Is Forestar Group, Inc. overvalued or undervalued?

As of 7 July 2025, the valuation grade for Forestar Group, Inc. has moved from expensive to attractive, indicating a significant improvement in its valuation outlook. The company appears undervalued, particularly when considering its P/E ratio of 6, which is substantially lower than the industry average, and its Price to Book Value of 0.60. Additionally, the EV to EBITDA ratio stands at 3.87, further supporting the notion of undervaluation compared to peers.
In comparison to its peers, Forestar Group, Inc. has a more favorable valuation profile, with Jones Lang LaSalle, Inc. at a P/E of 25.21 and Howard Hughes Holdings, Inc. at 18.48, both indicating higher valuations. Despite recent stock performance showing a decline of 17.84% over the past year compared to a 17.14% gain in the S&P 500, the long-term perspective is more favorable, as the company has achieved a 121.06% return over the last three years, outpacing the S&P 500's 70.41% return.