Lennar (NYSE:LEN) - Share price, News & Analysis

Q: What is the Fair Price of LEN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

LEN ($84.73) is trading below our estimate of [[fair value]] ($105.93)

LEN fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	0/6
Past Performance	4/6
Financial Health	6/6
Dividends	5/6

LEN Stock Overview

Lennar Corporation, together with its subsidiaries, operates as a homebuilder primarily under the Lennar brand in the United States.

Rewards

Trading at 20% below our estimate of its fair value

Earnings have grown 33.4% per year over the past 5 years

Pays a reliable dividend of 1.77%

Risk Analysis

Earnings are forecast to decline by an average of 8.9% per year for the next 3 years

Significant insider selling over the past 3 months

Lennar Competitors

D.R. Horton

NYSE:DHI

US$26.5b

NVR

NYSE:NVR

US$14.3b

PulteGroup

NYSE:PHM

US$9.8b

TopBuild

NYSE:BLD

US$6.3b

Price History & Performance

Summary of all time highs, changes and price drops for Lennar
Historical stock prices
Current Share Price	US$84.73
52 Week High	US$117.54
52 Week Low	US$62.54
Beta	1.51
1 Month Change	9.05%
3 Month Change	7.88%
1 Year Change	-18.57%
3 Year Change	69.43%
5 Year Change	62.30%
Change since IPO	2,525.56%

Recent News & Updates

Jul 25

Here's Why We Think Lennar (NYSE:LEN) Is Well Worth Watching

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even...

Jul 11

We Think Lennar (NYSE:LEN) Can Stay On Top Of Its Debt

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' It's only natural to consider a company's...

Shareholder Returns

	LEN	US Consumer Durables	US Market
7D	-0.3%	-1.0%	1.0%
1Y	-18.6%	-28.0%	-12.9%

Return vs Industry: LEN exceeded the US Consumer Durables industry which returned -28% over the past year.

Return vs Market: LEN underperformed the US Market which returned -12.8% over the past year.

Price Volatility

Is LEN's price volatile compared to industry and market?
LEN volatility
LEN Average Weekly Movement	6.3%
Consumer Durables Industry Average Movement	8.0%
Market Average Movement	7.9%
10% most volatile stocks in US Market	17.1%
10% least volatile stocks in US Market	3.2%

Stable Share Price: LEN is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: LEN's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1954	10,753	Jon Jaffe	https://www.lennar.com

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.

Lennar Fundamentals Summary

How do Lennar's earnings and revenue compare to its market cap?
LEN fundamental statistics
Market Cap	US$24.03b
Earnings (TTM)	US$4.37b
Revenue (TTM)	US$29.94b

5.6x

P/E Ratio

0.8x

P/S Ratio

Is LEN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
LEN income statement (TTM)
Revenue	US$29.94b
Cost of Revenue	US$21.20b
Gross Profit	US$8.34b
Other Expenses	US$3.97b
Earnings	US$4.37b

Last Reported Earnings

May 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	15.00
Gross Margin	27.86%
Net Profit Margin	14.60%
Debt/Equity Ratio	27.5%

How did LEN perform over the long term?

See historical performance and comparison

Dividends

1.8%

Current Dividend Yield

9%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is LEN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LEN?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for LEN. This is calculated by dividing LEN's market cap by their current preferred multiple.
What is LEN's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$24.03b

LEN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1x
Enterprise Value/EBITDA	4.3x
PEG Ratio	-0.6x

Price to Earnings Ratio vs Peers

How does LEN's PE Ratio compare to its peers?

LEN PE Ratio vs Peers

The above table shows the PE ratio for LEN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	8.3x
DHI D.R. Horton	4.8x	-12.9%	US$26.5b
NVR NVR	9.4x	-16.5%	US$14.3b
PHM PulteGroup	4.4x	-10.7%	US$9.8b
BLD TopBuild	14.7x	0.1%	US$6.3b
LEN Lennar	5.6x	-8.9%	US$24.0b

Price-To-Earnings vs Peers: LEN is good value based on its Price-To-Earnings Ratio (5.6x) compared to the peer average (8.3x).

Price to Earnings Ratio vs Industry

How does LEN's PE Ratio compare vs other companies in the US Consumer Durables Industry?

Price-To-Earnings vs Industry: LEN is good value based on its Price-To-Earnings Ratio (5.6x) compared to the US Consumer Durables industry average (8x)

Price to Earnings Ratio vs Fair Ratio

What is LEN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LEN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	5.6x
Fair PE Ratio	11.6x

Price-To-Earnings vs Fair Ratio: LEN is good value based on its Price-To-Earnings Ratio (5.6x) compared to the estimated Fair Price-To-Earnings Ratio (11.6x).

Share Price vs Fair Value

What is the Fair Price of LEN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LEN ($84.73) is trading below our estimate of fair value ($105.93)

Significantly Below Fair Value: LEN is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Lennar forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-8.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: LEN's earnings are forecast to decline over the next 3 years (-8.9% per year).

Earnings vs Market: LEN's earnings are forecast to decline over the next 3 years (-8.9% per year).

High Growth Earnings: LEN's earnings are forecast to decline over the next 3 years.

Revenue vs Market: LEN's revenue is expected to decline over the next 3 years (-0.4% per year).

High Growth Revenue: LEN's revenue is forecast to decline over the next 3 years (-0.4% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: LEN's Return on Equity is forecast to be low in 3 years time (12.5%).

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Past Performance

How has Lennar performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

33.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: LEN has high quality earnings.

Growing Profit Margin: LEN's current net profit margins (14.6%) are higher than last year (13.7%).

Past Earnings Growth Analysis

Earnings Trend: LEN's earnings have grown significantly by 33.4% per year over the past 5 years.

Accelerating Growth: LEN's earnings growth over the past year (30.8%) is below its 5-year average (33.4% per year).

Earnings vs Industry: LEN earnings growth over the past year (30.8%) underperformed the Consumer Durables industry 34.9%.

Return on Equity

High ROE: LEN's Return on Equity (20.4%) is considered high.

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Financial Health

How is Lennar's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: LEN's short term assets ($26.5B) exceed its short term liabilities ($2.5B).

Long Term Liabilities: LEN's short term assets ($26.5B) exceed its long term liabilities ($10.0B).

Debt to Equity History and Analysis

Debt Level: LEN's net debt to equity ratio (21.1%) is considered satisfactory.

Reducing Debt: LEN's debt to equity ratio has reduced from 98.6% to 27.5% over the past 5 years.

Debt Coverage: LEN's debt is well covered by operating cash flow (31.2%).

Interest Coverage: LEN's interest payments on its debt are well covered by EBIT (328.6x coverage).

Balance Sheet

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Dividend

What is Lennar current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

1.77%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: LEN's dividend (1.77%) is higher than the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: LEN's dividend (1.77%) is low compared to the top 25% of dividend payers in the US market (4.09%).

Stability and Growth of Payments

Stable Dividend: LEN's dividends per share have been stable in the past 10 years.

Growing Dividend: LEN's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (8.5%), LEN's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (24.1%), LEN's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

4.0yrs

Average management tenure

CEO

Jon Jaffe (62 yo)

1.75yrs

Tenure

US$34,045,217

Compensation

Mr. Jonathan M. Jaffe, also known as Jon, has been the Co-Chief Executive Officer and Co-President of Lennar Corporation since November 2020. He has been a Director of Lennar Corporation since April 12, 20...

CEO Compensation Analysis

Compensation vs Market: Jon's total compensation ($USD34.05M) is above average for companies of similar size in the US market ($USD13.00M).

Compensation vs Earnings: Jon's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: LEN's management team is considered experienced (4 years average tenure).

Board Members

Experienced Board: LEN's board of directors are seasoned and experienced ( 10.7 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: LEN insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/06 00:00
End of Day Share Price	2022/08/05 00:00
Earnings	2022/05/31
Annual Earnings	2021/11/30