LGN (NASDAQ:LGN) Releases Earnings Results, Misses Expectations By $0.63 EPS

LGN (NASDAQ:LGN) posted its earnings results on Thursday. The company reported ($0.37) EPS for the quarter, missing the consensus estimate of $0.26 by ($0.63), FiscalAI reports. The company had revenue of $1.26 billion for the quarter. LGN had a positive return on equity of 4.48% and a negative net margin of 1.20%.

Here are the key takeaways from LGN’s conference call:

• Revenue and adjusted EBITDA more than doubled year over year in Q2 2026, reaching $1.262 billion and $155 million, respectively, while adjusted EBITDA margin improved sequentially by nearly 90 basis points.
• Demand remains strongest in data centers and technology, with organic revenue growth near 60%, organic backlog and awards growth above 35%, and total backlog reaching a record $5.7 billion with a 1.4x trailing-12-month book-to-bill ratio.
• Management raised full-year 2026 guidance to $4.7 billion-$4.8 billion of revenue and $565 million-$585 million of adjusted EBITDA, citing strong backlog, project acceleration, and continued execution.
• Net leverage fell to 1.5x from approximately 3.0x following the IPO, while debt repricing and credit-rating upgrades reduced borrowing costs and leave the company positioned to pursue additional acquisitions.
• Consolidated adjusted gross margin declined to 18.5% from 21.8% a year earlier due to mix shifting toward installation and fabrication, while weaker sustainability-consulting demand led to goodwill and intangible-asset impairments; higher fabrication-capacity investment also lifted second-half 2026 capital-spending expectations by $15 million-$20 million.

LGN Price Performance

Shares of LGN stock traded up $3.14 on Friday, reaching $66.38. The company’s stock had a trading volume of 1,445,654 shares, compared to its average volume of 1,435,852. The company has a market capitalization of $7.17 billion and a P/E ratio of 288.61. LGN has a 52-week low of $26.96 and a 52-week high of $107.24. The stock has a 50-day moving average price of $73.77 and a 200-day moving average price of $68.40. The company has a quick ratio of 1.30, a current ratio of 1.30 and a debt-to-equity ratio of 1.06.

Key LGN News

Here are the key news stories impacting LGN this week:

• Positive Sentiment: Legence reported record second-quarter revenue of $1.26 billion, up 111% year over year, while adjusted EBITDA rose 114% to $154.6 million. Organic revenue growth excluding the Bowers acquisition was 60%, indicating substantial underlying demand. Legence Reports Second Quarter 2026 Financial Results
• Positive Sentiment: Management raised its 2026 revenue outlook to $4.7 billion-$4.8 billion from $4.1 billion-$4.3 billion and lifted adjusted EBITDA guidance to $565 million-$585 million from $470 million-$490 million. Third-quarter revenue guidance of $1.225 billion-$1.275 billion also exceeds the reported consensus estimate. Legence Raises 2026 Guidance
• Positive Sentiment: Backlog and awarded contracts reached a record $5.67 billion, up 105% year over year, providing improved revenue visibility. Demand was particularly strong in data centers and technology, as well as life sciences, government and education.
• Positive Sentiment: Bank of America raised its LGN price target to $116 from $105 and assigned a Buy rating. BMO also increased its target to $105 from $100 and rated the shares Outperform. Both targets imply substantial upside from recent trading levels. Analyst Price Target Revisions
• Neutral Sentiment: BTIG reaffirmed its Buy rating but reduced its price target to $100 from $120, reflecting a more cautious view after the quarterly results. Roth Capital also reiterated a Buy rating.
• Negative Sentiment: Legence reported a loss of $0.37 per share, versus analysts’ expected profit of $0.26. Net loss attributable to Legence widened to $27.8 million from $5.3 million a year earlier, partly reflecting goodwill and long-lived asset impairments.
• Negative Sentiment: Gross margin declined to 17.4% from 21.5%, while adjusted gross margin fell to 18.5% from 21.8%, due to an unfavorable business mix and higher service-delivery costs. Analysts’ mixed reactions, including several price-target reductions, underscore concerns about profitability despite the strong top-line outlook.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently made changes to their positions in the business. Assetmark Inc. purchased a new stake in LGN in the 4th quarter worth $31,000. KBC Group NV acquired a new position in LGN during the first quarter worth $66,000. Aster Capital Management DIFC Ltd purchased a new position in LGN during the fourth quarter valued at $64,000. Kestra Advisory Services LLC purchased a new position in LGN during the fourth quarter valued at $91,000. Finally, Avior Wealth Management LLC acquired a new stake in shares of LGN in the second quarter valued at about $203,000.

Wall Street Analysts Forecast Growth

LGN has been the topic of several recent research reports. Weiss Ratings restated a “sell (d-)” rating on shares of LGN in a research report on Friday, June 26th. Guggenheim lifted their target price on shares of LGN from $106.00 to $115.00 and gave the company a “buy” rating in a report on Friday, July 10th. Bank of America boosted their target price on shares of LGN from $105.00 to $116.00 and gave the company a “buy” rating in a research note on Friday. BMO Capital Markets raised their price target on shares of LGN from $100.00 to $105.00 and gave the company an “outperform” rating in a research report on Friday. Finally, BTIG Research reiterated a “buy” rating and issued a $100.00 price objective (down from $120.00) on shares of LGN in a research report on Friday. One equities research analyst has rated the stock with a Strong Buy rating, ten have assigned a Buy rating, two have given a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and a consensus target price of $99.08.

About LGN

Legence Corp. is a provider of engineering, consulting, installation and maintenance services for mission-critical systems in buildings. The company specializes in designing, fabricating and installing complex HVAC, process piping and other mechanical, electrical and plumbing systems. Legence Corp. is based in SAN JOSE, Calif.