4. Valuation and Potential
•Toll Brothers (TOL) and KB Home (KBH), with the lowest P/E ratios (8.22 and 8.11), appear undervalued compared to their earnings, suggesting potential for growth.
•D.R. Horton (DHI) and Lennar Corporation (LEN), while slightly higher in valuation, justify this with their scale and market penetration, making them safer long-term bets.
•Tri Pointe Homes (TPH), though smaller, offers a strong profit margin (23.3%), indicating it can outperform on a relative basis if it maintains growth in key markets like California.