Legacy Housing Intrinsic Value Calculator – Legacy Housing Corporation: Lacking a Margin of Safety

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Legacy Housing ($NASDAQ:LEGH) Corporation is a company which manufactures and sells manufactured and modular homes. The company has been in business for over 25 years and is publicly traded on the New York Stock Exchange. Despite its long history, Legacy Housing Corporation lacks a margin of safety which is essential for staying afloat in a highly competitive industry. This has been partially attributed to a decline in housing starts and an increased competition from other modular home companies. Legacy’s margins of safety have decreased as a result of the decreasing housing demand and competition. The company’s financial situation is further impacted by its reliance on sales of manufactured homes to customers who may not have the ability to pay their debts in full.

This creates a high risk of default for the company and could potentially lead to significant losses. Furthermore, the company’s debt levels are high relative to its current market capitalization, creating additional risk for investors. Legacy Housing Corporation is also facing increased pressure from environmental regulations which could increase its costs and further reduce its margins of safety. The company’s significant debt levels and reliance on customers who may not be able to pay create additional risk for investors and could lead to significant losses if not properly managed. Environmental regulations are also putting pressure on the company, further reducing its margins of safety and increasing the likelihood of financial hardship for Legacy Housing Corporation.

Stock Price

Legacy Housing Corporation, a publicly traded company, experienced a lack of margin of safety on Monday when its stock opened at $25.0 and closed at $24.3, representing a 1.5% decrease from its previous closing price of 24.6. The stock’s performance suggests that investors are not particularly bullish on the company’s long-term potential and outlook. This could be due to a variety of factors, such as a lack of confidence in the company’s financials or an overall bearish sentiment in the market. It is important for investors to keep a close eye on Legacy Housing Corporation’s performance going forward to ensure that they are making safe and informed investments. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Legacy Housing. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Legacy Housing. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Legacy Housing. More…

Key Ratios Snapshot

Some of the financial key ratios for Legacy Housing are shown below. More…

Analysis – Legacy Housing Intrinsic Value Calculator

GoodWhale recently conducted an analysis of LEGACY HOUSING‘s wellbeing. Through our proprietary Valuation Line, we calculated the intrinsic value of the LEGACY HOUSING share to be around $20.7. Currently, LEGACY HOUSING’s stock is being traded at $24.3, which is a fair price that is overvalued by 17.6%. It is important to note that this price is subject to change depending on economic conditions, and the company’s performance. More…

Peers

The company offers a variety of housing products, including single- and multi-section homes, and modular homes. The company sells its homes through a network of dealers and retailers in the United States. Legacy Housing Corp competes with Taylor Morrison Home Corp, Nobility Homes Inc, and Skyline Champion Corp.

– Taylor Morrison Home Corp ($NYSE:TMHC)

Taylor Morrison Home Corp is a homebuilder and land developer with operations in the United States and Canada. The company is engaged in the design, construction, and sale of single-family detached and attached homes, as well as the development of communities. It also provides mortgage financing, title insurance, and closing services for homebuyers. As of December 31, 2020, the company operated in 27 states and 30 markets.

– Nobility Homes Inc ($OTCPK:NOBH)

Nobility Homes Inc is a homebuilder based in Ocala, Florida. The company has a market cap of 84.27M as of 2022 and a Return on Equity of 9.71%. Nobility Homes builds and sells a variety of homes, including single-family homes, multi-family homes, and vacation homes. The company has a long history of success, with a strong reputation for quality and customer satisfaction.

– Skyline Champion Corp ($NYSE:SKY)

Skyline Champion Corp is a leading manufacturer of factory-built housing in North America. The company has a strong market position in the United States and Canada, with a diversified product mix that includes a broad range of housing types and price points. The company’s products are marketed under a variety of brand names, includingSkyline, Champion, Palm Harbor Homes, and Oakwood Homes. Skyline Champion has a long history of providing quality homes and outstanding customer service, and is committed to continued innovation and growth.

Summary

Legacy Housing Corporation (LEG) is a laggard stock in the homebuilding and modular housing industries. It has consistently underperformed against its peers, and its financials show weak returns as well as declining cash flows.

In addition, the company does not have a margin of safety built into its stock price which can limit the potential upside of investing in it. Investors should proceed with caution when considering LEG as an investment option and conduct further due diligence, such as analyzing the company’s ability to generate consistent cash flows and evaluating its competitive position. Furthermore, investors should be aware of the potential risk associated with investing in this stock given its lack of a margin of safety.