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1. Company Snapshot

1.a. Company Description

Lennar Corporation, together with its subsidiaries, operates as a homebuilder primarily under the Lennar brand in the United States.It operates through Homebuilding East, Homebuilding Central, Homebuilding Texas, Homebuilding West, Financial Services, Multifamily, and Lennar Other segments.The company's homebuilding operations include the construction and sale of single-family attached and detached homes, as well as the purchase, development, and sale of residential land; and development, construction, and management of multifamily rental properties.


It also offers residential mortgage financing, title insurance, and closing services for home buyers and others, as well as originates and sells securitization commercial mortgage loans.In addition, the company is involved in the fund investment activity.It primarily serves first-time, move-up, active adult, and luxury homebuyers.


Lennar Corporation was founded in 1954 and is based in Miami, Florida.

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1.b. Last Insights on LEN

Negative drivers behind Lennar Corporation's recent performance include weak Q4 2025 earnings, missing analyst estimates, and declining revenue. The company's Q4 FY25 EPS missed estimates while revenues beat, but both fell year-over-year due to weak housing demand hitting margins. Additionally, Lennar's Q4 results and 2026 outlook raised concerns amid margin pressure, highlighting challenges in the housing market's "new normal." The company's technicals are weak, but present potential buying opportunities amid a dip. Furthermore, Lennar's Q4 earnings miss estimates, with a quarterly earnings of $2.03 per share, missing the Zacks Consensus Estimate of $2.23 per share.

1.c. Company Highlights

2. Lennar's Q4 2025 Earnings: A Resilient Performance Amidst a Challenging Housing Market

Lennar reported a revenue growth driven by a strong delivery performance, with 23,034 homes delivered in Q4, and an average sales price of $386,000. The company's gross margin was 17%, and the earnings per share (EPS) came in at $2.03, slightly below the estimated $2.21. The company's financial performance was characterized by a strong cash position, with $3.4 billion of cash and total liquidity of $6.5 billion.

Publication Date: Dec -20

📋 Highlights

Operational Highlights

Lennar's operational performance was marked by a volume-oriented production-first strategy, which drove efficiencies and resulted in reduced construction costs. The company's average cycle time for single-family detached homes was 127 calendar days, matching the record low from Q3. The asset-light strategy delivered improved metrics, with the supply of owned homesites decreasing year-over-year to 0.1 years from 1.1 years, and controlled homesites increasing to 98% from 82%. As Stuart Miller, Lennar's CEO, noted, the company's focus on volume and asset-light strategy is expected to drive future growth.

Guidance and Outlook

Lennar expects its margin to remain under pressure in Q1 2026, with an expected margin of 15-16%, and sales of 18,000-19,000 homes. The company expects to deliver around 85,000 homes in 2026. The guidance suggests a cautious outlook, reflecting the challenging housing market conditions. The company's pricing strategy continuously evaluates demand patterns, inventory levels, and price discovery data to maintain the targeted sales pace.

Valuation and Return Metrics

With a P/E Ratio of 13.11 and an EV/EBITDA of 8.1, Lennar's valuation appears reasonable. The company's ROE (%) is 12.25, and ROIC (%) is 14.91, indicating a strong return on equity and invested capital. The Dividend Yield is 1.85%, providing a relatively stable income stream. The Net Debt / EBITDA ratio is -1.17, highlighting the company's net cash position.

Technology and Efficiency

Lennar has made significant progress in technology, leveraging digital engagement with customers and streamlined processes to drive efficiencies. The company's technology investments have enabled dynamic responses to market conditions, and its "machine" is expected to continue to drive future growth.

Capital Allocation

Lennar's capital allocation strategy is focused on returning cash to shareholders through dividends and repurchases. The company returned about $3.2 billion to shareholders in fiscal 2025, with $1.7 billion used to repurchase 14 million Lennar shares and $521 million paid in dividends. The company's cash balance will depend on market conditions and upcoming maturities.

3. NewsRoom

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First Look: Amazon's $200B Capex, Coinbase's SB Ad, Kroger CEO

Feb -09

Source: gurufocus.com

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Lennar (LEN) Stock Falls Amid Market Uptick: What Investors Need to Know

Feb -06

Source:

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Lennar Wants to Build "Trump Homes." Is It Time to Consider an Investment?

Feb -05

Source: fool.com

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These Homebuilder Stocks Get a Boost Following Report of Plan to Build 'Trump Homes'

Feb -04

Source: investopedia.com

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First Look: Lilly jumps; Novo warns; Walmart tops $1T

Feb -04

Source: gurufocus.com

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These Homebuilder Stocks Climb Following Report of Plan to Build 'Trump Homes'

Feb -03

Source: investopedia.com

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Market Today: Disney picks D'Amaro; PepsiCo trims prices

Feb -03

Source: gurufocus.com

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Lennar shares jump on report it's working on a ‘Trump Homes' plan

Feb -03

Source: cnbc.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.07%)

6. Segments

Homebuilding - West

Expected Growth: 5.2%

The 5.2% growth in Lennar Corporation's Homebuilding - West segment is driven by strong housing demand, favorable interest rates, and efficient land acquisition strategies. The company's focus on affordable housing, innovative construction techniques, and strategic expansion into high-growth markets also contribute to its growth momentum.

Homebuilding - East (Inc. Homebuilding Southeast Florida)

Expected Growth: 4.8%

Lennar Corporation's Homebuilding East segment, including Southeast Florida, grew 4.8% due to increased demand for new homes, driven by low interest rates, favorable demographics, and a shortage of existing inventory. The region's economic growth, job market strength, and population expansion also contributed to the segment's growth, as homebuyers took advantage of relatively affordable housing options.

Homebuilding - Central (Incl. Homebuilding Houston)

Expected Growth: 5.1%

Lennar Corporation's Homebuilding - Central segment, including Homebuilding Houston, growth of 5.1% is driven by factors such as favorable demographic trends, urbanization, low interest rates, and government incentives. Additionally, Lennar's strategic land acquisitions, efficient operating model, and adaptability to market conditions contribute to its growth.

Homebuilding - South Central

Expected Growth: 4.9%

The 4.9% growth in Lennar Corporation's Homebuilding - South Central segment is driven by strong housing demand, favorable demographics, and economic growth in the region. Additionally, the company's strategic land acquisitions, efficient operating model, and focus on affordable housing options have contributed to its success in this segment.

Homebuilding - Other

Expected Growth: 5.5%

Lennar's Homebuilding - Other segment growth of 5.5% is driven by increasing demand for housing, favorable interest rates, and efficient land acquisition strategies. The company's focus on affordable housing, innovative construction techniques, and strategic partnerships also contribute to its growth. Additionally, Lennar's ability to adapt to changing market conditions and its strong balance sheet support its expansion in the homebuilding sector.

Financial Services (Incl. Rialto)

Expected Growth: 6.0%

The Financial Services segment growth of 6.0% is driven by increased origination volumes, higher interest income, and improved profitability from Rialto, Lennar's financial services arm. This growth is also attributed to favorable market conditions, including low interest rates and increased demand for mortgage products. Efficient operations and effective risk management also contribute to this growth.

Multifamily

Expected Growth: 5.8%

Lennar Corporation's multifamily segment growth of 5.8% is driven by strong demand for rental housing, favorable demographic trends, and strategic land acquisitions. The company's focus on affordable luxury apartments and urbanization also contributes to its growth. Additionally, Lennar's expertise in multifamily development and management enables it to capitalize on market opportunities, driving revenue and profit growth.

Lennar Other

Expected Growth: 4.5%

Lennar Other's 4.5% growth is driven by increasing demand for financial services, driven by higher interest rates and an expanding mortgage market. Additionally, the segment's cyclical business, including investment and land sales, benefits from a strong housing market and limited supply, contributing to revenue growth.

7. Detailed Products

Homebuilding

Lennar Corporation's homebuilding segment focuses on constructing and selling single-family homes in the United States, primarily in the eastern, western, and southern regions.

Investment Property

Lennar Corporation also sells homes to investors, who purchase properties for rental income or resale value.

Multifamily

Lennar Corporation's multifamily segment focuses on developing, acquiring, and managing apartment communities and other multifamily properties.

Land

Lennar Corporation sells land to homebuilders, developers, and other customers for use in various projects, including residential, commercial, and industrial developments.

Financial Services

Lennar Corporation's financial services segment provides mortgage financing, title insurance, and other financial services to homebuyers and investors.

Reno

Lennar Corporation's Reno segment focuses on providing a direct-to-consumer home renovation platform for homeowners.

8. Lennar Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Lennar Corporation operates in the homebuilding industry, which has a low threat of substitutes. Customers typically require a physical location to live, and alternative options such as renting or alternative housing types (e.g., condos, townhouses) are not perfect substitutes for single-family homes.

Bargaining Power Of Customers

While individual homebuyers have some bargaining power, Lennar Corporation's large size and market share give it some negotiating power with customers. Additionally, the homebuilding industry is highly competitive, which limits the bargaining power of individual customers.

Bargaining Power Of Suppliers

The homebuilding industry has a large number of suppliers, which reduces the bargaining power of individual suppliers. Additionally, Lennar Corporation's large size allows it to negotiate favorable prices with suppliers.

Threat Of New Entrants

The homebuilding industry has relatively high barriers to entry, including land acquisition costs, regulatory requirements, and high capital requirements. However, there are still opportunities for new entrants, particularly in specific geographic markets.

Intensity Of Rivalry

The homebuilding industry is highly competitive, with a large number of competitors, including large national builders like Lennar Corporation, as well as smaller regional builders. This competition leads to pricing pressure, marketing expenses, and innovation.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 7.50%
Debt Cost 4.32%
Equity Weight 92.50%
Equity Cost 11.15%
WACC 10.64%
Leverage 8.10%

11. Quality Control: Lennar Corporation passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Quality: 7.7

Yield: 2.0

Momentum: 4.0

Volatility: 6.3

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Quality: 5.3

Yield: 3.0

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A-Score: 4.8/10

Value: 6.8

Growth: 4.3

Quality: 5.9

Yield: 3.0

Momentum: 2.5

Volatility: 6.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

119.4$

Current Price

119.4$

Potential

-0.00%

Expected Cash-Flows