Lennar’s stock has gained 1.7% since its last earnings report, but will this trend continue as the next report approaches?
Miami: So, it’s been about a month since Lennar’s last earnings report, and their shares have climbed about 1.7%. That’s actually better than the S&P 500, which is pretty cool.
But the big question is whether this positive trend can keep going as we get closer to the next earnings release. Before we dig into what investors and analysts are saying, let’s recap the last earnings report to see what’s been driving these changes.
In their fourth-quarter results, Lennar didn’t quite hit the mark. Their adjusted earnings and total revenues fell short of what analysts expected and also dropped compared to last year.
The slowdown in home sales, thanks to high mortgage rates and lower average selling prices, really hurt them. New orders also took a hit, which isn’t great news.
To tackle these affordability issues, Lennar tried adjusting their prices and offering incentives to boost sales. But it seems those efforts didn’t quite pay off, especially with all the uncertainty in the housing market.
Looking ahead to fiscal 2025, they plan to focus on a volume-based strategy and a more flexible business model to navigate these challenges.
Now, about those numbers: Lennar’s adjusted earnings per share came in at $4.03, which was below the expected $4.16. Last year, they reported $5.17, so that’s a noticeable drop.
Total revenues were $9.95 billion, also missing the target of $10.16 billion and down from $10.97 billion last year. Their homebuilding segment saw revenues of $9.55 billion, down 9.2% from the previous year.
Home deliveries dropped to 22,206 units, and the average selling price of homes fell to $430,000. New orders also decreased, which isn’t a good sign for future sales.
On the financial side, Lennar had $4.66 billion in cash at the end of the fiscal year, down from $6.27 billion the previous year. They’ve also managed to keep their debt levels in check.
For the first quarter of fiscal 2025, they expect to deliver between 17,000 and 17,500 homes, which is a slight increase from last year. However, they anticipate a drop in gross margins and new orders.
Overall, estimates for Lennar have been trending downward, and they currently hold a Zacks Rank of #5, indicating a strong sell. So, it looks like they might face some challenges in the coming months.
In comparison, Toll Brothers, another player in the homebuilding industry, has seen an 8.5% increase in their stock over the past month, which is a bit more promising.
