LEN

Of course. Here is a consolidated analysis of Lennar Corporation (LEN) to determine if it is worth buying.

Overall Analysis Summary

LEN presents a compelling case of a fundamentally strong company facing cyclical headwinds. The company itself is in excellent health, with strong revenue growth, a robust balance sheet featuring low debt, and attractive valuation metrics (low P/E, P/B). However, its profitability is under pressure from margin compression, and the stock carries high volatility, reflecting the sensitivity of the homebuilding sector to interest rates and economic cycles.

Technical & Valuation Outlook The stock is in a neutral technical position, trading between its yearly highs and lows. Its valuation appears attractive, with a low P/E ratio of 11.02 suggesting the stock is inexpensive relative to its current earnings. This could represent a good entry point if you believe the housing market will stabilize.

Risk Assessment The primary risk is volatility. With a beta of 1.43, LEN's price swings are significantly more pronounced than the overall market. This is inherent to the homebuilding industry, which is highly sensitive to changes in mortgage rates and consumer confidence. The negative PEG ratio also signals concerns about future earnings growth.

Buy Recommendation

Based on this analysis, LEN is a BUY for investors with a moderate to high risk tolerance and a long-term horizon. The company's solid financial foundation, including strong liquidity and low debt, positions it well to navigate a challenging market. The current attractive valuation provides a margin of safety, making it a promising candidate for recovery and growth when the housing cycle eventually turns positive.

*Note: This is not investment advice, for reference only.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on a comprehensive analysis, here is a 12-month outlook for Lennar Corporation (LEN):

12-Month Outlook for LEN

LEN's performance over the next year will be heavily dictated by the trajectory of mortgage rates and housing market stability. Key positive catalysts include the company's exceptional financial health—featuring a strong balance sheet with low debt—which provides it significant resilience and competitive advantage to gain market share during the downturn and capitalize on any market recovery. The primary risks are cyclical, namely persistent inflation and high interest rates that could further suppress buyer demand and continue to pressure profit margins. While a specific analyst target is not provided, the current attractive valuation (P/E of ~11) suggests a potential upside if macroeconomic conditions for housing improve, with a plausible target range of $130-$150 being contingent on a modest sector recovery.

Wall Street Consensus

Most Wall Street analysts are optimistic about LEN's 12-month outlook, with consensus target around $121.39, indicating expected upside potential.

Overall, LEN has investment potential but also faces challenges. Here are key factors to weigh before investing.

LEN has demonstrated modest upside momentum despite experiencing significant volatility over the past year.

The stock has posted positive gains over both the 1-month and 3-month periods, and its relative strength of 1.22% indicates it is modestly outperforming the broader market during the latter timeframe, though its high beta suggests this performance is more volatile than the market average. Trading approximately halfway between its 52-week high and low, the price is in a neutral territory that does not clearly indicate an overbought or oversold condition based purely on its range.

Revenue & Profitability LEN demonstrated sequential revenue growth from Q3 to Q4 2025, increasing from $8.80 billion to $9.37 billion. However, profitability metrics weakened with net profit margin declining from 6.72% to 5.23% quarter-over-quarter, primarily driven by compression in gross profit margin. This suggests the company is growing top-line but facing margin pressures in its operations.

Financial Health LEN maintains a strong liquidity position with a current ratio of 4.89 and cash ratio exceeding 1.0, indicating substantial cash reserves relative to current obligations. The company's conservative debt structure is evidenced by a low debt-to-equity ratio of 0.19 and total debt-to-capitalization of just 15.7%, providing significant financial flexibility.

Operational Efficiency The company's operational efficiency shows mixed results with a modest return on equity of 2.23% and asset turnover of 0.27. The inventory turnover of 0.67 and operating cycle of 143 days reflect the capital-intensive nature of homebuilding operations, though the 9.6 days sales outstanding indicates effective receivables management.

Analysis of LEN's Valuation

Based on its current multiples, LEN appears attractively valued on several key measures. The trailing P/E of 11.02 is low and suggests the stock is inexpensive relative to its earnings, a view reinforced by the low Price-to-Book (P/B) of 1.31 and Price-to-Sales (P/S) of 0.86, indicating investors are paying a reasonable price for the company's assets and revenue. However, significant concerns are raised by the negative PEG ratio of -1.07, which implies negative earnings growth expectations, and the extraordinarily high EV/EBITDA of 49.02, signaling that the company's enterprise value is very high compared to its core operating profitability. This creates a mixed picture of apparent value undermined by weak growth and cash flow metrics.

A peer comparison cannot be definitively conducted as the specific industry average data was not provided. To determine if LEN is truly undervalued or overvalued, its P/E of 11.02, P/B of 1.31, and P/S of 0.86 would need to be benchmarked against the average ratios for the homebuilding or construction sector. Without this context, the analysis remains incomplete, though the low absolute levels of these ratios are generally a positive initial signal pending further industry comparison.

Of course. Here is a risk analysis for LEN based on the provided metrics.

LEN exhibits significant volatility risk, as indicated by its Beta of 1.434. This means the stock is approximately 43% more volatile than the broader market, likely experiencing larger swings in price. This elevated volatility is confirmed by the substantial one-year maximum drawdown of -27.81%, demonstrating that the stock has experienced severe peak-to-trough declines, which is characteristic of the cyclical homebuilding sector.

Beyond volatility, other risks are less pronounced but still present. The absence of a reported short interest figure is unusual and should be verified; however, if accurate, it suggests a lack of significant bearish sentiment from sophisticated investors. As a major homebuilder, LEN's primary non-volatility risks are macroeconomic, including sensitivity to interest rate changes, housing market fluctuations, and broader economic cycles that directly impact demand for new homes.