One of America's two largest homebuilders, selling about 80,000 new homes a year to first-time and move-up buyers, with its own mortgage lender.
Our viewNeutralMedium conviction
The scores
The profile · 1-4
Growth1/4 ↓
Revenue fell from $35.44B in fiscal 2024 to $31.97B, and earnings by two thirds since 2022, as price and margin fell.
Business quality2/4 ↓
Scale lowers building cost, but buyers compare every nearby home, and Lennar earns less per home than D.R. Horton at similar size.
Financial position3/4 →
Debt is 16.6% of capital, $2.45B of revolver is undrawn and nothing matures before June 2027; $7.2B of option deposits sit at risk.
Execution record2/4 ↓
Held volume and cut build costs, but the fiscal 2026 delivery target fell from 85,000 to 80,500 and the last margin guide was missed.
Per share capture4/4 →
Shares fell from 306.6M to about 238M since 2021 through buybacks and the Millrose exchange, well ahead of pay in shares.
Potential2/4 →
A margin recovery on 80,000 homes is worth about $1B of pretax earnings, but it waits on mortgage rates, outside Lennar's control.
Risk profile3/4 →
One serious dependency, mortgage rates, plus a founder with about 42% of the votes; customers and markets are spread widely.
Valuation3/4 ↑
About 0.82 times book for a 6% return on equity: the price pays for today's trough earnings and nothing more.
Evidence quality3/4 →
Results, the land book and the industry data are filed or published; the margin path and the incentive outlook rest on management's word.
The bet · 2-3 years
Priced for success1.4×
If it works 1.4× · if it fails you keep about 69%.
The Verdict
We rate Lennar Neutral. It is a large, well-financed builder with a mixed business: size cuts its building costs, but buyers compare every nearby home and Lennar now earns less on each sale than D.R. Horton. The price is fair: at about 0.8 times what the company owns less what it owes, the shares assume today's thin returns last, and nothing more. As a bet it is expensive: even a return to last year's profit pays less than twice today's price. The case hinges on mortgage rates, which went the wrong way this quarter.
The long caseIf mortgage rates fall back, Lennar's discounts can shrink and its margin recover on the same volume, while the shares trade below book.
The evidence under this - 6 claims
C01facthigh confidence
Lennar builds and sells single-family homes, mostly to first-time and move-up buyers, across the United States, and lends to and insures the title of most of its buyers. In fiscal 2025, to 30 November, it delivered 82,583 homes; homebuilding was $32.27B of revenue, financial services $1.198B, multifamily $681M and other $41M. It employed 12,532 people.
In the quarter to 31 August 2026 new orders fell 9% to 20,879 homes and deliveries 3% to 20,840. Revenue was $8.05B, the average sales price $372,000 against $383,000, after incentives of about 12.0%. The home sales gross margin was 15.8% against 17.5% a year earlier, SG&A 9.2%, and net earnings $284M, $1.19 a share. Backlog was 16,857 homes worth $6.3B.
historical · Q3 FY2026 (three months to 31 August 2026)written 2026-10-06
C18facthigh confidence
D.R. Horton closed 84,863 homes at an average $370,400 in its year to September 2025, with a home sales gross margin of 21.5% against 23.5%. PulteGroup closed 29,572 homes in 2025 at a home sale gross margin of 26.3% against 28.9%. Lennar delivered 82,583 at 17.7%.
historical · fiscal 2025 of each companywritten 2026-10-06
C28inferencemedium confidence
At $74.44 against about $90.6 of book a share, Lennar trades near 0.82 times book, against a six-year median near 1.45, while it earns about 6% on equity against a six-year median near 14.5%. The price assumes returns stay near today's rather than recover.
Earnings of $1.3B are a low point in the cycle: at fiscal 2024's $3.93B (C06) the same book would earn about 18%, so the price may assume too little.
current state · 2026-10-05written 2026-10-06
C23facthigh confidence
Freddie Mac's survey put the 30-year fixed mortgage rate at 7.28% on 1 October 2026, against 7.03% a week earlier, 6.34% a year earlier and about 6.1% in January 2026.
Fiscal 2025 revenue was $34.19B and net earnings $2.1B, $7.98 a share, with a 17.7% gross margin on home sales. Pretax earnings were $2.81B against $5.18B in fiscal 2024 and $5.20B in 2023. In the fourth quarter of 2025 the home sales margin was 17.0%, against 22.1% a year earlier.
Lennar builds and sells new single-family homes across the United States, mostly to first-time and move-up buyers, at an average of about $372,000. It also lends most of those buyers their mortgage and insures their title.
A buyer could instead buy an existing home, keep renting, or buy from another builder nearby. Most choose on the monthly payment rather than the price, which is why Lennar's lending arm matters: it can buy down the mortgage rate so the payment fits.
The evidence under this - 3 claims
C01facthigh confidence
Lennar builds and sells single-family homes, mostly to first-time and move-up buyers, across the United States, and lends to and insures the title of most of its buyers. In fiscal 2025, to 30 November, it delivered 82,583 homes; homebuilding was $32.27B of revenue, financial services $1.198B, multifamily $681M and other $41M. It employed 12,532 people.
On the September call the chief executive said the 30-year mortgage rate had risen from about 6.5% in June to about 7%, that almost 50% of visitors cannot immediately qualify, and that resale listings are above historic levels; the homebuilding head said about 20% of divisions face labour pressure. Lennar's mortgage arm financed 83% of buyers.
Census counted new single-family sales at 684,000 a year in August, only 2.0% below a year earlier (C20), so demand has held up better than the call's tone suggests.
current state · 2026-09-17written 2026-10-06
C16management claimmedium confidence
Lennar says it owns about 11,800 homesites and controls about 476,000, roughly six years of supply, and that 86% of the quarter's deliveries came from land-bank land; deposits rose $265M in the quarter, which management calls a temporary imbalance.
Option deposits rose to $7.236B and write-offs rose about half in nine months (C15), so the land is off the balance sheet but the risk is not.
current state · 2026-09-17written 2026-10-06
How it makes money
Almost all of the money comes from selling homes: about $7.7B of home sales in the latest quarter, against about $230M of mortgage and title revenue.
Lennar profits on the gap between the sale price and the cost of the lot and the house. It holds lots on options, paying a deposit and a fee until it buys each one just before building, so a home sold quickly turns cash fast and a slow market leaves deposits at risk.
The evidence under this - 4 claims
C01facthigh confidence
Lennar builds and sells single-family homes, mostly to first-time and move-up buyers, across the United States, and lends to and insures the title of most of its buyers. In fiscal 2025, to 30 November, it delivered 82,583 homes; homebuilding was $32.27B of revenue, financial services $1.198B, multifamily $681M and other $41M. It employed 12,532 people.
In the quarter to 31 August 2026 new orders fell 9% to 20,879 homes and deliveries 3% to 20,840. Revenue was $8.05B, the average sales price $372,000 against $383,000, after incentives of about 12.0%. The home sales gross margin was 15.8% against 17.5% a year earlier, SG&A 9.2%, and net earnings $284M, $1.19 a share. Backlog was 16,857 homes worth $6.3B.
historical · Q3 FY2026 (three months to 31 August 2026)written 2026-10-06
C37facthigh confidence
In the quarter to August 2026 financial services earned $129M, including $39M of one-time items; Lennar Other lost $84M, including a $53M mark-to-market loss on technology investments.
Lennar says it owns about 11,800 homesites and controls about 476,000, roughly six years of supply, and that 86% of the quarter's deliveries came from land-bank land; deposits rose $265M in the quarter, which management calls a temporary imbalance.
Option deposits rose to $7.236B and write-offs rose about half in nine months (C15), so the land is off the balance sheet but the risk is not.
current state · 2026-09-17written 2026-10-06
Where the money comes from, stream by stream
Stream
Share of sales (FY 2025)
How it earns it
Home sales
94%
New single-family homes delivered to buyers, about 82,600 at an average near $383,000.
Financial services
3.5%
Mortgage origination and sale, title insurance and closing services, mostly for Lennar's own buyers.
Multifamily
2%
Apartment communities developed for sale or held in funds.
Other
0.1%
Land sales, strategic technology investments and other ventures.
Who runs it
Stuart Miller is executive chairman and chief executive, and through ten-vote shares he controls about 42% of the votes. His long-time co-chief executive retired in December 2025, and Jim Parker became chief operating officer in June 2026.
His cash bonus is a share of pretax profit after a charge for the capital used, and his share awards pay on margin and returns against rivals. Berkshire Hathaway now owns about 12% of the company.
The evidence under this - 3 claims
C33facthigh confidence
Stuart Miller is executive chairman, chief executive and president; co-chief executive Jon Jaffe retired on 31 December 2025, and Jim Parker became chief operating officer on 5 June 2026. Diane Bessette is chief financial officer.
Class B shares carry ten votes each. Stuart Miller owns 70.2% of the Class B and about 42% of the votes; directors and officers own 1.4% of the Class A. The cash bonus is a share of pretax income after a 7.3% charge on tangible capital, capped at $7.0M, and performance shares vest equally on relative gross margin, relative return on tangible capital, relative shareholder return and debt to EBITDA over 2025 to 2027. Miller's 2025 pay was $29.5M.
Berkshire Hathaway became a 10% holder in September 2026 and bought more in the open market on 1 and 2 October at about $77 to $82; it then held 28,438,045 Class A and 568,028 Class B shares, about 12% of the company. No insider sold in the pack's window.
Size is Lennar's advantage. It buys materials and labour for about 80,000 homes a year, and it says its building cost per square foot is down 14% since late 2023.
But size has not bought it pricing. A buyer compares every new and resale home nearby, and in September 38% of builders cut prices. D.R. Horton sells about as many homes at a similar price and earned 21.5% on each sale last year, against Lennar's 17.7%. Lennar blames land and option fees.
The evidence under this - 5 claims
C35inferencemedium confidence
Scale has not made Lennar the cheapest builder: at D.R. Horton's volume and price point it earned about 4 points less gross margin in fiscal 2025, and its land-light model turns land cost into option fees that show up in that margin.
Lennar says its construction cost per square foot fell 14% since late 2023 (C11), and it held volume while rivals' margins also fell (C18).
current state · 2026-09-30written 2026-10-06
C18facthigh confidence
D.R. Horton closed 84,863 homes at an average $370,400 in its year to September 2025, with a home sales gross margin of 21.5% against 23.5%. PulteGroup closed 29,572 homes in 2025 at a home sale gross margin of 26.3% against 28.9%. Lennar delivered 82,583 at 17.7%.
historical · fiscal 2025 of each companywritten 2026-10-06
C02facthigh confidence
Fiscal 2025 revenue was $34.19B and net earnings $2.1B, $7.98 a share, with a 17.7% gross margin on home sales. Pretax earnings were $2.81B against $5.18B in fiscal 2024 and $5.20B in 2023. In the fourth quarter of 2025 the home sales margin was 17.0%, against 22.1% a year earlier.
On the September call the chief executive said construction cost is about $80 a square foot, down 6% in a year and 14% since late 2023, while revenue per square foot is down 13%; land cost per homesite is up about 6% and option fees have risen, which he called the entire margin gap. Build time was a record 116 days.
D.R. Horton and PulteGroup earned 21.5% and 26.3% home margins in their last years against Lennar's 17.7% (C18), so the gap is not only land bought in a different market.
current state · 2026-09-17written 2026-10-06
C22facthigh confidence
The NAHB/Wells Fargo builder confidence index fell three points to 32 in September 2026; 38% of builders cut prices, by 6% on average, and 66% used incentives, the most since December.
The threat is not a new technology but the house next door. D.R. Horton can cut further because it earns more per home, existing homes for sale are unusually plentiful in Texas and Florida, and smaller builders are cutting prices too. Lennar has to match them to keep its volume.
The evidence under this - 4 claims
C18facthigh confidence
D.R. Horton closed 84,863 homes at an average $370,400 in its year to September 2025, with a home sales gross margin of 21.5% against 23.5%. PulteGroup closed 29,572 homes in 2025 at a home sale gross margin of 26.3% against 28.9%. Lennar delivered 82,583 at 17.7%.
historical · fiscal 2025 of each companywritten 2026-10-06
C12management claimmedium confidence
On the September call the chief executive said the 30-year mortgage rate had risen from about 6.5% in June to about 7%, that almost 50% of visitors cannot immediately qualify, and that resale listings are above historic levels; the homebuilding head said about 20% of divisions face labour pressure. Lennar's mortgage arm financed 83% of buyers.
Census counted new single-family sales at 684,000 a year in August, only 2.0% below a year earlier (C20), so demand has held up better than the call's tone suggests.
current state · 2026-09-17written 2026-10-06
C19facthigh confidence
Lennar's 10-K says it competes for buyers with national, regional and local homebuilders, with resales of existing homes and with the rental market. NVR, a peer, does not develop land and buys finished lots under purchase agreements backed by forfeitable deposits.
The NAHB/Wells Fargo builder confidence index fell three points to 32 in September 2026; 38% of builders cut prices, by 6% on average, and 66% used incentives, the most since December.
The rivals:DHI, KBH, PHM, NVR, and 3 more that are private, in-house or listed abroad.
Who else does this, rival by rival
Ticker
Rival
Where it competes
How far along
Priced against it
DHI
D.R. HortonPriced against it: Yes
Homebuilding
On sale
Yes
Not listed
Sellers of existing homesPriced against it: Not listed
Homebuilding
On sale
Not listed
Private
Regional and local private buildersPriced against it: Private
Homebuilding
On sale
Private
Not listed
Banks and non-bank mortgage lendersPriced against it: Not listed
Financial services
On sale
Not listed
KBH
KB HomePriced against it: Yes
-
On sale
Yes
PHM
PulteGroupPriced against it: Yes
-
On sale
Yes
NVR
NVRPriced against it: Yes
-
On sale
Yes
03
How big it could get
How big this could get
Americans bought new single-family homes at a pace of 684,000 a year in August 2026, at a median price of $393,700: a market of roughly $270B a year. Lennar delivers about one in eight of them.
The market grows mainly if rates fall. Estimates of the housing shortage run from 1.5 million to 3.8 million homes or more, but Harvard's housing centre expects slower household growth and lower immigration to dampen demand.
The evidence under this - 4 claims
C20factmedium confidence
Census counted new single-family home sales at a seasonally adjusted 684,000 a year in August 2026, 2.0% below August 2025. Homes for sale were 483,000, 8.5 months' supply, and the median new-home price was $393,700, 5.8% below a year earlier.
Lennar delivers about one in eight new single-family homes sold in the United States: its fiscal 2026 target of 80,000 to 81,000 against Census's 684,000 a year is about 12%.
Census counts a sale when the contract is signed and Lennar counts a delivery at closing, and Census's sampling margin on the monthly rate is wide (C20), so the share is approximate.
current state · 2026-09-30written 2026-10-06
C25factmedium confidence
Brookings reports that estimates of the US housing shortage vary widely with method: the NAHB's is 1.5 million units, Freddie Mac's 3.8 million and another 5.5 million.
Harvard's Joint Center says household growth has slowed sharply and reduced immigration is expected to dampen housing demand further (C26).
current state · 2026-10-06written 2026-10-06
C26factmedium confidence
Harvard's Joint Center for Housing Studies reported in June 2026 that household growth has slowed sharply, residential mobility is at a record low and reduced immigration is expected to further dampen housing demand.
Where the growth is coming from, business by business
Where the growth is coming from
Business
Share of revenue
Growth: last quarter
Last half-year
Last year
Share in 3 years at its half-year rate
Homebuilding
96%
-6.0%
-9.5%
-6.1%
98%
Financial services
3%
-28.0%
-25.3%
-7.3%
2%
Rest of the company
1%
-68.6%
-41.4%
-16.6%
0%
Whole company
100%
-8.8%
-10.8%
-6.4%
100%
On the filed split through 2026-08-31, if each business keeps its last half-year's growth, the company grows about -10% next year and -10% in year 3, against -8.0% over the last twelve months. A scenario, not a forecast: no business holds its rate.
04
The results
The numbers
Is it growing?Shrinking
Sales fell 8.0% over the twelve months to Aug 2026, about the same pace as the −3.5% in the year to Nov 2025.
Is it profitable?Thin
It keeps 4.1% of sales as profit, down from 12% in the year to Nov 2023.
How steady is it?Uneven
Yearly sales growth has ranged from −3.5% to +24% over the last 5 years, with sales falling in 1 of them.
Does it earn good returns?Low
Shareholders' money earned 5.9% a year, down from 23% in the year to Nov 2021.
Is it making cash?Thin
It turned 2.5% of sales into free cash, $811M over the last twelve months.
Is profit turning into cash?Partly
Free cash flow was 0.6 times net income.
Are shares being diluted?Shrinking
The share count fell 22% in 4.8 years, and pay in shares costs 0.4% of sales.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-06. Fiscal years end in November.
Nov 2021
Nov 2022
Nov 2023
Nov 2024
Nov 2025
12 mo to Aug 2026
Size and growth
Sales
$27.1B
$33.7B
$34.2B
$35.4B
$34.2B
$32.0B
Sales growth
+21%
+24%
+1.7%
+3.5%
−3.5%
−8.0%
Profit
Net margin
16%
14%
12%
11%
6.1%
4.1%
What growth costs, per sales dollar
General and admin
1.5%
-
1.5%
1.8%
1.9%
1.9%
Pay in shares
0.5%
0.5%
0.5%
0.5%
0.5%
0.4%
Capital spending
0.2%
0.2%
0.3%
0.5%
0.6%
0.4%
Cash
Cash from operations
$2.53B
$3.27B
$5.18B
$2.40B
$217M
$937M
Free cash flow
$2.47B
$3.21B
$5.08B
$2.23B
$28.2M
$811M
Balance sheet
Cash and short-term investments
-
-
-
$4.91B
$3.76B
-
Debt
-
-
-
$4.19B
$5.87B
-
Net cash
-
-
-
$720M
−$2.12B
-
Returns and shares
Shares (diluted)
307M
290M
283M
272M
-
238M
What growth costs
Growth has been bought with margin. Lennar delivered more homes in fiscal 2025 than in 2024, yet profit fell nearly half, because incentives rose from 8.8% of the price in 2023 to 13.8%. Holding volume has narrowed the margin rather than widened it.
The evidence under this - 4 claims
C02facthigh confidence
Fiscal 2025 revenue was $34.19B and net earnings $2.1B, $7.98 a share, with a 17.7% gross margin on home sales. Pretax earnings were $2.81B against $5.18B in fiscal 2024 and $5.20B in 2023. In the fourth quarter of 2025 the home sales margin was 17.0%, against 22.1% a year earlier.
In the quarter to 31 August 2026 new orders fell 9% to 20,879 homes and deliveries 3% to 20,840. Revenue was $8.05B, the average sales price $372,000 against $383,000, after incentives of about 12.0%. The home sales gross margin was 15.8% against 17.5% a year earlier, SG&A 9.2%, and net earnings $284M, $1.19 a share. Backlog was 16,857 homes worth $6.3B.
historical · Q3 FY2026 (three months to 31 August 2026)written 2026-10-06
C06facthigh confidence
Revenue was $27.13B in fiscal 2021, $33.67B in 2022, $34.23B in 2023, $35.44B in 2024 and $34.19B in 2025; net earnings $4.43B, $4.61B, $3.94B, $3.93B and $2.08B. Diluted shares fell from 306.6M in 2021 to 289.8M, 283.3M, 272.0M and 237.8M over the four quarters to August 2026.
historical · FY 2021 to the four quarters to 31 August 2026written 2026-10-06
The last report (16 Sep)
Quarter ended August 2026, filed figures.
-9%
Sales growth
against the same quarter a year earlier
1.3%
Growth from the quarter before
against 19.9% the quarter before that
In the quarter to August 2026 Lennar delivered 20,840 homes, 3% fewer than a year earlier, and took 9% fewer orders. To keep homes selling it gave buyers about 12% of the price in incentives, so the margin on a home fell to 15.8% from 17.5%, just short of the 16% it had promised in June.
It also cut its target for the year a second time, to 80,000 to 81,000 homes, from about 85,000 in December. For the quarter to November it expects a margin of 15.5% to 16% on 22,000 to 23,000 homes.
What it did to the thesisIt confirmed the thesis's central worry: Lennar is holding volume by giving up margin, and higher mortgage rates pushed the recovery further out. It proved the building-cost savings are real but showed they are not enough to offset land costs and discounts.
The quarter in detail
6.3%Q4 25
-29.3%Q1 26
19.9%Q2 26
1.3%Q3 26
Sales growth from the previous quarter, filed figures. The company has restated its own history, so a quarter either side of the restatement may describe a different business; n/c marks one that does not compare.
Earnings per share $1.23 against $1.28 expected; $1.19 as filed, the gap being what the company adds back.
The evidence under this - 5 claims
C04facthigh confidence
In the quarter to 31 August 2026 new orders fell 9% to 20,879 homes and deliveries 3% to 20,840. Revenue was $8.05B, the average sales price $372,000 against $383,000, after incentives of about 12.0%. The home sales gross margin was 15.8% against 17.5% a year earlier, SG&A 9.2%, and net earnings $284M, $1.19 a share. Backlog was 16,857 homes worth $6.3B.
historical · Q3 FY2026 (three months to 31 August 2026)written 2026-10-06
C07management claimmedium confidence
For the quarter to November 2026 Lennar guides to 19,500 to 20,500 new orders, 22,000 to 23,000 deliveries at an average price of $370,000 to $380,000, a home sales gross margin of 15.5% to 16.0% and SG&A of 8.7% to 9.0%, with about 235M shares.
The June release guided the August quarter's margin to about 16% and it came in at 15.8% (C09); the full-year delivery target was cut twice (C08).
forwardwritten 2026-10-06
C08facthigh confidence
The December 2025 release expected about 85,000 deliveries for fiscal 2026. The June 2026 release spoke of 82,000 to 83,000, and the September release moderated the target to 80,000 to 81,000 homes.
historical · December 2025 to September 2026written 2026-10-06
C09facthigh confidence
The June 2026 release expected the August quarter's gross margin to improve to about 16% as incentives moderated; it came in at 15.8%, with incentives at about 12.0% against 12.9% in the May quarter.
In the quarter to August 2026 financial services earned $129M, including $39M of one-time items; Lennar Other lost $84M, including a $53M mark-to-market loss on technology investments.
Management has shrunk the share count rather than chased growth: it spun its land into Millrose, retired 8 million shares through that exchange and bought back $993M of stock in nine months, while paying $366M of dividends.
Insiders in 2026Q3: 40 purchases and 0 sales, from their Form 4 filings.
The evidence under this - 2 claims
C17facthigh confidence
In February 2025 Lennar spun off Millrose, contributing $5.6B of land and $1.0B of cash, and bought Rausch Coleman's homebuilding operations; a November 2025 exchange offer retired 8.05M Lennar shares at a $156M loss. In the August 2026 quarter it bought back 3M shares at an average $85.49, $256M, with $751M of authority left.
historical · February 2025 to August 2026written 2026-10-06
C05facthigh confidence
Over the four quarters to 31 August 2026 revenue was $31.97B, net earnings $1.308B and cash from operations $937M, on 237.8M diluted shares. Over the nine months to August, cash from operations was minus $822M against minus $1,543M a year earlier, after $366M of dividends and $993M of buybacks.
historical · four quarters to 31 August 2026written 2026-10-06
05
The price, and where we disagree
In short. Fair. The price pays for today's thin returns and assumes no recovery, which is reasonable while mortgage rates stay above 7%.
Share price
$74.44
close,
Price for each $1 of net worth
0.9
rivals' middle 1.6 · its 6-year normal 1.4
The shares fell 42% in a year, and almost all of that was investors paying less for the same sales rather than sales falling. After the September results they touched a 52-week low, then jumped when Berkshire Hathaway's stake became known.
The next test is the December 15 report. Mortgage rates rose to 7.28% on 1 October, so the spring selling season is likely to start with incentives still high.
The evidence under this - 5 claims
C27facthigh confidence
Lennar closed at $74.44 on 5 October 2026, near the bottom of a 52-week range of $73.75 to $133.76. Over 252 sessions the shares fell 42% while revenue per share fell 1.1%, so almost all of the fall was a lower multiple.
After the full-year results on 16 December 2025, with fourth-quarter earnings below estimates and a 17.0% margin, the shares fell from $119.73 to $108.33 in two sessions. After the September 2026 results cut the delivery target, they fell from $80.07 to $76.43, then rose to $83.06 on 22 September as Berkshire's stake became known.
historical · December 2025 to September 2026written 2026-10-06
C32facthigh confidence
Berkshire Hathaway became a 10% holder in September 2026 and bought more in the open market on 1 and 2 October at about $77 to $82; it then held 28,438,045 Class A and 568,028 Class B shares, about 12% of the company. No insider sold in the pack's window.
Freddie Mac's survey put the 30-year fixed mortgage rate at 7.28% on 1 October 2026, against 7.03% a week earlier, 6.34% a year earlier and about 6.1% in January 2026.
Analysts expect earnings of $4.89 a share for fiscal 2026, $5.35 for 2027 and $6.57 for 2028; the next report is due on 15 December 2026, with $1.48 expected. Lennar beat the earnings estimate in one of its last eight reports.
of today's market value: what the worst case leaves shareholders
How we read the multiple
We value a builder against its net worth, what it owns less what it owes, because its assets are land, homes and cash that turn over within a few years.
What it lacks today is return on those assets.
Net worth is about $90.6 a share.
Over the last year Lennar earned about 6% on that net worth.
In fiscal 2024 the same business earned about 18%.
At 0.82 times net worth, the price pays for the 6% and nothing for a return toward the 18%.
Against its own history. Far below its own normal, because it earns far less on its net worth than it used to; the discount matches the drop in returns.
The evidence under this - 5 claims
C28inferencemedium confidence
At $74.44 against about $90.6 of book a share, Lennar trades near 0.82 times book, against a six-year median near 1.45, while it earns about 6% on equity against a six-year median near 14.5%. The price assumes returns stay near today's rather than recover.
Earnings of $1.3B are a low point in the cycle: at fiscal 2024's $3.93B (C06) the same book would earn about 18%, so the price may assume too little.
current state · 2026-10-05written 2026-10-06
C14facthigh confidence
At 31 August 2026 there were 207,876,222 Class A and 30,024,017 Class B shares, 237.9M in all, so stockholders' equity of $21.559B is about $90.6 a share, and about $76.2 a share after $3.442B of goodwill.
Over the four quarters to 31 August 2026 revenue was $31.97B, net earnings $1.308B and cash from operations $937M, on 237.8M diluted shares. Over the nine months to August, cash from operations was minus $822M against minus $1,543M a year earlier, after $366M of dividends and $993M of buybacks.
historical · four quarters to 31 August 2026written 2026-10-06
C29factmedium confidence
The vendor puts Lennar at 0.85 times book against a six-year median of 1.45, and at 14.6 times trailing earnings against a median of 9.5. Among its four filed peers, D.R. Horton, PulteGroup, NVR and KB Home, the median is 1.65 times book and 12.8 times earnings, with KB Home lowest on book at 0.7.
Revenue was $27.13B in fiscal 2021, $33.67B in 2022, $34.23B in 2023, $35.44B in 2024 and $34.19B in 2025; net earnings $4.43B, $4.61B, $3.94B, $3.93B and $2.08B. Diluted shares fell from 306.6M in 2021 to 289.8M, 283.3M, 272.0M and 237.8M over the four quarters to August 2026.
The middle of the other 4 is 1.6. Lennar Corporation is 2nd cheapest of 5.
Rivals' figures come from a data provider, so read the spread of the group rather than any single pair.
Below its rivals because it earns less than most of them on each dollar of net worth; the gap is Lennar's own, not the group's.
Also checked and set aside: Toll Brothers (a substitute, not the same product).
Private or foreign rivals that cannot be priced: Resales of existing homes, Regional and local private builders.
The bet: what it pays if it works
The bet is that mortgage rates fall, Lennar's discounts shrink and its profit climbs back to last year's level on the same number of homes.
Even that pays well under twice today's price at what rivals' shares fetch for each dollar of profit. If it fails and Lennar writes off its land-bank deposits, shareholders could lose about a third.
Earnings in two to three years
Homes delivered needed
Valued like its peers
Like the cheapest
$1.55B
about 92.6K at 4% kept
1.0×
1.0×
$2.10B (the big win)
about 125.4K at 4% kept
1.4×
1.3×
$3.00B
about 179.2K at 4% kept
2.0×
1.8×
To pay 2× (a Fair bet) it would need about $3.00B of earnings (about 179.0K homes delivered at 4% kept); to pay 5× (a Cheap bet), about $7.49B of earnings (about 447.5K homes delivered at 4% kept), at the same multiple.
The steps it has to take
●Done Construction cost per square foot cut 14% from late 2023
◐Slipped Home margin back above 16% due 2027-02-28
○Not started Incentives below 9% of the price due 2027-11-30
○Not started 30-year mortgage rate back near 6% due 2027-11-30
The detail behind the label
Rating
Expensive
the big win's payoff against the 2× and 5× lines
Valued like the cheapest
1.3×
the same success, the lowest comparison
Cheap bet at about
$20.87
72% below the price (close, )
The evidence under this - 6 claims
C02facthigh confidence
Fiscal 2025 revenue was $34.19B and net earnings $2.1B, $7.98 a share, with a 17.7% gross margin on home sales. Pretax earnings were $2.81B against $5.18B in fiscal 2024 and $5.20B in 2023. In the fourth quarter of 2025 the home sales margin was 17.0%, against 22.1% a year earlier.
The chief executive said in June that the gap between incentives of 12.9% and normalised levels of 4% to 6% was narrowing for the first time in three years.
Incentives were still about 12.0% in the August quarter (C04), mortgage rates rose to 7.28% (C23), and 66% of builders used incentives in September, the most since December (C22).
forwardwritten 2026-10-06
C15facthigh confidence
At 31 August 2026 Lennar had $7.236B of non-refundable option deposits and pre-acquisition costs, $2.7B of them with three land banks including $1.3B with Millrose, and $423M of letters of credit. It was compelled to take down $951.6M of optioned land. Over nine months, valuation adjustments and option write-offs were $223.9M against $146.9M; 184 communities showed impairment indicators against 113, and 38 were written down by $100.0M against 21 and $25.6M.
At 31 August 2026 homebuilding had $1.15B of cash and $4.297B of debt: $650M drawn on a $3.1B revolver, a $1.705B term loan due May 2028, and notes including $350M at 5.00% and $699M at 4.75% due in 2027 and $695M at 5.20% due 2030. Debt was 16.6% of capital, 12.7% net of cash. Stockholders' equity was $21.559B, including $3.442B of goodwill. Lennar redeemed $400M of notes in June.
The vendor puts Lennar at 0.85 times book against a six-year median of 1.45, and at 14.6 times trailing earnings against a median of 9.5. Among its four filed peers, D.R. Horton, PulteGroup, NVR and KB Home, the median is 1.65 times book and 12.8 times earnings, with KB Home lowest on book at 0.7.
Margins keep falling as Lennar buys volume with discounts; analysts are cutting targets and few rate it a buy.
We believe
That is right, and already in a price that pays only for today's thin profit; it is fair, not cheap.
We mostly agree with the market on the business. Where we part is on the price: the analysts' pessimism and the fall have already priced the trough, so we see neither a bargain nor a trap.
The case against us runs both ways. Berkshire's buying says a patient owner sees value below net worth. The market's record says each margin cut was followed by another.
What analysts say, and the evidence
Analysts positive
10%
of 20, 1 Oct
Four months earlier
10%
of 20, 1 Jun
The evidence under this - 5 claims
C30facthigh confidence
Of 20 analysts, 2 rated Lennar a buy, 9 a hold and 9 a sell on 1 October 2026, 10% positive against 15.8% in February; the average price target fell 22.9% over the year. Short interest was 18.17M shares, 8.8% of the float, on 15 September.
Lennar closed at $74.44 on 5 October 2026, near the bottom of a 52-week range of $73.75 to $133.76. Over 252 sessions the shares fell 42% while revenue per share fell 1.1%, so almost all of the fall was a lower multiple.
At $74.44 against about $90.6 of book a share, Lennar trades near 0.82 times book, against a six-year median near 1.45, while it earns about 6% on equity against a six-year median near 14.5%. The price assumes returns stay near today's rather than recover.
Earnings of $1.3B are a low point in the cycle: at fiscal 2024's $3.93B (C06) the same book would earn about 18%, so the price may assume too little.
current state · 2026-10-05written 2026-10-06
C32facthigh confidence
Berkshire Hathaway became a 10% holder in September 2026 and bought more in the open market on 1 and 2 October at about $77 to $82; it then held 28,438,045 Class A and 568,028 Class B shares, about 12% of the company. No insider sold in the pack's window.
After the full-year results on 16 December 2025, with fourth-quarter earnings below estimates and a 17.0% margin, the shares fell from $119.73 to $108.33 in two sessions. After the September 2026 results cut the delivery target, they fell from $80.07 to $76.43, then rose to $83.06 on 22 September as Berkshire's stake became known.
historical · December 2025 to September 2026written 2026-10-06
06
What could go wrong, and how we would know
The risks
Rates stay high With mortgage rates above 7%, incentives stay near 12% and the margin cannot recover, whatever Lennar does on cost.
Land deposits written off Lennar has $7.236B of option deposits; walking away from lots bought for a better market would cut its net worth directly.
Rivals can cut deeper D.R. Horton earns more per home, so a price war hurts Lennar's thinner margin first.
Volume slips too The yearly delivery target has been cut twice; if orders keep falling, fixed costs squeeze the margin from the other side.
One family controls Stuart Miller holds about 42% of the votes through ten-vote shares, so outside owners have limited say.
The evidence under this - 5 claims
C23facthigh confidence
Freddie Mac's survey put the 30-year fixed mortgage rate at 7.28% on 1 October 2026, against 7.03% a week earlier, 6.34% a year earlier and about 6.1% in January 2026.
At 31 August 2026 Lennar had $7.236B of non-refundable option deposits and pre-acquisition costs, $2.7B of them with three land banks including $1.3B with Millrose, and $423M of letters of credit. It was compelled to take down $951.6M of optioned land. Over nine months, valuation adjustments and option write-offs were $223.9M against $146.9M; 184 communities showed impairment indicators against 113, and 38 were written down by $100.0M against 21 and $25.6M.
D.R. Horton closed 84,863 homes at an average $370,400 in its year to September 2025, with a home sales gross margin of 21.5% against 23.5%. PulteGroup closed 29,572 homes in 2025 at a home sale gross margin of 26.3% against 28.9%. Lennar delivered 82,583 at 17.7%.
historical · fiscal 2025 of each companywritten 2026-10-06
C34facthigh confidence
Class B shares carry ten votes each. Stuart Miller owns 70.2% of the Class B and about 42% of the votes; directors and officers own 1.4% of the Class A. The cash bonus is a share of pretax income after a 7.3% charge on tangible capital, capped at $7.0M, and performance shares vest equally on relative gross margin, relative return on tangible capital, relative shareholder return and debt to EBITDA over 2025 to 2027. Miller's 2025 pay was $29.5M.
The December 2025 release expected about 85,000 deliveries for fiscal 2026. The June 2026 release spoke of 82,000 to 83,000, and the September release moderated the target to 80,000 to 81,000 homes.
historical · December 2025 to September 2026written 2026-10-06
What we still do not know
How much of the $7.236B of option deposits sits on lots Lennar would no longer buy at today's prices.
Whether Lennar's building cost per square foot is lower than D.R. Horton's on comparable homes; no rival publishes the figure.
Whether Berkshire Hathaway keeps buying, and whether it seeks any say in how the company is run.
The evidence under this - 3 claims
C15facthigh confidence
At 31 August 2026 Lennar had $7.236B of non-refundable option deposits and pre-acquisition costs, $2.7B of them with three land banks including $1.3B with Millrose, and $423M of letters of credit. It was compelled to take down $951.6M of optioned land. Over nine months, valuation adjustments and option write-offs were $223.9M against $146.9M; 184 communities showed impairment indicators against 113, and 38 were written down by $100.0M against 21 and $25.6M.
On the September call the chief executive said construction cost is about $80 a square foot, down 6% in a year and 14% since late 2023, while revenue per square foot is down 13%; land cost per homesite is up about 6% and option fees have risen, which he called the entire margin gap. Build time was a record 116 days.
D.R. Horton and PulteGroup earned 21.5% and 26.3% home margins in their last years against Lennar's 17.7% (C18), so the gap is not only land bought in a different market.
current state · 2026-09-17written 2026-10-06
C32facthigh confidence
Berkshire Hathaway became a 10% holder in September 2026 and bought more in the open market on 1 and 2 October at about $77 to $82; it then held 28,438,045 Class A and 568,028 Class B shares, about 12% of the company. No insider sold in the pack's window.
○The shares fall to 0.65 times net worth, cheaper than any listed rival.about $61.36 today, 18% below the last close
Neutral→AttractiveMargins recover on held volume
It needs all of:
○The margin on a home is above 18% for two quarters in a row.checked at the next results, due by 15 Dec
○Lennar still delivers at least 20,000 homes a quarter while it does.checked at the next results, due by 15 Dec
Neutral→UnattractiveThe land turns into losses
It needs any of:
○Write-offs on land and deposits pass $300M in a quarter.checked at the next results, due by 15 Dec
○The margin on a home falls below 15% in a quarter.checked at the next results, due by 15 Dec
We would also be wrong if
Lennar's debt rises above a quarter of its capital.
What is coming
15 December 2026 Q4 fiscal 2026 results: Whether the margin holds 15.5% to 16% on 22,000 to 23,000 deliveries, and the delivery target for fiscal 2027.
Every dated event ahead
15 December 2026 Q4 fiscal 2026 results: Whether the margin holds 15.5% to 16% on 22,000 to 23,000 deliveries, and the delivery target for fiscal 2027.
31 January 2027 Fiscal 2026 10-K: A full year of option write-offs and impairments, and deposits by land bank.
31 March 2027 Q1 fiscal 2027 results: Whether incentives fall below 12% in the spring selling season.
Since we wrote this
Written
6 Oct
Price the thesis read
$74.44
5 Oct
6 OctThesis writtenNeutral, medium convictionWritten three weeks after the September results cut the delivery target again, with Berkshire buying and the shares at a 52-week low.
Sources 19
Where this came from
Sources - 19
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
Residential mobility has also reached a record low, while reduced immigration is expected to further dampen housing demand.
backsC26
S20secondaryvendor data2026-10-06
Research pack for LEN (FMP market tier, FINRA short interest, insider filings), frozen at content/LEN/research-pack.json
price, the 52-week range, the price move split, multiples against history and the filed cohort, estimates, ratings, target drift, short interest, Form 4 rows and daily closes