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Lennar (LEN)
NYSE:LEN
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Lennar (LEN) AI Stock Analysis

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LEN

Lennar

(NYSE:LEN)

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Neutral 66 (OpenAI - 4o)
Rating:66Neutral
Price Target:
$132.00
▲(4.73% Upside)
Lennar's overall stock score reflects strong financial performance and valuation, tempered by technical challenges and cautious earnings guidance. The company's robust balance sheet and profitability are significant strengths, but recent market pressures and declining cash flow generation pose risks. Investors should monitor Lennar's ability to navigate these challenges and capitalize on its strategic initiatives.
Positive Factors
Strong Balance Sheet
A strong balance sheet with low debt levels enhances financial stability and provides flexibility for strategic investments and growth opportunities.
Operational Efficiency
Improved cycle times indicate enhanced operational efficiency, which can lead to cost savings and increased competitiveness in the homebuilding market.
Technology Advancements
Investments in technology improve operational processes and customer experience, positioning Lennar for long-term competitive advantage in the industry.
Negative Factors
Margin Pressures
Declining margins due to increased sales incentives reflect market pressures, which could impact profitability if sustained over the long term.
Market Challenges
Higher mortgage rates and declining consumer confidence can reduce housing affordability, potentially affecting sales volumes and revenue growth.
Revenue Decline
A decline in revenue growth suggests challenges in maintaining sales momentum, which could impact future earnings and strategic initiatives.

Lennar (LEN) vs. SPDR S&P 500 ETF (SPY)

Lennar Business Overview & Revenue Model

Company DescriptionLennar Corporation (LEN) is one of the largest homebuilders in the United States, primarily engaged in the design, construction, and sale of residential homes. The company operates in various segments including Homebuilding, Financial Services, and Multifamily, offering a range of products from single-family homes to multi-family communities. Lennar focuses on providing high-quality homes at various price points and serves a diverse customer base across the nation.
How the Company Makes MoneyLennar generates revenue primarily through the sale of homes, which constitutes the bulk of its earnings. The company builds and sells homes across multiple regions, targeting various demographics including first-time buyers, move-up buyers, and active adult communities. In addition to home sales, Lennar earns revenue from its Financial Services segment, which provides mortgage financing, title insurance, and closing services to homebuyers. This segment helps streamline the home purchasing process, enhancing customer experience and increasing revenue. Furthermore, Lennar's Multifamily segment contributes to its financial performance by developing and leasing multi-family rental properties. The company also engages in joint ventures and partnerships with land developers and investment firms, which can provide additional revenue streams and enhance its project pipeline.

Lennar Key Performance Indicators (KPIs)

Any
Any
EBIT by Segment
EBIT by Segment
Shows earnings before interest and taxes for each business segment, highlighting which areas are most profitable and where the company might focus future growth efforts.
Chart InsightsLennar's Homebuilding EBIT remains robust despite recent declines, reflecting strategic moves like the Millrose spin-off and Rausch Coleman acquisition, which align with their asset-light strategy. Financial Services EBIT shows resilience, with earnings projected between $135 million and $145 million, despite market challenges. The 'Other' segment's volatility highlights potential risks. Multifamily EBIT's recent spike suggests potential recovery, but overall, Lennar faces margin pressures due to increased sales incentives and challenging market conditions, as noted in their earnings call. Their strong liquidity position supports ongoing strategic initiatives.
Data provided by:Main Street Data

Lennar Earnings Call Summary

Earnings Call Date:Sep 18, 2025
(Q3-2025)
|
% Change Since: |
Next Earnings Date:Dec 10, 2025
Earnings Call Sentiment Neutral
Lennar's earnings call highlighted strong sales volume and operational efficiencies but was tempered by margin pressures and market challenges. While the company is well-positioned with a strong balance sheet and innovative strategies, the need to adjust delivery expectations and increased sales incentives indicate a cautious approach in response to current market conditions.
Q3-2025 Updates
Positive Updates
Strong Order Volume
Lennar exceeded sales expectations by selling over 23,000 homes in Q3, positioning themselves better for the remainder of the year.
Cycle Time Reduction
Achieved a 6-day sequential decrease from Q2, bringing average cycle time for single-family detached homes down to 126 days, the lowest in the company's history.
Financial Services Performance
Financial Services team had operating earnings of $177 million, driven by higher profit per loan due to increased secondary margins.
Improved Inventory Turn
Inventory turn increased to 1.9x, marking a 19% improvement from last year.
Low Debt Position
Homebuilding debt to total cap was 13.5%, with the next debt maturity of $400 million not due until June 2026.
Advancements in Technology
Continued investment in technology solutions to drive efficiencies, resulting in reduced cycle times and improved sales processes.
Negative Updates
Margin Decline
Gross margin reduced to 17.5% due to increased sales incentives, reflecting market pressures.
Market Challenges
Continued softening of market conditions with higher mortgage rates and declining consumer confidence affecting affordability.
Delivery Shortfall
Deliveries in Q3 were just below expectations, necessitating a reduction in delivery expectations for Q4 and the full year.
Pressure on Sales Incentives
Sales incentives rose to 14.3%, impacting the average sales price which came in lower than expected at $383,000.
High SG&A Costs
SG&A percentage came in at 8.2%, indicating higher operational costs, partly due to investments in technology.
Company Guidance
In Lennar's third-quarter earnings call for fiscal year 2025, the company provided guidance for the upcoming fourth quarter and full year. They anticipate delivering between 22,000 and 23,000 homes in the fourth quarter and reducing their full-year delivery expectation to between 81,500 and 82,500 homes. The gross margin for the third quarter was reported at 17.5%, with an expected continuation of this margin into the fourth quarter. Lennar's sales incentives increased to 14.3%, impacting the gross margin, while the average sales price was $383,000 in the third quarter and is expected to range between $380,000 and $390,000 in the fourth quarter. The company anticipates selling between 20,000 and 21,000 homes in the fourth quarter. Their SG&A expenses came in at 8.2%, with a net margin of 9.2%, and they expect SG&A to be between 7.8% and 8% in the next quarter. Lennar remains focused on maintaining strong volume, reducing construction costs, and managing inventory levels to ensure affordability and competitiveness despite challenging market conditions.

Lennar Financial Statement Overview

Summary
Lennar demonstrates strong profitability margins and a robust balance sheet. However, recent declines in revenue growth and cash flow generation present challenges. Continued focus on revenue growth and cash flow management is crucial for sustaining financial health.
Income Statement
70
Positive
Lennar demonstrates a consistent ability to generate revenue, with a slight decline in gross profit margin from the previous annual report to TTM (Trailing-Twelve-Months). The net profit margin remains stable, indicating effective cost management. However, a decrease in revenue compared to the prior period suggests potential challenges in sales growth. EBIT and EBITDA margins are strong, reflecting operational efficiency.
Balance Sheet
75
Positive
The company maintains a solid equity base with a decreasing debt-to-equity ratio, indicating improved financial leverage. The return on equity remains robust, showcasing effective utilization of shareholder funds. The equity ratio is strong, suggesting a stable financial structure. However, a decrease in total assets and stockholders' equity from the previous period points to some potential risk.
Cash Flow
65
Positive
Lennar's operating cash flow has decreased significantly, impacting the free cash flow negatively. The free cash flow to net income ratio reflects reduced cash conversion efficiency. While the operating cash flow to net income ratio remains healthy, indicating solid profit conversion, the negative trend in cash flows poses a concern for liquidity.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue35.37B35.44B34.23B33.67B27.13B22.49B
Gross Profit4.69B5.50B5.94B7.20B5.54B3.47B
EBITDA4.15B4.97B5.55B6.87B5.22B3.24B
Net Income3.26B3.93B3.94B4.61B4.43B2.47B
Balance Sheet
Total Assets34.37B41.31B39.23B37.98B33.21B29.94B
Cash, Cash Equivalents and Short-Term Investments1.45B4.95B6.51B4.81B2.96B2.92B
Total Debt4.21B4.19B4.98B6.20B6.38B7.42B
Total Liabilities11.64B13.29B12.53B13.74B12.21B11.84B
Stockholders Equity22.58B27.87B26.58B24.10B20.82B17.99B
Cash Flow
Free Cash Flow278.66M2.23B5.08B3.21B2.47B4.12B
Operating Cash Flow409.69M2.40B5.18B3.27B2.53B4.19B
Investing Cash Flow155.11M-302.56M-176.98M-128.30M-105.09M-280.20M
Financing Cash Flow-3.01B-3.68B-3.25B-1.28B-2.40B-2.45B

Lennar Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price126.04
Price Trends
50DMA
126.87
Negative
100DMA
118.04
Positive
200DMA
120.02
Positive
Market Momentum
MACD
-1.14
Positive
RSI
43.90
Neutral
STOCH
22.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LEN, the sentiment is Neutral. The current price of 126.04 is below the 20-day moving average (MA) of 132.76, below the 50-day MA of 126.87, and above the 200-day MA of 120.02, indicating a neutral trend. The MACD of -1.14 indicates Positive momentum. The RSI at 43.90 is Neutral, neither overbought nor oversold. The STOCH value of 22.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LEN.

Lennar Risk Analysis

Lennar disclosed 51 risk factors in its most recent earnings report. Lennar reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Lennar Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$49.85B13.4016.48%0.96%-7.31%-16.37%
78
Outperform
$25.88B9.8021.81%0.67%5.04%2.07%
78
Outperform
$13.23B10.0816.99%0.70%3.26%-6.40%
69
Neutral
$4.31B8.8814.17%1.58%-0.95%-9.08%
66
Neutral
$32.45B12.4510.65%1.57%-4.65%-32.82%
66
Neutral
$23.05B16.9539.53%5.87%-1.74%
61
Neutral
$18.38B12.79-2.54%3.03%1.52%-15.83%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LEN
Lennar
126.04
-51.36
-28.95%
DHI
DR Horton
167.20
-21.46
-11.37%
KBH
KB Home
63.28
-21.06
-24.97%
NVR
NVR
8,032.78
-1,779.02
-18.13%
PHM
PulteGroup
131.15
-11.27
-7.91%
TOL
Toll Brothers
137.22
-16.02
-10.45%

Lennar Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Lennar Announces COO Retirement and Leadership Changes
Neutral
Aug 4, 2025

On July 30, 2025, Lennar Corporation announced the retirement of its Chief Operating Officer, Fred Rothman, effective September 2, 2025. Rothman, who joined Lennar in 2006 and became COO in 2019, has been instrumental in the company’s growth and strategic initiatives. Additionally, Mark Sustana, Vice President, General Counsel, and Secretary, will retire on the same date, transitioning to a consulting role. Katherine Lee Martin will succeed Sustana as Chief Legal Officer, bringing extensive legal and compliance experience from her previous roles at Hertz and X Corp. These leadership changes mark a significant transition for Lennar, as it continues to evolve and strengthen its operations.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 23, 2025