Shares of Lennar (LEN) fell in after-hours trading after the homebuilder reported earnings for its third quarter of Fiscal Year 2025. Earnings per share came in at $2, which missed analysts’ consensus estimate of $2.10 per share. At the same time, sales decreased by 6.3% year-over-year, with revenue hitting $8.81 billion. This also missed analysts’ expectations of $8.97 billion.
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However, Lennar saw new orders jump by 12% to 23,004 homes, while deliveries stayed relatively flat at 21,584 homes. As a result, the company’s remaining backlog of 16,953 homes equates to a value of $6.6 billion. Furthermore, during the third quarter, LEN repurchased $507 million worth of shares at an average price of $122.97 per share.
Lennar’s executives said that the company’s third-quarter results are due to a challenging housing market where the company had to adjust prices in order to match market conditions. Nevertheless, Lennar kept up its pace by using targeted incentives, such as mortgage rate buydowns, which resulted in 4.7 sales per community each month. The company also carefully controlled inventory, ending the quarter with fewer than two unsold homes per community, which is in line with its history.
2025 Outlook
Looking forward, management now expects Q4 deliveries to be between 22,000 and 23,000, with an average sales price of $380,000 to $390,000. In addition, the company expects to receive between 20,000 and 21,000 new orders.
Is LEN a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Hold consensus rating on LEN stock based on one Buy, five Holds, and zero Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average LEN price target of $121.04 per share implies 8.9% downside risk. However, it’s worth noting that estimates will likely change following today’s earnings report.
