Thesis Lennar Corporation demonstrates robust revenue and margin metrics, supported by strong cash flow and conservative leverage, but faces challenges with volatile revenue-per-share growth and softened profitability. Company Overview Lennar Corporation is a large U.S. homebuilder and real-estate services company that currently posts quarterly revenue as high as $8.80B while operating with very e
Lennar Corporation demonstrates robust revenue and margin metrics, supported by strong cash flow and conservative leverage, but faces challenges with volatile revenue-per-share growth and softened profitability.
Lennar Corporation is a large U.S. homebuilder and real-estate services company that currently posts quarterly revenue as high as $8.80B while operating with very elevated margins and conservative leverage (debt-to-equity 0.2653).
The company shows clear strengths in margin and cash-generation metrics: trailing gross margin is 89.4% and trailing operating margin is 78.0% (period end 2023‑11‑30), indicating strong pricing and operational efficiency (Profit Margin Trends). Operating cash flow has recovered materially over the past decade to $2.40B TTM as of 2024‑11‑30, and recent top-line momentum includes a rise in quarterly revenue from $7.32B to $8.80B in the latest reported quarter (Revenue & Net Income; Strategic Capital Allocation). The balance sheet shows restrained leverage with debt-to-equity at 0.2653, which provides room to fund operations and capital deployment.
There are notable areas of concern. Revenue-per-share growth is highly volatile and printed a sharp contraction of -86.9% year-over-year for the period ending 2023‑11‑30, and the most recent revenue-per-share level reported is $8,643,882,352.94, reflecting large swings in per-share metrics (EPS Diluted & Revenue per Share). Profitability on a net basis and quarterly earnings have softened: quarterly net income fell from $1.16B (period end 2024‑08‑31) to \$304.8M (period end 2026‑05‑31), even as revenues rose in the latest quarter (Revenue & Net Income). Cash-flow allocation also shows heavier outflows on financing and investing activities, with TTM investing cash flow at -\$302.6M and financing cash flow at -\$3.68B, which raises questions about cash deployment and earnings quality (Strategic Capital Allocation; Earnings Quality Analysis).
Monitoring P/E Ratio: The most recent reported P/E in the dataset is 0.0x, which warrants attention for earnings-per-share comparability and valuation context (Price-to-Earnings (PE) Ratio Trend).
The foundation of business quality and long-term value creation
For LENNAR CORP /NEW/, revenue in the most recent reported quarters rose sequentially from $7.32B (period ending 2026-02-28) to $8.80B (period ending 2026-05-31), showing a short-term uptick. The longer revenue history in the dataset is mixed, with multiple large positive and negative reported values and notable volatility across prior quarters and years.
Net income for LENNAR CORP /NEW/ has trended lower over the most recent comparable quarters: it was $1.16B in the period ending 2024-08-31, fell to \$519.5M in the period ending 2025-02-28, and declined further to \$304.8M in the period ending 2026-05-31. While revenue increased in the latest quarter, net income is down relative to the mid-2024 peak. The most recent quarterly revenue was $8.80B. The most recent quarterly net income was $304.8M.
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Period Information
Report Type: Annual (10-K)
Period: Dec 2022 to Nov 2023
Analyzing long-term margin stability and competitive positioning
LENNAR CORP /NEW/ shows elevated trailing gross and operating margins in the most recent quarter, with gross margin at 89.4% and operating margin at 78.0% (period ended 2023-11-30). These recent levels are lower than several prior peaks above 100% recorded in 2016–2019, but materially higher than the mid-2010s troughs (for example gross margin 9.7% and operating margin 7.0% in 2014-11-30). The recent data indicate margins have remained high relative to earlier volatile years.
The series contains several clear inflection points: a large negative gross and operating margin in early 2014 (-127.3% and -79.9% for period end 2014-02-28), a recovery through 2015, a jump to >100% margins in 2016–2019, and a decline to the current 2023 levels. Net profit margin values are sparser; the latest available net margin is -10.1% for period end 2019-11-30 (an earlier net margin was 5.1% at 2015-11-30). The most recent Gross Margin was 89.4% (2023-11-30), the most recent Operating Margin was 78.0% (2023-11-30), and the latest reported Net Profit Margin was -10.1% (2019-11-30).
Understanding Profit Margins
Between Dec 2022 and Nov 2023, Lennar Corp New converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
Lennar Corp /New/'s trailing twelve‑month operating cash flow shows a clear improvement over the available history: operating cash flow was negative in the early 2010s (for example, -$807.7M in 2013 and -$788.5M in 2014), turned positive by the mid‑2010s (e.g., $507.8M in 2016), and is reported at $2.40B TTM as of 2024‑11‑30. The most recent data point indicates materially stronger cash generation relative to earlier periods.
Reported net income (TTM) in the dataset rises over the historical series from $95.3M in 2010 to $1.85B in 2019 (most recent net income datapoint shown, period ending 2019‑11‑30). Within the provided records the latest operating cash flow (TTM) is $2.40B as of 2024‑11‑30 is larger than the latest reported net income available here ($1.85B of 2019‑11‑30). The most recent operating cash flow (TTM) was $2.40B and the most recent net income (TTM) shown was $1.85B.
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
LENNAR CORP /NEW/’s return on equity shows a moderate level in the most recent observation, with the latest reported ROE at 11.5% (period end 2019-11-30). Recent data points indicate a downward drift from earlier higher readings; the most recent quarter is below the 15–20% range often cited as a strong ROE benchmark in the provided context.
Over the available history there are clear inflection points: ROE rose sharply from 3.0% (period end 2010-11-30) to a peak of 19.9% (2012-11-30), then declined to 13.5% by 2015-11-30 and to 11.5% by 2019-11-30. The most recent return on equity was 11.5%.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
LENNAR CORP /NEW/ shows a material increase in operating cash generation on a trailing twelve-month basis, with Operating Cash Flow rising to $2.40B in the most recent 2024-11-30 period from substantially lower levels earlier in the decade (for example, $507.8M at 2016-11-30).
Investing cash flow has moved more negative over recent periods, accelerating from −$177.0M at 2023-11-30 to −$302.6M at 2024-11-30, indicating larger net cash outflows for investing activities year-over-year.
Financing cash flow has also shown progressively larger net outflows in recent years, moving from −$3.25B at 2023-11-30 to −$3.68B at 2024-11-30, and is more negative than several earlier reference points (for example, −$2.20B at 2018-11-30).
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
The chart shows the trailing twelve-month price-to-earnings (P/E) ratio for LENNAR CORP /NEW/ across five reported year-end periods from 2010 through 2019. The series is flat: every reported period (2010-11-30, 2012-11-30, 2015-11-30, 2017-11-30, 2019-11-30) records a P/E of 0.0x, so there is no upward or downward trend observable in the data provided.
There are no notable inflection points or variation across the history shown; the metric is constant at zero in each period. The most recent reported P/E ratio for LENNAR CORP /NEW/ is 0.0x.
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.