Is Legacy Housing Corp. overvalued or undervalued?

As of 2 August 2024, Legacy Housing Corp. has moved from an expensive to a fair valuation grade. The company is currently fairly valued based on its financial metrics, with a P/E ratio of 9, a Price to Book Value of 1.07, and an EV to EBITDA ratio of 8.84. In comparison to peers, Beazer Homes USA, Inc. has a higher P/E of 6.82 but a significantly higher EV to EBITDA of 13.54, while Hovnanian Enterprises, Inc. shows a more attractive P/E of 3.15 and an EV to EBITDA of 5.36.
Legacy Housing Corp.'s return on capital employed (ROCE) stands at 11.67%, and its return on equity (ROE) is at 11.27%, indicating solid profitability relative to its equity base. Although the stock has underperformed the S&P 500 in the year-to-date and one-year periods, it has shown resilience over the longer three and five-year horizons, outperforming the index. Overall, the valuation suggests that Legacy Housing Corp. is fairly positioned in the market.