If you were on the fence about dialing back some of your exposure to risky growth names, you probably aren't undecided anymore. Largely led by artificial intelligence stocks, a wide swath of growth names were upended over the course of just the past few days. It was a not-so-gentle warning of what's still a considerable valuation risk.
The irony? The same dynamic that's overvalued many growth stocks since 2023 has allowed many value stocks to become undervalued. If you're looking to get out in front of a potential reversal of this dynamic, now's the time.
Perhaps the top value prospect to consider buying here is a name you'd never expect. That's homebuilder Lennar (LEN +2.71%). Let's have a closer look.
Yes, that Lennar
That's not a misprint. While this ticker's now trading more than 36% below its 2024 peak (when the housing market itself was peaking), that sell-off arguably underestimates what awaits.
Yes, homes -- newly constructed and already built -- remain overpriced. That doesn't negate the need, though. Although estimates vary from 2 million to 8 million houses needed, no one disputes that the U.S. is facing a dire shortage of homes. If only out of necessity, more buyers are dealing with the reality that home ownership is simply going to cost a lot.
To this end, data from Zonda suggests that homebuilders expect a modest but measurable single-digit uptick in demand for new residential construction in 2026. This extends the shallow recovery the U.S. Census Bureau reports has been happening since mid-2025.
Image source: Getty Images.
This tailwind might pick up some speed soon. Although no version of any such plan has been confirmed or turned into a committed policy, the idea of an industry-backed or government-backed rent-to-own program for first-time home buyers is circulating, with Lennar suggested as one of the premise's leading proponents.
True or not, growing frustration among consumers about the affordability of housing is coming to a head. If not so-called "Trump Homes," something similar is likely in the offing.
Although Lennar isn't expected to report any revenue growth this year following 2025's slight dip, forecasts do call for top-line growth of more than 5% in 2027, when the Federal Reserve's governors expect the Fed Funds Rate to be about 50 basis points below where it is now. This will help make homes more affordable.
NYSE: LEN
Key Data Points
As cheap as it's going to get
So what's LEN stock's value? Shares are currently trading at less than 17 times 2026's expected earnings, and just over 13 times next year's projected per-share profit of $8.82. While that's not dirt cheap and will require some patience to ride out the volatility that's sure to linger this year, that's still a great price, and about as little as you can expect to pay for shares of a company that may be closer to rekindled sustained growth than you think.
Just know that most other investors -- and analysts -- aren't as optimistic here. Not only is the stock's current price above analysts' consensus of $104.42, but this ticker's been unable to keep a recovery effort going.
On the other hand, you can't buy what's already popular and expect to do well. The crowd's been wrong plenty of times before.
