Company Overview - Lennar's share price fell by almost 22% in December 2025 due to weak homebuilding conditions and disappointing quarterly results [1] - The company's fiscal fourth quarter revenue decreased by 6% year-over-year to just under $9.4 billion, while net income not in accordance with GAAP dropped by 53% to $514 million ($2.03 per share) [2][4] - Despite beating the consensus analyst top-line estimate of slightly over $9 billion, Lennar missed the non-GAAP net income estimate of $2.21 per share [3] Industry Context - Housing starts, a key indicator of homebuilding activity, fell significantly in the last three months of 2025, with a month-over-month decline of 9.1% in August, a slight uptick of 1.2% in September, and a further decline of 4.6% in October [5] - The National Association of Home Builders (NAHB) forecasts a 7% decline in housing starts for 2025 compared to 2024, despite expectations for a booming year due to a strong economy and a favorable presidential administration [6] - Many homebuilders were hoping for more aggressive Federal Reserve interest rate cuts, which would lower mortgage costs and potentially increase housing demand [7] Company Strengths - Lennar is recognized as one of the elite homebuilders in the U.S., consistently ranking near the top in total closings and revenue [9] - The company employs a successful "everything's included" pricing model, enhancing the appeal of its homes to buyers [9] - Its recently adopted "land light" operating model allows for a sharper focus on its core competency of homebuilding [9] Market Sentiment - The market's reaction to Lennar's performance was viewed as unfair, with the stock recovering somewhat but still appearing undervalued [10]