10Y annualized return is
average
at 8.9% per year
LEN has met or exceeded earnings expectations in
most
recent quarters (9/10)
Attractive Price-to-Earnings Ratio
Low Price-to-Sales Ratio
Favorable EV to EBITDA Ratio
Strong Return on Equity
Good Operating Profit Margin
Strong Liquidity Ratios
Low Debt Levels
High Interest Coverage
💪 Strong Financial Position
🔄 Asset-Light Transition
📈 Volume Focus
🚀 Strategic Acquisitions
🏗️ Demand Recovery Potential
High Price-to-Free Cash Flow Ratio
Moderate Net Profit Margin
📉 Sales Challenges
💸 Margin Pressure
⚠️ Economic Uncertainties
😟 Affordability Issues
Lennar demonstrates a solid business model with strong financials and a strategic shift towards an asset-light approach, though it faces challenges in sales and margins due to economic pressures. Future prospects hinge on market stabilization and strategic acquisitions.
Analysis Date: December 19, 2024
Last Updated: April 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Lennar Corporation is a company that builds homes for people in the United States. They create different types of houses, from single-family homes to apartments, and sell them to buyers. Lennar also helps people get loans to buy homes and provides services like insurance for home purchases. Founded in 1954 and based in Miami, Florida, Lennar serves a wide range of customers, including first-time buyers and those looking for luxury homes.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Consumer
Competitive Advantages
Key Business Risks
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$177.59
Current Market Price: $111.03
IV/P Ratio: 1.60x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
37.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for LEN
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (7.81)
P/B ratio ≤ 1.5
Current ratio ≥ 2.0 (15.81x)
Long-term debt < Net current assets (0.08x)
Margin of safety (37.0%)
LEN meets all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
14.22%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
14.78%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
10.44%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
A return on equity of 14.46% reflects effective management and a strong ability to generate profits from shareholders' equity.
The operating profit margin of 13.63% demonstrates the company's ability to retain a significant portion of revenue after covering operating expenses.
The net profit margin of 11.10% could be improved, indicating that there may be room to enhance overall profitability.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.08x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
15.81x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
The current ratio of 15.81 and quick ratio of 5.08 suggest that the company has a robust ability to meet its short-term liabilities.
A debt-to-equity ratio of 0.08 indicates that the company is conservatively financed, which reduces financial risk.
With an interest coverage ratio of 54.93, LEN is well-positioned to cover its interest obligations, indicating strong financial health.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Lennar maintains a robust balance sheet with $4.7 billion in cash and a low debt-to-capital ratio of 7.5%. This positions the company well for strategic moves and operational flexibility.
The shift towards an asset-light operational model will enhance predictability and reduce risks, allowing for more efficient land procurement and development processes.
Lennar's strategy emphasizes maintaining sales volume even amidst margin pressure, which could lead to improved long-term profitability as market conditions normalize.
The company faced a decline in new orders due to rising interest rates and affordability issues, with Q4 results missing expectations.
Increased incentives and rate buy-downs to stimulate sales have resulted in margin compression, raising concerns about sustaining profitability.
The acquisition of Rausch Coleman is expected to enhance operating efficiencies and expand market share in less entrenched segments, presenting growth opportunities.
As interest rates stabilize, pent-up demand is expected to drive sales, supported by a constrained supply of housing.
Ongoing challenges such as high inflation, interest rates, and potential tariffs may hinder market recovery and affect consumer purchasing power.
The combination of rising prices and interest rates continues to limit consumer access to home ownership, which could dampen future sales.