Lennar (LEN) Earnings Preview: Navigating the Housing Market Amidst Challenges and Opportunities
1min read In this in-depth stock evaluation report, we take a closer look at Lennar Corporation (LEN), a leading homebuilder in the United States. As LEN is scheduled to report its Q4 earnings today, expectations are high following the stock's impressive year-to-date performance and record highs reached earlier this month.
The housing market has remained resilient despite rising mortgage rates, and LEN's results in the previous quarter, released in December, were strong as the company topped Q4 EPS and revenue estimates. New orders increased by 32% to 17,366 homes, outpacing its guidance of 16,200-17,200.
In the upcoming Q4 earnings report, investors will be keeping a close eye on LEN's guidance for Q1 new orders, deliveries, and average sales price. The company previously guided for 17,500-18,000 new orders, 16,500-17,000 deliveries, and an average sales price of approximately $420K, compared to $441K in Q4. Furthermore, LEN is expected to update its FY24 deliveries guidance, currently at 80,000.
Gross Margin on Home Sales will be a key metric to watch, as the company missed its Q4 gross margin target in the previous quarter. The average home selling price, net of incentives, has also decreased due to higher mortgage rates, which are causing homebuilders to increase incentives to improve affordability.
As a homebuilder catering to first-time, move-up, active adult, and luxury homebuyers, LEN is the second-largest public homebuilder in the U.S. Its financial services segment provides mortgage financing and related services to homebuyers, while its multifamily segment is involved in the development, construction, and management of rental properties.
Currently, LEN is being covered by 19 Wall Street analysts who, on average, rate the stock as a Moderate Buy. The stock has a market cap of $45.76B and an enterprise value of $44.23B. LEN trades at a forward P/E ratio of 11.63, which is lower than the current forward P/E for the S&P 500.
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