Lennar (LEN) AI Stock Analysis

• Market Cap: $28.47B
• Dividend Yield: 1.85%
• Average Volume (3M): 3.06M
• Price to Earnings (P/E): 7.9
• Beta (1Y): 1.30
• Revenue Growth: 2.06%
• EPS Growth: -3.67%
• Country: US
• Employees: 13,265
• Sector: Consumer Cyclical
• Sector Strength: 46
• Industry: Residential Construction
• EPS (TTM): 13.73
• Shares Outstanding: 232,685,410
• 10 Day Avg. Volume: 3,768,946
• 30 Day Avg. Volume: 3,063,632
• PEG Ratio: 1.96
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.86
• Price to Cash Flow (P/CF): 7.90
• P/FCF Ratio: 7.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $131.62
• Price Target Upside: 18.54% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 16

Lennar demonstrates strong financial performance with notable revenue growth and a solid balance sheet, though cash flow management needs improvement. Technical indicators suggest a bearish trend with potential oversold conditions. The company is attractively valued with a low P/E ratio, but earnings call insights indicate margin pressures and challenging market conditions. Strategic initiatives like the Millrose spin-off and Rausch Coleman acquisition provide some optimism despite the macroeconomic headwinds.

Positive Factors

Earnings

Lennar Corporation's normalized EPS of $2.14 beat expectations, indicating strong financial performance.

Financial Strategy

The company's significant scale and improved efficiency as a pure homebuilder position it well for future success.

Negative Factors

Margins

Increased incentives on homes sold and delivered have pressured the gross margin outlook, with expectations below consensus.

Market Conditions

Management commentary suggests a weak Spring selling season thus far, with waning consumer confidence now combining with pinched affordability to force continued aggressive sales incentives to maintain sales volume.

Profitability

Lennar's unwillingness to calibrate its production to a lower level of volume removes a potential catalyst for the stock.

Lennar Business Overview & Revenue Model

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.

How the Company Makes Money

Lennar Corporation generates revenue primarily through the sale of residential properties, including single-family homes, townhomes, and condominiums. The company's homebuilding operations are the largest contributor to its revenue, with earnings driven by the number of homes sold and the average selling price. Additionally, Lennar offers financial services, including mortgage financing, title insurance, and closing services, which supplement its core homebuilding income. Strategic partnerships and joint ventures in land acquisition and development also play a crucial role in enhancing Lennar's earnings. The company's ability to navigate market conditions, manage construction costs, and secure favorable land positions are significant factors influencing its financial performance.

Lennar Financial Statement Overview

Summary

Lennar displays strong financial health with consistent revenue growth and profitability. The balance sheet is solid with low leverage, but cash flow management could be enhanced. Overall, the company is well-positioned in the residential construction industry, although attention to cash flow consistency is advisable.

Income Statement

Lennar has demonstrated strong revenue growth, with a solid increase from the previous year. The gross profit and net profit margins remain robust, indicating efficient cost management. While there was a slight decline in EBIT and EBITDA margins compared to the previous year, profitability remains strong overall.

Balance Sheet

The company maintains a healthy balance sheet with a solid equity base. The debt-to-equity ratio is low, reflecting prudent financial management and low leverage. Return on equity has slightly decreased but remains strong, indicating effective utilization of shareholder funds.

Cash Flow

Lennar's cash flow management appears stable, though there is room for improvement. Operating cash flow has been inconsistent, with a significant decrease in the latest period. The lack of free cash flow data for the latest period limits a comprehensive evaluation.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
35.44B	34.23B	33.67B	27.13B	22.49B
	Gross Profit
8.06B	8.17B	10.47B	6.28B	3.48B
	EBIT
4.93B	5.44B	7.46B	5.79B	3.03B
	EBITDA
5.16B	5.55B	7.55B	5.88B	3.12B
	Net Income Common Stockholders
3.93B	3.94B	4.61B	4.43B	2.47B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.29B	6.51B	6.37B	2.75B	2.75B
	Total Assets
41.31B	39.23B	37.98B	33.21B	29.94B
	Total Debt
2.26B	4.98B	4.06B	4.65B	5.96B
	Net Debt
-2.40B	-1.49B	-575.30M	1.90B	3.21B
	Total Liabilities
13.29B	12.53B	13.74B	12.21B	11.84B
	Stockholders Equity
27.87B	26.58B	24.10B	20.82B	17.99B
Cash Flow		Free Cash Flow
2.23B	5.08B	3.21B	2.47B	4.12B
	Operating Cash Flow
2.40B	5.18B	3.27B	2.53B	4.19B
	Investing Cash Flow
-302.56M	-176.98M	-128.30M	-105.09M	-280.20M
	Financing Cash Flow
-3.68B	-3.25B	-1.28B	-2.40B	-2.45B

Lennar Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 111.03
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LEN, the sentiment is Negative. The current price of 111.03 is below the 20-day moving average (MA) of 117.13, below the 50-day MA of 121.93, and below the 200-day MA of 149.60, indicating a bearish trend. The MACD of -2.28 indicates Positive momentum. The RSI at 38.56 is Neutral, neither overbought nor oversold. The STOCH value of 27.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LEN.

Lennar Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DHI	78 Outperform	$38.54B	8.64	19.35%	1.14%	2.12%	1.63%
PHM	74 Outperform	$19.70B	6.65	27.40%	0.86%	11.74%	25.66%
TMHC	73 Outperform	$5.86B	7.17	15.80%	―	10.11%	19.06%
TOL	69 Neutral	$9.78B	6.77	20.38%	0.94%	5.86%	12.20%
LEN	68 Neutral	$28.47B	7.89	14.99%	1.85%	2.06%	-3.67%
NVR	66 Neutral	$21.11B	14.60	39.23%	―	10.81%	10.16%
Sector *	59 Neutral	$12.18B	11.09	-1.08%	3.77%	1.26%	-19.82%

Lennar Corporate Events

Lennar Completes Spin-off of Millrose Properties

On February 7, 2025, Lennar Corporation completed the spin-off of Millrose Properties, distributing 80% of its shares to Lennar stockholders, making Millrose an independent public company listed on the NYSE. This strategic move aligns with Lennar’s shift towards an asset-light, land-light strategy, enhancing its focus on just-in-time home production and strategic flexibility while Millrose aims to facilitate homesite purchases for Lennar and other builders.

Sidney Lapidus to Step Down from Lennar Board

On January 13, 2025, Sidney Lapidus, a long-standing member of Lennar Corporation’s Board of Directors, announced his decision not to seek re-election at the upcoming 2025 Annual Meeting. Lapidus, who has served as Chair of the Independent Directors Transactions Committee, will continue in his current roles until his term ends. His departure is not due to any disagreements with the company. In turn, the Board will reduce its size from eleven to ten members following his exit. Lapidus, a retired partner of Warburg Pincus, brought significant experience in corporate governance and business to Lennar, with his contributions recognized by Stuart Miller, the company’s Executive Chairman and Co-CEO.