Market Cap : 20.86 B | Enterprise Value : 25.11 B | PE Ratio : 5.64 | PB Ratio : 1.03 |
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As of today (2022-05-25), Lennar's intrinsic value calculated from the Discounted Earnings model is $485.37.
Note: Discounted Earnings model is only suitable for predictable companies (Business Predictability Rank higher than 1-Star). If the company's predictability rank is 1-Star or Not Rated, result may not be accurate due to the low predictability of business and the data will not be stored into our database.
Lennar's Predictability Rank is 3.5-Stars.
Margin of Safety (Earnings Based) using Discounted Earnings model for Lennar is 85.17%.
The historical rank and industry rank for Lennar's Intrinsic Value: DCF (Earnings Based) or its related term are showing as below:
During the past 13 years, the highest Price-to-Intrinsic-Value-DCF (Earnings Based) Ratio of Lennar was 9.53. The lowest was 0.17. And the median was 0.54.
LEN's Price-to-Intrinsic-Value-DCF (Earnings Based) is ranked better thanThe historical data trend for Lennar's Intrinsic Value: DCF (Earnings Based) can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
This is the intrinsic value calculated from the Discounted Earnings model with default parameters. The calculation method is the same as Discounted Cash Flow model except earnings are used in the calculation instead of free cash flow. This is the default method of calculation with GuruFocus DCF calculator.
Usually a two-stage model is used in calculating the intrinsic value with discounted cash flow model. The first stage is called growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.
GuruFocus DCF calculator is a two-stage model. The default values are defined as:
1. Discount Rate: d = 9%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. We used the 10-Year Treasury Constant Maturity Rate as the risk free rate and rounded up to the nearest integer, then added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.
2. Growth Rate in the growth stage: g1 = 20%
Growth Rate in the growth stage = average earnings growth rate in the past 10 years. If it is higher than 20%, we use 20%. If it is less than 5%, we use 5% instead. =>
Average Earnings Growth Rate in the past 10 years was 20% which is NO less than 20% => Growth Rate: 20%
3. Years of Growth Stage: y1 = 10
4. Terminal Growth Rate: g2 = 4%
5. Years of Terminal Growth: y2 = 10
6. EPS without NRI: eps without nri = $12.770.
GuruFocus DCF calculator is actually a Discounted Earnings calculator, the Earnings Per Share without NRI is used as the default. The reason we are doing this is we found that historically stock prices are more correlated with earnings than free cash flow.
All of the default settings can be changed and the results are calculated automatically.
Lennar's Intrinsic Value: DCF (Earnings Based) for today is calculated as:
Intrinsic Value: DCF (Earnings Based) | = | Earnings per Share (Diluted) | * | {[(1+g1)/(1+d) | + | (1+g1)^2/(1+d)^2 | + | ... | + | (1+g1)^10/(1+d)^10] |
+ | (1+g1)^10/(1+d)^10 | * | [(1+g2)/(1+d) | + | (1+g2)^2/(1+d)^2 | + | ... | + | (1+g2)^10/(1+d)^10]} |
set x = (1+g1)/(1+d) = (1+0.2)/(1+0.09) = 1.1009174311927
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.09) = 0.95412844036697
Intrinsic Value: DCF (Earnings Based) | = | Earnings per Share (Diluted) | * | {[x | + | x^2 | + | ... | + | x^10] | + | x^10 | * | [y | + | y^2 | + | ... | + | y^10]} |
= | Earnings per Share (Diluted) | * | [x | * | (1-x^10) | / | (1-x) | + | x^10 | * | y | * | (1-y^10) | / | (1-y)] | |||||
= | 12.770 | * | 38.009 | |||||||||||||||||
= | 485.37 |
Margin of Safety % (DCF Earnings Based) | = | (Intrinsic Value: DCF (Earnings Based) | - | Current Price) | / | Intrinsic Value: DCF (Earnings Based) |
= | (485.37 | - | 71.99) | / | 485.37 | |
= | 85.17 % |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Unlike valuation methods such as Net Current Asset Value, Tangible Book Value per Share, Graham Number, Median Ratio etc, discounted Cash Flow model evaluates the companies based on their future earnings power instead of their assets.
What you need to know about Discounted Earnings model:
1. The Discounted Earnings model evaluates a company based on its future earnings powerYou can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.
Thank you for viewing the detailed overview of Lennar's Intrinsic Value: DCF (Earnings Based) provided by GuruFocus.com. Please click on the following links to see related term pages.
Bessette Diane J | officer: VP/CFO/Treasurer | LENNAR CORPORATION 700 NW 107 AVE 4TH FLR MIAMI FL 33172 |
Collins David M | officer: Controller | LENNAR CORPORATION 700 NW 107 AVENUE STE 400 MIAMI FL 33172 |
Jaffe Jonathan M | director, officer: President | LENNAR CORPORATION 700 NW 107 AVE 4TH FLR MIAMI FL 33172 |
Mccall Jeffrey Joseph | officer: Executive Vice President | 26 TECHNOLOGY DRIVE IRVINE CA 92618 |
Stowell Scott D | director | PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: STOWELL SCOTT D a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;} |
Gerard Steven L | director | P.O. BOX 554 MILWAUKEE WI 53201-0554 |
Bolotin Irving | director | LENNAR CORPORATION 700 NW 107 AVE 4TH FLR MIAMI FL 33172 |
Sustana Mark | officer: VP/General Counsel/Secretary | LENNAR CORPORATION 700 NW 107 AVE 4TH FLR MIAMI FL 33172 |
Beckwitt Richard | director, officer: Chief Executive Officer | LENNAR CORPORATION 700 NW 107 AVE 4TH FLR MIAMI FL 33172 |
Olivera Armando J | director | C/O FLUOR CORPORATION 6700 LAS COLINAS BLVD IRVING TX 75039 |
Gilliam Theron I | director | GMS INC. 100 CRESCENT CENTRE PARKWAY, SUITE 800 TUCKER 2Q 30084 |
Mcclure Teri P | director | 55 GLENLAKE PARKWAY NE ATLANTA GA 30328 |
Sonnenfeld Jeffrey | director | 14 WALL ST 13TH FL NEW YORK NY 10005 |
Hudson Sherrill W | director | 201 SOUTH BISCAYNE BOULEVARD 34TH FLOOR, MIAMI CENTER MIAMI FL 33131 |
Lapidus Sidney | director | 466 LEXINGTON AVENUE FLOOR NEW YORK NY 10017 |
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By PRNewswire 09-29-2021
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