Would You Still Hold Lennar Stock If It Fell Another 30%?
Lennar (LEN) stock is down 9.8% in 5 trading days. The recent slide reflects concerns over Lennar’s operational strategy transition, C-suite changes, and a weak housing market pressuring margins, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Lennar stands today.
- Size: Lennar is a $31 Bil company with $35 Bil in revenue currently trading at $120.03.
- Fundamentals: Last 12 month revenue growth of -4.7% and operating margin of 10.0%.
- Liquidity: Has Debt to Equity ratio of 0.17 and Cash to Assets ratio of 0.05
- Valuation: Lennar stock is currently trading at P/E multiple of 12.0 and P/EBIT multiple of 9.3
- Has returned (median) 122% within a year following sharp dips since 2010. See LEN Dip Buy Analysis.
These metrics point to a Weak operational performance, alongside Very Low valuation – making the stock Fairly Priced. For details, see Buy or Sell LEN Stock
That brings us to the key consideration for investors worried about this fall: how resilient is LEN stock if markets turn south? This is where our downturn resilience framework comes in. Suppose LEN stock falls another 20-30% to $84 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
2022 Inflation Shock
- LEN stock fell 44.8% from a high of $116.91 on 10 December 2021 to $64.49 on 16 June 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 15 June 2023
- Since then, the stock increased to a high of $192.45 on 19 September 2024 , and currently trades at $120.03
| LEN | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -44.8% | -25.4% |
| Time to Full Recovery | 364 days | 464 days |
2020 Covid Pandemic
- LEN stock fell 58.8% from a high of $71.22 on 11 February 2020 to $29.35 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 27 July 2020
| LEN | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -58.8% | -33.9% |
| Time to Full Recovery | 126 days | 148 days |
2018 Correction
- LEN stock fell 47.0% from a high of $71.82 on 19 January 2018 to $38.06 on 24 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 27 July 2020
| LEN | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -47.0% | -19.8% |
| Time to Full Recovery | 581 days | 120 days |
2008 Global Financial Crisis
- LEN stock fell 93.5% from a high of $56.11 on 2 February 2007 to $3.64 on 21 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 4 October 2017
| LEN | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -93.5% | -56.8% |
| Time to Full Recovery | 3239 days | 1480 days |
Feeling jittery about LEN stock? Consider portfolio approach.
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