlight that sales are expected to reverse, with a forecast 8.8% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 9.3% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.1% annually for the foreseeable future. It's pretty clear that Legacy Housing's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Legacy Housing, including recent substantial insider selling. For more information, you can click here to discover this and the 1 other flag we've identified.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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.
