Is Landsea Homes Corp. overvalued or undervalued?

As of 10 June 2025, the valuation grade for Landsea Homes Corp. has moved from attractive to very expensive, indicating a significant shift in its market perception. The company appears to be overvalued based on its current metrics, particularly with a P/E ratio of 28, which is notably higher than its peer Beazer Homes USA, Inc. with a P/E of 11.43, and Legacy Housing Corp. at 12.32. Additionally, the EV to EBITDA ratio stands at 34.84, further suggesting that the company is priced at a premium compared to its industry peers.
In terms of return performance, Landsea Homes Corp. has outperformed the S&P 500 year-to-date with a return of 33.22% compared to the S&P 500's 12.22%. However, over the longer term, the company's returns have lagged behind the benchmark, particularly in the 3-year and 5-year periods, where it returned 48.04% and 6.3% respectively, compared to the S&P 500's 70.41% and 96.61%. This mixed performance, combined with high valuation ratios, reinforces the conclusion that Landsea Homes Corp. is currently overvalued.