Is Forestar Group, Inc. overvalued or undervalued?

As of 16 January 2025, the valuation grade for Forestar Group, Inc. has moved from very attractive to attractive. The company is currently considered undervalued based on its key financial metrics. The P/E ratio stands at 6, significantly lower than the industry average, while the EV to EBITDA ratio is 3.87, indicating a favorable valuation compared to its earnings potential. Additionally, the Price to Book Value is at 0.60, suggesting that the stock is trading below its book value.
In comparison to peers, Forestar Group, Inc. has a P/E ratio of 5.68, while Kennedy-Wilson Holdings, Inc. shows a negative P/E of -9.21, highlighting Forestar's relative strength in valuation. The company's ROCE of 14.25% and ROE of 10.56% further reinforce its operational efficiency. Despite a challenging year with a YTD return of -22.84% compared to the S&P 500's 2.44%, the underlying metrics suggest that Forestar Group is positioned well for potential recovery and growth.