Lennar (LEN) AI Stock Analysis

• Market Cap: $29.76B
• Dividend Yield: 1.91%
• Average Volume (3M): 2.98M
• Price to Earnings (P/E): 15.2
• Beta (1Y): 0.73
• Revenue Growth: -3.78%
• EPS Growth: -44.21%
• Country: US
• Employees: 13,265
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Residential Construction
• EPS (TTM): 1.93
• Shares Outstanding: 215,769,740
• 10 Day Avg. Volume: 2,304,089
• 30 Day Avg. Volume: 2,980,132
• PEG Ratio: -0.37
• Price to Book (P/B): 1.53
• Price to Sales (P/S): 0.98
• P/FCF Ratio: 1.19K
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 0.99
• Enterprise Value/Gross Profit: 5.62
• Enterprise Value/Ebitda: 11.45
• 1Y Price Target: $101.18
• Price Target Upside: -16.56% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 13
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: $128.00 ▲(5.56% Upside)

The score is driven primarily by weakening 2025 fundamentals—especially the sharp drop in free cash flow and margin compression—partly offset by a conservatively levered balance sheet. Technicals are currently soft (below major moving averages with negative MACD), while valuation is relatively reasonable. The latest earnings call adds a mixed outlook: strong operational execution and an asset-light strategy, but continued margin and demand headwinds in near-term guidance.

Positive Factors

Conservative Balance Sheet

Lennar’s low leverage versus peers provides lasting financial flexibility across housing cycles. Conserved debt levels support land strategy, allow opportunistic capital deployment, and reduce refinancing risk, underpinning resilience to prolonged affordability or demand shocks.

Scale and Community Growth

Sustained delivery scale and a growing community count expand geographic reach and product diversification, enabling fixed-cost absorption and stronger procurement leverage. This scale supports durable revenue potential and cross-selling via integrated financial services over multiple quarters.

Asset-Light Inventory & Liquidity

Shifting to an asset-light mix and materially lower inventory reduces capital intensity and cycle exposure. Combined with reported cash and liquidity, it improves balance-sheet optionality, enabling continued operations, targeted land JV use, and preservation of shareholder returns during downturns.

Negative Factors

Margin Compression

A sharp fall in net margins cuts durable profitability and return metrics. Lower margin structure reduces free cash generation and reinvestment capacity, making results more sensitive to cost inflation, pricing pressure and prolonged affordability headwinds over the next several quarters.

Weak Free Cash Flow

A collapse in free cash flow undermines the company’s ability to fund growth, buybacks, or weather downturns without tapping liquidity. Persistent weak cash conversion increases reliance on balance-sheet liquidity and may constrain strategic investments if market softness persists.

Affordability & Demand Headwinds

Structural affordability pressures and tepid consumer confidence reduce addressable demand and pricing power for new homes. Sustained softness in buyer affordability can depress deliveries, extend inventory cycles, and keep margins and cash flow under pressure for multiple quarters.

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 generates revenue primarily through the sale of residential homes, which includes both the construction and sale of new homes to consumers. The company also earns significant income from its financial services segment, which provides mortgage financing and related services to homebuyers. Key revenue streams include home sales, which account for the majority of its revenue, and service fees from mortgage origination and title services. Furthermore, Lennar benefits from strategic partnerships with land developers and financial institutions, allowing for efficient land acquisition and financing solutions. The company's ability to manage costs effectively and streamline operations also contributes to its profitability.

Lennar Financial Statement Overview

Summary

A strong, low-leverage balance sheet (D/E ~0.16–0.19) supports durability, but 2025 showed clear fundamental pressure: revenue dipped (~-1.7%), margins compressed sharply (net margin ~6.1% vs ~11.1% in 2024), and cash generation deteriorated materially (free cash flow ~ $28M with weak conversion vs prior multi-billion years).

Income Statement

Revenue has been resilient over the cycle, but growth has turned negative in 2025 (annual revenue down ~1.7% after modest growth in 2024). Profitability has also compressed materially: net margin fell from ~11.1% (2024) to ~6.1% (2025), and operating profitability declined as well. While the company remains profitable with solid absolute earnings, the sharp step-down in margins and earnings versus the prior two years is a clear near-term weakness.

Balance Sheet

The balance sheet looks conservatively levered for the industry, with debt-to-equity remaining low (~0.16–0.19 in the last three years) and total debt trending down from 2022 to 2025. Equity remains substantial versus assets, providing flexibility through housing cycles. Return on equity has cooled meaningfully in 2025 (~9.5% vs. ~14–19% in 2022–2024), reflecting the profitability slowdown rather than balance sheet stress.

Cash Flow

Cash generation weakened sharply in 2025: operating cash flow fell to ~$217M and free cash flow to ~$28M, far below 2023–2024 levels (multi-billion). Free cash flow also declined dramatically versus 2024, and cash conversion deteriorated as free cash flow covered only a small portion of net income in 2025 (~13%). The key strength is that the business has shown it can generate very strong cash flows in prior years, but the latest year shows elevated volatility and weaker conversion.

Breakdown	Nov 2025	Nov 2024	Nov 2023	Nov 2022	Nov 2021
Income Statement
Total Revenue	34.19B	35.48B	34.29B	33.71B	27.14B
Gross Profit	6.07B	8.01B	8.23B	9.20B	7.34B
EBITDA	2.96B	5.32B	5.33B	6.12B	5.93B
Net Income	2.06B	3.93B	3.94B	4.61B	4.43B
Balance Sheet
Total Assets	34.43B	41.31B	39.23B	37.98B	33.21B
Cash, Cash Equivalents and Short-Term Investments	3.80B	4.98B	6.56B	4.79B	2.93B
Total Debt	6.32B	4.45B	5.14B	6.36B	6.54B
Total Liabilities	12.29B	13.29B	12.53B	13.74B	12.21B
Stockholders Equity	21.96B	27.87B	26.58B	24.10B	20.82B
Cash Flow
Free Cash Flow	28.18M	2.23B	5.08B	3.21B	2.47B
Operating Cash Flow	216.81M	2.40B	5.18B	3.27B	2.53B
Investing Cash Flow	221.57M	-302.56M	-176.98M	-128.30M	-105.09M
Financing Cash Flow	-1.60B	-3.68B	-3.25B	-1.28B	-2.40B

Lennar Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 121.26
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 121.26 is above the 20-day moving average (MA) of 114.89, above the 50-day MA of 113.43, and above the 200-day MA of 117.61, indicating a bullish trend. The MACD of 2.15 indicates Negative momentum. The RSI at 62.04 is Neutral, neither overbought nor oversold. The STOCH value of 81.85 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LEN.

Lennar Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TOL	79 Outperform	$15.52B	11.70	17.03%	0.70%	1.11%	-10.03%
NVR	75 Outperform	$20.73B	17.21	33.18%	―	3.61%	-6.94%
PHM	74 Outperform	$27.20B	12.73	17.67%	0.78%	1.76%	-4.24%
DHI	73 Outperform	$48.17B	15.10	13.63%	1.14%	-6.93%	-19.41%
KBH	70 Outperform	$4.15B	10.68	10.70%	1.76%	-10.01%	-27.81%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
LEN	60 Neutral	$29.76B	15.21	8.26%	1.91%	-3.78%	-44.21%