Is Lennar Stock Poised for a Rally?

Here is why we think Lennar (LEN) stock deserves consideration as a value stock. It is currently trading nearly 30% below its 1 year high, and also trading at a PS multiple which is below the average for the last 3 years. However, it has strong margins to go with its modest valuation.

Lennar navigates a challenging housing market by advancing its asset-light strategy, highlighted by the February 2025 spin-off of Millrose Properties, with 98% of its lot position now controlled via options. This capital reallocation supports the February 2025 Rausch Coleman Homes acquisition, adding approximately 5,300 homes delivered in 2024 and expanding Lennar’s market footprint. Despite Q3 2025 gross margins at 17.5% due to higher mortgage rates—around 6.17% in October 2025—and increased incentives, the company actively mitigates these pressures through operational efficiencies, reducing direct construction costs by 3.5% year-over-year in Q2 2025 and achieving a 126-day average cycle time.

Let’s talk numbers

• Revenue Growth: -4.7% LTM and 3.0% last 3 year average. Not ideal, but this is a margin and value play.
• Strong Margin: Nearly 13.6% 3-year average operating margin.
• No Major Margin Shock: Lennar has avoided any large large margin collapse in the last 12 months.
• Modest Valuation: Despite encouraging fundamentals, LEN stock trades at a PE multiple of 11.7

As a quick background, Lennar provides homebuilding services including construction and sale of single-family homes, along with residential mortgage financing, title insurance, and closing services in the United States.

No matter how good the strategy, stock picking can fail. High Quality Portfolio turns single-stock insights into a robust market beating portfolio strategy.

*LTM: Last Twelve Months

But do these numbers tell the full story? Read Buy or Sell LEN Stock to see if Lennar still has an edge that holds up under the hood.

Stocks Like These Can Outperform. Here Is Data

Below are statistics for stocks with same selection strategy applied between 12/31/2016 and 6/30/2025.

• Average 6-month and 12-month forward returns of 12.7% and 25.8% respectively
• Win rate (percentage of picks returning positive) of > 70% for both 6-month and 12-month periods
• Strategy consistent across market cycles.

There is no guarantee that the market will always reward such value stocks, so useful to ask – what is the risk?

Risk Quantified

LEN isn’t immune to big hits. It plunged 93% during the Global Financial Crisis and dropped 52% in the Dot-Com crash. Even smaller shocks weren’t kind — Covid saw a 59% fall, 2018’s correction nearly 47%, and the inflation shock dragged it down 44%. Good fundamentals matter, but when the market sells off hard, LEN feels the pain just like most stocks.

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read LEN Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.