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Are Investors Undervaluing Landsea Homes (LSEA) Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Landsea Homes (LSEA - Free Report) is a stock many investors are watching right now. LSEA is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 7.88 right now. For comparison, its industry sports an average P/E of 10.28. LSEA's Forward P/E has been as high as 7.88 and as low as 1.72, with a median of 3.84, all within the past year.

Another valuation metric that we should highlight is LSEA's P/B ratio of 0.49. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.43. Over the past year, LSEA's P/B has been as high as 0.54 and as low as 0.27, with a median of 0.36.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. LSEA has a P/S ratio of 0.26. This compares to its industry's average P/S of 0.75.

Finally, our model also underscores that LSEA has a P/CF ratio of 5.11. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.56. Over the past year, LSEA's P/CF has been as high as 5.11 and as low as 1.97, with a median of 3.39.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Landsea Homes is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LSEA feels like a great value stock at the moment.


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