Legence's Secondary Sale: A Blackstone Exit Test at $45

The mechanics of the secondary offering are now complete. On January 8, 2026, the underwriters fully exercised their option to purchase an additional 1.26 million shares at $45.00 per share. This upsized deal, led by Goldman Sachs and Jefferies, saw Blackstone-affiliated stockholders sell a total of 8.4 million shares. Legence Corp. received no proceeds from the sale, making this a pure profit-taking event by major holders.

The immediate valuation question is clear. The $45.00 price acts as a near-term resistance level that the market must now accept or reject. The stock closed at $43.53 earlier this week, having underperformed in recent sessions with a 0.4% decline over 5 days and a 1.8% drop over 20 days. This recent weakness suggests the market is still digesting the scale of the stake reduction and the implied valuation from the offering price. The setup is now a test of whether the stock can break back through that $45 threshold or if the secondary sale has permanently capped its near-term upside.

Valuation: Trading Below the New Secondary Floor

The secondary offering has redrawn the valuation map. The stock is now trading at a clear discount to the new reference point set by the sale. At its close earlier this week, Legence was priced at $43.53, which is 22% below the $45.00 offering price. This creates a direct test of whether the market sees value below that level or views the offering as a fair valuation ceiling.

Yet, the stock's path since its initial public offering paints a different picture. Despite the recent pullback, Legence has maintained powerful momentum. Over the last 120 days, the share price has rallied 58.93% from its IPO price of $28.00. That surge puts the current price roughly 55% above the original listing level, reflecting strong investor enthusiasm for the business model.

This disconnect is captured in the premium multiples the market is assigning. The stock trades at an enterprise value to EBIT of 59.4 and an EV-to-sales multiple of 2.26. These are not typical numbers for a company in its early public life, signaling that investors are pricing in significant future growth and profitability. The secondary sale at $45 now forces a reckoning: can the company's operational execution justify those lofty multiples, or has the offering revealed that the market's initial optimism was too aggressive?

Catalysts and Risks: The Path to $45 or Below

The immediate catalyst is clear: the stock must decide whether to hold above its recent close and close the gap to the secondary offering price. Legence is trading at $44.50 today, having ticked higher after a weak week. The primary test is whether it can consistently trade above the $43.53 close from earlier in the week and challenge the $45.00 floor set by the Blackstone sale. A decisive break above that level would signal the market is accepting the new valuation and that the profit-taking was a one-time event. Failure to do so would reinforce the view that the offering capped the rally.

The key risk is the signal sent by the secondary sale itself. Even though Legence received no cash, the participation of major holders affiliated with Blackstone is a red flag for some investors. It indicates that the company's largest backers see a favorable exit opportunity at this price. This creates a persistent source of downward pressure, as the stock now has a new, high-profile reference point for selling. The market will be watching for any further signs of institutional selling.

The stock's sensitivity to news is a critical factor in this setup. With a daily volatility of 3.99%, Legence is primed for sharp moves on any development. This means the path to equilibrium will likely be choppy. The stock could react violently to earnings reports, analyst downgrades, or even broader market swings. For now, the near-term equilibrium hinges on whether the bullish momentum from the IPO can overcome the bearish signal of the secondary offering.