Lennar Corp (LEN, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $166.23, Lennar Corp has witnessed a daily gain of 1.58%, marked against a three-month change of 12.57%. A thorough analysis, underlined by the GF Score, suggests that Lennar Corp is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 8/10
- Profitability rank: 9/10
- Growth rank: 10/10
- GF Value rank: 3/10
- Momentum rank: 9/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in financial strength, profitability, growth, and momentum, and a slightly lower GF Value rank, GuruFocus assigned Lennar Corp the GF Score of 92 out of 100, which signals the highest outperformance potential.
Understanding Lennar Corp's Business
Lennar Corp is one of the largest public homebuilders in the United States, with a market cap of $45.81 billion and sales of $34.23 billion. The company boasts an operating margin of 15.89%, reflecting its efficiency in managing expenses relative to its revenue. Lennar Corp's homebuilding operations target a diverse range of homebuyers, including first-time, move-up, and active adult homebuyers mainly under the Lennar brand name. Its financial-services segment provides mortgage financing and related services to its homebuyers. Based in Miami, Lennar Corp is also engaged in multifamily and single-family for rent construction and has invested in numerous housing-related technology startups.
Financial Strength Breakdown
According to the Financial Strength rating, Lennar Corp's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. With an Altman Z-Score of 5.18, Lennar Corp exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.15, Lennar Corp's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Lennar Corp's impressive standing among its peers in generating profit. Lennar Corp's Operating Margin has increased over the past five years, with the most recent figure standing at 15.89%. Furthermore, Lennar Corp's Gross Margin has also seen a consistent rise over the past five years, indicating the company's growing proficiency in transforming revenue into profit. Lennar Corp's strong Predictability Rank of 4.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Lennar Corp demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 18.5%, which outperforms 76.24% of companies in the Homebuilding & Construction industry. Moreover, Lennar Corp has seen a robust increase in its EBITDA over the past few years, emphasizing the company's continued capability to drive growth.
Conclusion: Lennar Corp's Position for Outperformance
Considering Lennar Corp's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. With a strong foundation and a clear trajectory for expansion, Lennar Corp stands out as a compelling choice for value investors. As the company continues to navigate the dynamic real estate market, its strategic investments and operational efficiency may pave the way for sustained success. Will Lennar Corp's robust financial health and growth prospects translate into long-term gains for investors? Only time will tell, but the indicators are promising.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
