What happened

One month ago, a big analyst downgrade sent shares of Texas-based homebuilder LGI Homes (NASDAQ:LGIH) tumbling 14% -- but what goes down can also go up after earnings, and today, LGI Homes stock is hopping 15.3% higher, as of 11:30 a.m. EST.

So what

One month ago, I explained that the big hit LGI stock took after a downgrade from Wells Fargo (predicated on "decelerating" growth and a "premium" valuation) left the stock looking "pretty cheap" and "due for a bounce." Today, that due date has arrived.

Stock chart pointing up.

Wonder why this stock is going up? Allow us to explain. Image source: Getty Images.

LGI Homes reported a 34% rise in home sales revenue this morning, a combination of a 20% increase in home closings and an 11% jump in the sales prices on those homes. Earnings for the quarter were $1.01 per share, diluted, beating Wall Street's estimates by $0.07 per share. For the year, LGI reported profits of $3.41 per share on revenue of $838.3 million.

Now what

Adding to the stock's momentum, LGI gave new earnings guidance for the current fiscal year, predicting that earnings will grow at least 17% to $4 per share this year and perhaps rise as high as $4.50 per share.

With the stock still selling for less than 10 times earnings and promising growth well into the high double digits, now seems like a fine time for investors to own the shares -- and for Wells Fargo to issue a sua culpa and reupgrade LGI Homes stock.

Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.