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LGI Homes (LGIH) Soars 6.6%: Is Further Upside Left in the Stock?

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LGI Homes (LGIH - Free Report) shares rallied 6.6% in the last trading session to close at $124.75. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 19.1% gain over the past four weeks.

The increased optimism in the stock stems from the improving U.S. real estate development sector as housing demand is recovering amid lower mortgage rates.

Also, LGIH recently announced the opening of a new community in the Fort Myers, FL market, Arrowhead Reserve.

This entry-level homebuilder in the Texas, Arizona, Florida and Georgia markets is expected to post quarterly earnings of $1.62 per share in its upcoming report, which represents a year-over-year change of -64.2%. Revenues are expected to be $536.73 million, down 33% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For LGI Homes, the consensus EPS estimate for the quarter has been revised 2.2% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on LGIH going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

LGI Homes is part of the Zacks Real Estate - Development industry. Howard Hughes , another stock in the same industry, closed the last trading session 4.5% higher at $88.14. HHC has returned 8.8% in the past month.

For Howard Hughes, the consensus EPS estimate for the upcoming report has changed +1.1% over the past month to $0.97. This represents a change of -53.6% from what the company reported a year ago. Howard Hughes currently has a Zacks Rank of #3 (Hold).


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