Lennar B 2025 Q4 Earnings Sharp EPS Drop Amid Revenue Decline

Lennar B (LEN.B) reported fourth-quarter earnings that missed analyst expectations by $0.28, with revenue slightly outperforming estimates. The CEO outlined cautious optimism for 2026, projecting 8-10% revenue growth and 12-15% EPS expansion, though near-term challenges like material costs and labor shortages persist.

Revenue

Homebuilding led the revenue, contributing $8.89 billion, while Financial Services added $308.83 million. Multifamily and Lennar Other segments accounted for $158.66 million and $14.85 million, respectively, bringing total revenue to $9.37 billion—a 5.8% decline from the prior year.

Earnings/Net Income

Earnings per share (EPS) fell 52.5% to $1.93, and net income dropped 54.7% to $497.96 million. The sharp decline underscores margin pressures and operational challenges.

Post-Earnings Price Action Review

The strategy of buying Lennar B shares 30 days post-earnings has underperformed over three years, with a CAGR of 6.65%—37.86% below the benchmark. Despite a 0% maximum drawdown and a Sharpe ratio of 0.19, the approach reflects low-risk, low-return characteristics.

[CEO Commentary]

The CEO emphasized disciplined cost management and digital platform investments to counter rising material costs and labor shortages. While acknowledging near-term macroeconomic headwinds, he expressed confidence in long-term growth through geographic expansion and product innovation.

[Guidance]

The company aims for 8-10% revenue growth and 12-15% EPS growth in 2026, supported by higher absorption rates and cost optimization. Capital expenditures will remain within $500 million, prioritizing technology and land development.

[Additional News]

Lennar B announced a quarterly dividend of $0.50 (annualized $2.00), yielding 1.8% with a payout ratio of 16.54%. The company’s Financial Health score from InvestingPro is rated "fair performance." Recent EPS revisions showed mixed momentum, with both positive and negative adjustments in the 90 days preceding the report.