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Texas Capital Securities initiated coverage on Legacy Housing Corp. (NASDAQ:LEGH) Monday with a Buy rating and a price target of $29.00, which sits within the broader analyst target range of $26-$34. According to InvestingPro data, the stock currently trades near its 52-week low of $21.67, potentially offering an attractive entry point.
The firm identified Legacy as a producer of manufactured homes in the U.S. with three manufacturing plants located in Texas and Georgia. The company sells homes through multiple channels including independent dealers, direct sales, retail stores, and commercial sales to mobile home parks.
Texas Capital noted that Legacy also provides financing options to its customers, which generates steady loan interest income for the company, creating an additional revenue stream beyond home sales.
The research firm highlighted leadership changes at Legacy, specifically mentioning CEO Duncan Bates who was appointed in June 2022. Under Bates’ leadership, the company has strengthened its management team, expanded sales initiatives, improved quality control, and recently simplified its product portfolio.
Texas Capital believes these strategic changes have repositioned Legacy Housing for growth, improved profitability, and re-accelerating book value creation, factors that contributed to the firm’s positive outlook on the stock.
In other recent news, Legacy Housing Corporation has reported its first-quarter 2025 earnings, revealing a significant shortfall in both earnings per share (EPS) and revenue compared to market expectations. The company posted an EPS of $0.43, which was below the forecasted $0.59, and revenue came in at $35.7 million, missing the projected $44.13 million. This marks a notable deviation from expectations, highlighting the challenges the company faced during the quarter. Despite these setbacks, Legacy Housing remains optimistic about the upcoming summer selling season and plans to sell lots in its Bastrop County development.
Additionally, B.Riley initiated coverage on Legacy Housing, assigning a Neutral rating with a price target of $26.00. The firm anticipates earnings per share of $2.31 and $2.60 for the fiscal years 2025 and 2026, respectively, but maintains a cautious stance, awaiting evidence of sustained volume recovery. Legacy Housing’s recent performance has been mixed, with a 36% year-over-year decrease in unit shipments in the first quarter of 2025. However, the company managed to increase net revenue per product sold by 23.1%, indicating a shift towards higher-margin offerings.
The company has also undertaken strategic initiatives to simplify its product line and expand its dealer network, aiming to regain market share and improve gross margins in the latter half of 2025 and into 2026. The management expects a positive year ahead, supported by potential regulatory relief and ongoing efforts to monetize non-core land holdings.
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