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Lennar (LEN)
NYSE:LEN

Lennar (LEN) AI Stock Analysis

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LE

Lennar

(NYSE:LEN)

Rating:73Outperform
Price Target:
$123.00
▲(11.61%Upside)
Lennar's overall stock score reflects strong financial fundamentals, attractive valuation, and strategic operational focus. While technical analysis signals mixed momentum, the company's robust earnings performance and strategic initiatives underpin its potential. Economic challenges and margin pressures remain concerns but are balanced by Lennar's effective management strategies.
Positive Factors
Cost Management
Direct construction costs decreased 1.5% sequentially to the lowest level since 3Q21 and are expected to decline further.
Share Buyback
The company repurchased 4.72 million shares, which could signal confidence in future performance.
Negative Factors
Earnings Performance
The company reported earnings per share below estimates due to higher selling, general, and administrative expenses and lower deliveries.
Financial Outlook
The company lowered its price objective and earnings estimates due to a lower return on equity outlook.
Housing Market Conditions
The housing market is softening due to high mortgage rates and weaker consumer confidence, affecting Lennar.

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

Lennar Business Overview & Revenue Model

Company DescriptionLennar 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 MoneyLennar primarily generates its revenue through its Homebuilding segment, which involves the sale of residential homes. This segment includes the acquisition, development, and sale of land and residential properties. The company also earns income from its Lennar Financial Services segment by providing mortgage financing, title insurance, and closing services to its homebuyers, further enhancing the home purchasing process. Additionally, Lennar's Multifamily segment contributes to its revenue by developing, constructing, and managing multifamily rental properties. Strategic partnerships with suppliers and contractors, along with Lennar's focus on operational efficiency, also play a crucial role in optimizing costs and maximizing profitability across its various revenue streams.

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:Jun 17, 2025
(Q2-2025)
|
% Change Since: 5.35%|
Next Earnings Date:Sep 17, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced outlook with strong operational performance and strategic advancements in technology and efficiency, countered by significant challenges in the external economic environment and reduced margins.
Q2-2025 Updates
Positive Updates
Strong Home Deliveries and Sales
In Q2 2025, Lennar delivered over 20,000 homes and sold 22,601 homes, maintaining strong volume amidst a challenging market environment.
Improvement in Direct Construction Costs
Direct construction costs decreased by 1.5% sequentially from Q1 and by 3.5% year-over-year, reaching the lowest level since Q3 2021.
Advancements in Cycle Time Reduction
Cycle time for single-family detached homes decreased by 18 days year-over-year, improving efficiency by 12%.
High Capture Rate in Financial Services
Financial Services operating earnings reached $157 million, driven by higher profit per loan and increased capture rates.
Strong Inventory Management
Average of under 2 unsold completed homes per community, maintaining a balanced inventory level.
Focus on Technology Enablement
Significant investment in technology solutions like the Lennar Machine and collaboration with Palantir to enhance productivity and efficiency.
Negative Updates
Challenging Economic Environment
The housing market continues to face a challenging backdrop with high mortgage interest rates and declining consumer confidence affecting demand.
Decreased Gross Margin
Gross margin reduced to 18%, impacted by increased sales incentives and a lower-than-expected average sales price.
Elevated SG&A Expenses
SG&A expenses increased to between 8% and 8.2%, driven by investments in technology and reduced revenue leverage.
Market Softness in Key Regions
Significant market softening observed in regions like Seattle, Portland, Northern California, Phoenix, Las Vegas, and some Eastern markets.
Company Guidance
During Lennar's Second Quarter Earnings Conference Call for fiscal year 2025, the company provided guidance for the third quarter, projecting gross margins to be approximately 18%, with total home deliveries and new orders both expected to range between 22,000 to 23,000 units. The average sales price is anticipated to be between $380,000 and $385,000, reflecting ongoing pricing pressures. The company emphasized a strategic focus on maintaining volume and driving efficiencies through technology investments, despite the challenging market conditions. Lennar's SG&A expenses are projected to range from 8% to 8.2% of revenues, as the company continues its investment in technology solutions. Financial Services earnings are forecasted between $175 million and $180 million, while multifamily and other business segments are expected to incur losses. The overall EPS for the third quarter is estimated to be between $2 and $2.20 per share.

Lennar Financial Statement Overview

Summary
Lennar's financial performance is strong, with consistent revenue growth and efficient cash flow management. The conservative debt position further underscores financial stability, though the absence of stockholders' equity in the TTM period raises concerns about data consistency.
Income Statement
75
Positive
Lennar's income statement shows a stable trajectory with consistent revenue growth, evidenced by a 6.2% increase from 2023 to 2024. Gross profit margin stands strong, indicating effective cost management. Although there is a slight decline in net income from 2024 to TTM (Trailing-Twelve-Months), the company maintains healthy profitability with solid EBIT and EBITDA margins. The net profit margin remains robust, reflecting strong bottom-line performance.
Balance Sheet
68
Positive
The balance sheet reveals a conservative financial position with zero total debt in the TTM period, suggesting strong financial stability. However, the absence of stockholders' equity in the TTM data raises concerns about reporting consistency. Historically, the debt-to-equity ratio has been improving, and the equity ratio indicates a solid capital structure, though recent data limitations prevent full analysis.
Cash Flow
80
Positive
Lennar demonstrates strong cash flow management with positive operating cash flow and free cash flow figures in TTM. Although there is a decline in free cash flow from 2023 to TTM, the company efficiently covers its net income with operating cash flow, highlighting effective cash conversion. The free cash flow to net income ratio remains positive, indicating adequate cash generation to support operations.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue35.76B35.44B34.23B33.67B27.13B22.49B
Gross Profit5.28B5.50B5.94B7.20B5.54B3.47B
EBITDA4.73B4.97B5.55B6.87B5.22B3.24B
Net Income3.73B3.93B3.94B4.61B4.43B2.47B
Balance Sheet
Total Assets34.99B41.31B39.23B37.98B33.21B29.94B
Cash, Cash Equivalents and Short-Term Investments2.56B4.95B6.51B6.37B2.75B2.75B
Total Debt3.61B4.19B4.98B4.06B4.65B5.96B
Total Liabilities12.12B13.29B12.53B13.74B12.21B11.84B
Stockholders Equity22.87B27.87B26.58B24.10B20.82B17.99B
Cash Flow
Free Cash Flow1.59B2.23B5.08B3.21B2.47B4.12B
Operating Cash Flow1.75B2.40B5.18B3.27B2.53B4.19B
Investing Cash Flow-133.15M-302.56M-176.98M-128.30M-105.09M-280.20M
Financing Cash Flow-4.29B-3.68B-3.25B-1.28B-2.40B-2.45B

Lennar Technical Analysis

Technical Analysis Sentiment
Positive
Last Price110.21
Price Trends
50DMA
108.32
Positive
100DMA
112.95
Negative
200DMA
134.56
Negative
Market Momentum
MACD
0.28
Negative
RSI
52.66
Neutral
STOCH
63.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LEN, the sentiment is Positive. The current price of 110.21 is above the 20-day moving average (MA) of 108.94, above the 50-day MA of 108.32, and below the 200-day MA of 134.56, indicating a neutral trend. The MACD of 0.28 indicates Negative momentum. The RSI at 52.66 is Neutral, neither overbought nor oversold. The STOCH value of 63.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TOTOL
81
Outperform
$11.22B8.4818.09%0.87%1.59%-8.04%
DHDHI
81
Outperform
$39.53B9.7417.83%1.24%-4.71%-10.19%
PHPHM
80
Outperform
$21.15B7.4425.52%0.83%8.86%13.60%
77
Outperform
$6.15B7.1215.97%12.19%23.15%
NVNVR
76
Outperform
$21.56B15.1838.25%8.81%1.79%
LELEN
73
Outperform
$28.92B9.1113.06%1.81%-1.20%-17.61%
62
Neutral
$16.72B10.85-7.48%3.11%1.66%-24.52%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LEN
Lennar
110.21
-27.99
-20.25%
DHI
DR Horton
128.69
-7.37
-5.42%
NVR
NVR
7,375.51
-106.65
-1.43%
PHM
PulteGroup
105.52
0.09
0.09%
TOL
Toll Brothers
114.30
2.88
2.58%
TMHC
Taylor Morrison
61.28
7.00
12.90%

Lennar Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Lennar Settles $700 Million Senior Notes Offering
Positive
May 19, 2025

On May 14, 2025, Lennar Corporation entered into a delayed draw term loan credit agreement, allowing for loans up to $1.61 billion, with an option to increase by $500 million. This agreement involves major financial institutions and is intended for working capital and general corporate purposes. Additionally, on May 19, 2025, Lennar settled a $700 million offering of 5.200% Senior Notes due 2030, guaranteed by its subsidiaries. The proceeds are earmarked for general corporate purposes, including debt repayment, enhancing the company’s financial flexibility.

The most recent analyst rating on (LEN) stock is a Hold with a $164.00 price target. To see the full list of analyst forecasts on Lennar stock, see the LEN Stock Forecast page.

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: Jun 24, 2025