Is this builder’s model capital intensive?
Lennar Corp is a homebuilder that develops and sells residential properties in the US. The company’s activity centers on planning communities, building homes, and delivering finished units to buyers. Its operations also include related housing activities that support the core homebuilding cycle. The business is scaled for high-dollar projects where capital tied up in land and construction matters.
Are margins and returns holding steady?
FundamentalsIn its latest annual filing, reported in USD, Lennar recorded USD 34.2 billion of revenue, with sales down 3.5% year over year. Profitability ratios over the last twelve months were modest, including a 9.35% gross margin, 7.29% operating margin, and a 5.39% net profit margin.
On the balance sheet side, the company ended the period with USD 3.8 billion in cash and USD 134.3 million of depreciation and amortization. Returns were moderate as well, with ROE at 8.04% over the trailing twelve months.
Is the market discounting fair value?
DCF / MultiplesAt USD 94.95 per share, the stock trades below the discounted cash flow fair-value range implied by the model’s weaker-
Returns Depend on Balance Sheet Strength
TakeawayThe valuation case leans on durable returns from a capital-heavy model. Cash helps, but funding needs can rise quickly in this business. Returns must stay steady even when revenue is slipping. If margins compress, resilience depends more on the balance sheet.