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Are Investors Undervaluing Landsea Homes (LSEA) Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Landsea Homes (LSEA) is a stock many investors are watching right now. LSEA is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 5.87 right now. For comparison, its industry sports an average P/E of 9.92. Over the past year, LSEA's Forward P/E has been as high as 6.80 and as low as 1.72, with a median of 3.36.

Finally, we should also recognize that LSEA has a P/CF ratio of 3.62. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. LSEA's current P/CF looks attractive when compared to its industry's average P/CF of 5.91. LSEA's P/CF has been as high as 4.66 and as low as 1.97, with a median of 3.39, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Landsea Homes is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LSEA feels like a great value stock at the moment.

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