Is LGI Homes, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for LGI Homes, Inc. moved from fair to very expensive, indicating a significant shift in its market perception. The company appears overvalued based on its current metrics, including a P/E ratio of 7, an EV to EBIT of 14.70, and an EV to EBITDA of 14.45. In comparison, peers such as Toll Brothers, Inc. have a P/E of 11.10 and Taylor Morrison Home Corp. boasts a more attractive P/E of 10.67, highlighting LGI Homes' relatively high valuation.
Recent performance also underscores this valuation concern, as LGI Homes has underperformed against the S&P 500, with a year-to-date return of -49.45% compared to the index's 13.30%. This stark contrast in returns further reinforces the notion that LGI Homes is overvalued in its current market context.