NEW YORK (TheStreet) – The U.S. housing market has mostly improved over the past few years, prompting investors to wonder whether now is the time to lock in profits on homebuilders such as Lennar (LEN) - Get Report, which has been able to grow its business by focusing on higher-priced homes.

Lennar shares have gained 11% this year, outperforming the 3.72% gains of the SPDR S&P Homebuilder ETF (XHB) - Get Report -- home to competing homebuilders such as Ryland Group (RYL) and D.R. Horton (DHI) - Get Report -- and the S&P 500, which has added 2.1%. 

Rather than selling shares in Lennar, there's a case to be made for holding or even buying additional stock in the Miami-based homebuilder, which reports its fiscal first-quarter numbers Thursday.

To be sure, Lennar stock was trading slightly above its average analysts' price target of $48. But the stock has a high analysts' 12-month price target of $59. That suggests some analysts are undervaluing the company. 

Analysts expect its profits to jump 29%, reaching 45 cents per share, topping last year's mark of 35 cents. In its preceding two quarters, earnings soared 47% in the fourth quarter and 44% in the third quarter.

Lennar has benefited not just from both higher sales volume. The company is also making more money on each home it sells. Lennar focuses on high-priced homes -- the type that generate higher margins. In the fourth-quarter, Lennar delivered almost 7,000 homes at an average price of roughly $330,000. The latter compares to a national average of $220,000, according to the National Association of Realtors.

For the quarter ended in February, revenue is projected to grow 10% to $1.5 billion, topping last year's mark of $1.36 billion. Full-year revenue is projected to grow 14.5% to $8.91 billion, while full-year earnings is expected to be $3.11, up 11%.

This means even if Lennar only meets Wall Street's quarterly earnings estimates Thursday, the company would still have averaged 40% earnings growth per quarter in its last three earnings results. This is after it grew full-year 2014 earnings at over 30%, according toCNN Money.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.