Lennar Story

<div class='circular--portrait' style='background:#FF6600;color: #FFFAFA;font-size:3em;'>LEN</div>
LEN -- USA Stock  

USD 76.59  5.94  7.20%

As many millenniums are trying to avoid consumer cyclical space, it makes sense to outline Lennar a little further and try to understand its current market patterns. We will analyze why Lennar investors may still consider a stake in the business. Is the entity current valuation justified for 2020? Here i will cover my perspective on valuation to give Lennar institutional investors a better outlook on taking a position in the stock.
Published over three months ago
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Is Lennar (NYSE:LEN) ready for a correction?
Lennar has 8.94 B in debt with debt to equity (D/E) ratio of 0.54, which is OK given its current industry classification. Lennar is OVERVALUED at 70.81 per share with modest projections ahead. About 99.0% of the company shares are owned by institutional investors. Lennar has price-to-book ratio of 1.39. Typically companies with comparable Price to Book (P/B) are able to outperform the market in the long run. The entity recorded earning per share (EPS) of 6.64. The firm last dividend was issued on the 9th of July 2020. Lennar had 2:1 split on the 9th of November 2017.
We determine the current worth of Lennar using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Lennar based exclusively on its fundamental and basic technical indicators. By analyzing Lennar's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Lennar's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Lennar. We calculate exposure to Lennar's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Lennar's related companies.

Lennar Investment Alerts

Lennar investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Lennar performance across your portfolios.Please check all investment alerts for Lennar

Lennar Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Lennar value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Lennar competition to find correlations between indicators driving the intrinsic value of Lennar.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for Lennar, but it might be worth checking our own buy vs. sell analysis

Lennar exotic insider transaction detected

Legal trades by Lennar insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Lennar insider trading alert for general transaction of class b common stock by Sidney Lapidus, the corporate stakeholder, on 8th of January 2021. This event was filed by Lennar Corp with SEC on 2021-01-08. Annual statement of changes in beneficial ownership - SEC Form 5 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking down Lennar Indicators

The entity reported the last year's revenue of 22.62 B. Total Income to common stockholders was 2.08 B with profit before taxes, overhead, and interest of 4.52 B.
 2017 2018 2019 2020 (projected)
Revenues USD20.57 B22.26 B25.6 B27.62 B
Revenues20.57 B22.26 B25.6 B27.62 B

Margins Breakdown

Lennar profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Lennar itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Lennar profit margins.
Operating Margin9.12
EBITDA Margin0.11
Gross Margin0.13
Profit Margin0.0845

Lennar Average Assets is increasing over the last 8 years. Also, Lennar Revenue Per Employee is increasing over the last 8 years.

Our perspective of the latest Lennar rise

Lennar latest risk adjusted performance surges over 0.14. Lennar currently demonstrates below-verage downside deviation. It has Information Ratio of 0.08 and Jensen Alpha of 0.35. However, we do advice investors to further question Lennar expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Our Bottom Line On Lennar

Whereas some other firms within the residential construction industry are still a little expensive, even after the recent corrections, Lennar may offer a potential longer-term growth to institutional investors. Taking everything into account, as of the 13th of September 2020, we believe that at this point, Lennar is overvalued with below average probability of distress within the next 2 years. Our ongoing 'Buy-vs-Sell' recommendation on the company is Strong Hold.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Lennar. Please refer to our Terms of Use for any information regarding our disclosure principles.

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