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

LGN (NASDAQ:LGN) posted its earnings results on Thursday. The company reported ($0.37) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.26 by ($0.63), FiscalAI reports. The company had revenue of $1.26 billion during the quarter.

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 Stock Performance

LGN stock traded down $5.44 during mid-day trading on Thursday, reaching $63.24. 2,024,322 shares of the stock traded hands, compared to its average volume of 1,478,994. LGN has a 12-month low of $26.96 and a 12-month high of $107.24. The stock has a market capitalization of $6.83 billion and a PE ratio of 274.96. The company has a debt-to-equity ratio of 1.06, a current ratio of 1.30 and a quick ratio of 1.30. The business’s 50-day moving average is $74.63 and its 200-day moving average is $68.32.

LGN News Summary

Here are the key news stories impacting LGN this week:

• Positive Sentiment: Legence reported record second-quarter revenue of $1.26 billion, up 110.7% year over year. Organic revenue growth excluding the Bowers acquisition was approximately 60%, indicating substantial underlying demand. Legence Reports Second Quarter 2026 Financial Results
• Positive Sentiment: Non-GAAP adjusted EBITDA rose 114.1% to $154.6 million, while backlog and awarded contracts more than doubled to $5.67 billion. Management cited strong demand from data centers and technology, as well as life sciences, healthcare, government and education customers. Legence Q2 2026 Earnings Call Transcript
• Positive Sentiment: Management raised 2026 revenue guidance to $4.7 billion-$4.8 billion from $4.1 billion-$4.3 billion and adjusted EBITDA guidance to $565 million-$585 million from $470 million-$490 million. Third-quarter guidance also implies revenue of $1.225 billion-$1.275 billion and adjusted EBITDA of $150 million-$160 million, above consensus revenue expectations. Legence Raises Full-Year Guidance
• Neutral Sentiment: Roth Capital reaffirmed a Buy rating and maintained a $120 price target, substantially above the recent trading level. However, analyst targets may not immediately offset concerns about the quarterly earnings quality. Roth Capital Rating Update
• Negative Sentiment: Legence reported a GAAP loss of $0.37 per share, versus the consensus estimate of $0.26 per share in the company’s earnings coverage, while the net loss widened to $34.6 million from $3.9 million a year earlier. A separate data summary cited adjusted EPS of $0.17 versus a $0.35 estimate, reflecting inconsistent reporting but still indicating an earnings shortfall. Legence Q2 Earnings Snapshot
• Negative Sentiment: Consolidated gross margin fell to 17.4% from 21.5%, and adjusted gross margin declined to 18.5% from 21.8%, due to an unfavorable shift toward lower-margin installation and maintenance work and higher fulfillment costs. The company also recorded goodwill and long-lived asset impairments totaling about $41 million.
• Negative Sentiment: Legence carried approximately $1.03 billion of debt at quarter-end, and reported insider activity over the past six months consisted entirely of sales, which may add to investor caution.

Analyst Ratings Changes

Several equities analysts have recently issued reports on the company. Glj Research began coverage on LGN in a research note on Tuesday, April 21st. They set a “buy” rating and a $99.00 target price on the stock. Royal Bank Of Canada cut their price target on shares of LGN from $106.00 to $101.00 and set an “outperform” rating on the stock in a report on Wednesday, July 22nd. BMO Capital Markets boosted their price target on shares of LGN from $63.00 to $100.00 and gave the company an “outperform” rating in a research report on Friday, May 15th. Roth Capital reiterated a “buy” rating and issued a $120.00 price objective on shares of LGN in a report on Wednesday. Finally, BTIG Research lifted their target price on shares of LGN from $75.00 to $120.00 and gave the company a “buy” rating in a report on Thursday, May 14th. One investment analyst has rated the stock with a Strong Buy rating, nine have assigned a Buy rating, two have given a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and an average price target of $98.91.

Hedge Funds Weigh In On LGN

Institutional investors have recently bought and sold shares of the stock. Janus Henderson Group PLC lifted its position in shares of LGN by 128.4% during the 4th quarter. Janus Henderson Group PLC now owns 4,401,402 shares of the company’s stock valued at $189,442,000 after buying an additional 2,474,220 shares in the last quarter. Vanguard Group Inc. lifted its stake in shares of LGN by 78.1% during the 4th quarter. Vanguard Group Inc. now owns 3,227,670 shares of the company’s stock valued at $138,919,000 after buying an additional 1,415,282 shares in the last quarter. Westfield Capital Management Co. LP bought a new position in LGN in the 4th quarter worth $69,438,000. Munro Partners increased its stake in LGN by 1,875.9% in the 4th quarter. Munro Partners now owns 1,396,642 shares of the company’s stock worth $60,111,000 after buying an additional 1,325,957 shares in the last quarter. Finally, CI Investments Inc. increased its stake in LGN by 2,209.7% in the 4th quarter. CI Investments Inc. now owns 788,287 shares of the company’s stock worth $33,928,000 after buying an additional 754,157 shares in the last quarter.

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.