Core Viewpoint - Lennar (LEN) has faced significant selling pressure, resulting in a 6.8% decline over the past four weeks, but analysts anticipate improved earnings in the near future [1] Group 1: Technical Analysis - The Relative Strength Index (RSI) is utilized to determine if LEN is oversold, with a current reading of 29.48 indicating potential exhaustion of selling pressure [2][5] - RSI serves as a momentum oscillator that helps identify price movement reversals, suggesting that LEN may be undervalued due to excessive selling [3] Group 2: Fundamental Indicators - Analysts have raised earnings estimates for LEN by 0.8% over the last 30 days, indicating a consensus for better performance, which typically correlates with price appreciation [7] - LEN holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, further supporting the potential for a turnaround [8]

Core Insights - Market leadership often results in a list of laggards, with several well-known stocks down over 20% in 2025 due to near-term uncertainty and slowing demand [2] - Turnaround investing focuses on identifying companies where expectations have fallen too far, with potential for recovery as market conditions improve [3] Company Summaries Lennar Corporation (LEN) - Shares have declined 20.6% year to date, primarily due to price incentives and mortgage buydowns impacting profitability [5] - The company maintains a strong position with an efficient operating model, disciplined land acquisition, and a technology-driven transformation aimed at enhancing scalability and reducing costs [6][7] - The Zacks Consensus Estimate projects a 7.5% increase in fiscal 2027 sales and a 21.3% growth in earnings year over year, with earnings estimates rising from $10.02 to $11.13 [8] Marvell Technology, Inc. (MRVL) - Shares have fallen 23.8% year to date due to delayed customer spending and uneven demand in data centers [10] - Despite short-term challenges, Marvell's long-term prospects remain strong, particularly in custom silicon and networking essential for AI deployments [11] - The Zacks Consensus Estimate anticipates a 22.4% increase in fiscal 2027 sales and a 25.7% growth in earnings year over year, with earnings estimates increasing from $3.34 to $3.57 [12] Snap Inc. (SNAP) - Shares are down 29.2% year to date, largely due to heavy reliance on advertising revenue amid slowing ad growth [13] - The company is leveraging artificial intelligence to enhance user engagement and create new monetization opportunities beyond traditional advertising [14] - A partnership with Perplexity will integrate AI into Snapchat, with expected revenue contributions of $400 million starting in early 2026 [15] - The Zacks Consensus Estimate projects a 13.4% increase in 2026 sales and a 52.3% growth in earnings year over year, with earnings estimates rising from $0.38 to $0.49 [18]

Core Viewpoint - Investors are evaluating Lennar (LEN) and NVR (NVR) to determine which stock offers better value for investment opportunities in the home builders sector [1] Group 1: Zacks Rank and Earnings Estimates - Lennar has a Zacks Rank of 2 (Buy), while NVR has a Zacks Rank of 3 (Hold), indicating that LEN is likely experiencing a more favorable earnings outlook [3] - The Zacks Rank system emphasizes stocks with positive earnings estimate revisions, suggesting that LEN is positioned for better earnings growth compared to NVR [3] Group 2: Valuation Metrics - LEN has a forward P/E ratio of 12.24, significantly lower than NVR's forward P/E of 17.72, indicating that LEN may be undervalued relative to NVR [5] - The PEG ratio for LEN is 4.70, while NVR's PEG ratio is 10.07, further suggesting that LEN offers better value when considering expected earnings growth [5] - LEN's P/B ratio is 1.29, compared to NVR's P/B of 5.41, reinforcing the notion that LEN is more attractively valued [6] Group 3: Overall Conclusion - Given the stronger estimate revision activity and more favorable valuation metrics, LEN is viewed as the superior investment option for value investors at this time [7]

Let's begin with this market reaction to CPI shelter uh carrying an awful lot of water which is kind of a consensus view Jim going into 26. >> Yes, you got to go with what Lenar is saying too. Giant home builder uh dovetales with this.You go to you go to Gemini uh you put in Lenar uh you put in home prices LAR and you'll see uh way back all the way back to 2019 before there was inflation you know but this is the 40% inflation in housing David. Yeah. >> Done.Okay. See you then you look at CarMax you look at ...

Core Viewpoint - Lennar Corporation is a prominent player in the U.S. home construction and real estate market, facing competition from major companies like D.R. Horton and PulteGroup, with a recent price target set by RBC Capital indicating a potential downside for the stock [1]. Financial Performance - Lennar's stock price is currently at $112.23, having dropped by 4.54%, losing $5.34 in value, with daily fluctuations between $110.02 and $114.98 [3]. - Over the past year, the stock reached a high of $148.11 and a low of $98.42, showcasing significant volatility influenced by market conditions [3]. - The company's market capitalization is approximately $28.62 billion, with a trading volume of 9.41 million shares, reflecting strong investor interest [4]. Strategic Insights - The Q4 earnings call held on December 17, 2025, featured key executives and analysts from top financial institutions, providing valuable insights into Lennar's financial performance and strategic direction [2].

Core Viewpoint - The homebuilding sector is facing significant challenges, particularly highlighted by LAR's disappointing earnings report, which has led to a notable decline in its stock price [1][4][10]. Company-Specific Summary - LAR's stock fell over 4% following an earnings miss, reflecting broader struggles in the housing market despite a slight decrease in interest rates [4][5]. - The company's profits decreased to $1.93 per share, down from $46 a year earlier, while revenue was reported at $9.4 billion, a decline from $9.9 billion in the same quarter last year [5][6]. - LAR has implemented incentives such as mortgage rate buy-downs, resulting in a 4% increase in home deliveries, but this has also lowered the average sales price of homes to $386,000 from $430,000 [6][7]. - The company has reduced its starts and sales pace as part of a strategy to boost sales amid ongoing affordability concerns and weak consumer confidence [6][7]. - LAR's forecast for quarterly home sales is between 18,000 and 19,000 signed contracts, missing analysts' expectations of over 20,000 [8][9]. - The projected sales price is expected to decrease further to between $365,000 and $375,000, with gross margins estimated at 15% to 16% [8][9]. Industry Overview - The housing market is struggling to regain stability, with many potential buyers retreating and sellers withdrawing homes from the market [9]. - The overall sentiment in the homebuilding sector is negative, with concerns about rising input costs for materials like copper and aluminum potentially impacting profit margins [13].

Core Insights - Lennar Corporation's shares fell over 4% intra-day after reporting fourth-quarter earnings that did not meet analyst expectations despite revenue exceeding forecasts [1] Financial Performance - Adjusted earnings per share for the quarter were $2.03, missing the consensus estimate of $2.21 [2] - Revenue reached $9.4 billion, surpassing analyst expectations of $9.01 billion [2] - The company delivered 23,034 homes during the quarter, a 4% year-over-year increase, while new orders rose 18% to 20,018 homes [2] - The average sales price decreased by 10% year-over-year to $386,000, indicating increased use of incentives to boost demand in a constrained market [2] Margins and Costs - Gross margin on home sales decreased significantly to 17.0% from 22.1% in the prior-year quarter, influenced by lower revenue per square foot, higher land costs, and continued use of incentives averaging about 14% [3] Future Outlook - For the first quarter of fiscal 2026, the company expects to deliver between 17,000 and 18,000 homes, with an average sales price projected between $365,000 and $375,000 [4] - Gross margins are anticipated to be between 15% and 16%, lower than fourth-quarter levels due to seasonal factors and current market conditions [4] - For the full fiscal year 2025, Lennar delivered 82,583 homes, a 3% increase from the previous year, generating total revenue of $34.2 billion [4]

Core Insights - Lennar Corporation (LEN) reported mixed results for Q4 FY25, with adjusted earnings missing estimates while total revenues exceeded expectations, but both metrics declined year-over-year [1][4][10] Financial Performance - Adjusted EPS for Q4 was $2.03, missing the Zacks Consensus Estimate of $2.23 by 9%, down from $4.03 in the same quarter last year [4][10] - Total revenues reached $9.37 billion, surpassing the consensus mark of $9.13 billion by 2.7%, but declined 5.8% from $9.95 billion year-over-year [4][10] - Homebuilding revenues totaled $8.89 billion, down 6.9% from the prior-year quarter, with home sales contributing $8.85 billion, a decrease of 6.8% [5][10] Market Conditions - The housing market remains challenging due to affordability issues and buyer uncertainty, compounded by a six-week government shutdown [2] - Interest rates declined modestly in Q4, which is expected to help stabilize the market as Lennar increases volumes [3] Operational Metrics - Home deliveries increased by 3.7% to 23,034 units, exceeding projections of 22,093 units, while the average selling price (ASP) of homes delivered was $386,000, down 10.2% year-over-year [6][10] - New orders rose 18.5% year-over-year to 20,018 homes, with a potential value of net orders increasing to $7.51 billion from $7.18 billion [7] Margins and Costs - Gross margin on home sales was 17%, down 510 basis points year-over-year, primarily due to decreased revenue per square foot and increased land costs [8][10] - SG&A expenses as a percentage of home sales increased to 7.9% due to lower revenues and higher marketing costs [9] Future Guidance - For Q1 FY26, Lennar expects home deliveries between 17,000-18,000, with ASP projected to be $365,000-$375,000, down from $408,000 a year ago [16] - Gross margin on home sales is anticipated to be in the range of 15-16%, with SG&A expenses expected to rise to about 9.5% [17] Fiscal Year Highlights - Total revenues for FY25 were $34.2 billion, down from $35.4 billion in FY24, with adjusted EPS of $8.06, down from $13.86 year-over-year [13] - Homebuilding cash and cash equivalents at the end of Q4 were $3.44 billion, down from $4.66 billion at the end of FY24 [14]

Financial Data and Key Metrics Changes - The company reported a gross margin of 17%, which is a decrease from previous expectations, reflecting ongoing pressure in the housing market [8][16][37] - The average sales price for homes was reported at $386,000, with expectations for the first quarter of 2026 to be between $365,000 and $375,000 [16][36] - The company ended the quarter with $3.4 billion in cash and total liquidity of $6.5 billion, indicating a strong balance sheet [32][33] Business Line Data and Key Metrics Changes - The company started 18,443 homes, delivered 23,034 homes, and sold just over 20,000 homes in the fourth quarter, exceeding delivery expectations [15][36] - Sales incentives remained flat at 14%, but the gross margin was reduced to 17%, slightly lower than expected [16][29] - The company achieved a sales pace of four homes per community per month, meeting its sales plan [25] Market Data and Key Metrics Changes - The housing market remains challenging, with consumer confidence impacted by economic uncertainties and a government shutdown [10][11] - The supply of owned home sites decreased year-over-year to 0.1 years, while controlled home sites increased to 98% from 82% [30] - The company reported a significant reduction in warranty spend by 45% year-over-year, indicating improved operational efficiency [29] Company Strategy and Development Direction - The company is focused on maintaining volume and even-flow production while managing an affordable cost structure [9][10] - A shift towards an asset-light model has been completed, with less than 5% of land on the balance sheet, reducing overall inventory from just under $20 billion to just under $12 billion [17][20] - The company aims to leverage its strong market position and efficient product offerings to accommodate pent-up demand as market conditions improve [9][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future market conditions, anticipating that government actions may enhance affordability and activate demand [10][50] - The company is well-positioned to provide affordable housing solutions when demand is activated by lower interest rates or government-sponsored programs [9][10] - Management acknowledged the ongoing challenges in the housing market but remains committed to driving efficiencies and improving margins over time [9][56] Other Important Information - The company completed the Millrose transaction, resulting in a non-cash repurchase of 8 million shares [20][35] - The management team is transitioning leadership roles internally, indicating a strong internal talent pool to maintain operational continuity [21][24] Q&A Session Summary Question: What is contributing to the continued pressure on margin? - Management noted unexpected headwinds from the government shutdown impacting consumer confidence, which affected pricing stability [43][44] Question: Will government actions improve affordability in 2026? - Management believes that significant attention is being paid to affordability issues, and they expect some form of government action in 2026 [50][51] Question: How does the company envision recapturing margin as the market improves? - The company is focused on maintaining volume and leveraging operational efficiencies to improve margins as incentives decrease [56][57] Question: What is the strategy regarding supply and margin? - Management is committed to maintaining volume while navigating market conditions, with a focus on building efficiencies [82][86] Question: How will the company approach share repurchases in 2026? - Management is optimistic about the balance sheet and expects to continue returning cash to shareholders through repurchases and dividends [89][90]

Financial Data and Key Metrics Changes - The company reported a gross margin of 17%, which is a decrease from previous expectations, reflecting ongoing pressure on margins due to market conditions [8][16] - The average sales price for homes was approximately $386,000, with expectations for the first quarter of 2026 to be between $365,000 and $375,000 [16][36] - The company ended the quarter with $3.4 billion in cash and total liquidity of $6.5 billion, indicating a strong balance sheet [32][33] Business Line Data and Key Metrics Changes - The company started 18,443 homes, delivered 23,034 homes, and sold just over 20,000 homes, exceeding delivery goals but facing challenges in maintaining sales volume [15][16] - Sales incentives remained flat at 14%, contributing to a reduction in gross margin [16][29] - The company achieved a cycle time of 127 days for detached single-family homes, a reduction from 138 days a year ago [18][29] Market Data and Key Metrics Changes - The housing market remains challenging, with consumer confidence impacted by economic uncertainties and a government shutdown [10][11] - The supply of owned home sites decreased year-over-year to 0.1 years, while controlled home sites increased to 98% from 82% [30][33] - The company noted that inflation-driven affordability concerns are central to the national conversation, affecting consumer behavior [10][11] Company Strategy and Development Direction - The company is focused on maintaining volume and even-flow production while managing an affordable cost structure [9][10] - A shift towards an asset-lighter model has been completed, with less than 5% of land on the balance sheet, allowing for improved operational efficiency [17][20] - The company aims to leverage its strong market position to provide affordable housing when demand activates, driven by lower interest rates or government programs [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future market conditions, despite current challenges, and emphasized the importance of government action to enhance affordability [11][14] - The company is well-positioned for future growth, with a focus on cash flow and high returns on capital and equity [23][24] - Management acknowledged that while current numbers are not ideal, the company is strategically positioned to meet the ongoing housing shortage [22][23] Other Important Information - The company completed the Millrose transaction, resulting in a non-cash repurchase of 8 million shares [20][35] - The company plans to maintain a focus on technology solutions to drive future efficiencies and improve customer experience [17][77] Q&A Session Questions and Answers Question: What is contributing to the continued pressure on margin? - Management noted unexpected headwinds from the government shutdown impacting consumer confidence, which affected pricing stability [44][45] Question: Do you anticipate government actions to improve affordability? - Management believes that government action is likely, as affordability is a political issue that needs addressing [50][51] Question: How does the company envision recapturing margin as the market improves? - The company expects to leverage its efficiencies and lower incentive structures to improve margins as market conditions stabilize [58][60]