Lennar (LEN) Sees a More Significant Dip Than Broader Market: Some Facts to Know

The upcoming earnings release of Lennar will be of great interest to investors. The company is predicted to post an EPS of $1.31, indicating a 34.5% decline compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.33 billion, down 5.42% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $5.46 per share and a revenue of $32.27 billion, demonstrating changes of -32.26% and -5.6%, respectively, from the preceding year.

Investors might also notice recent changes to analyst estimates for Lennar. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 1.22% lower. Lennar currently has a Zacks Rank of #5 (Strong Sell).

Investors should also note Lennar's current valuation metrics, including its Forward P/E ratio of 16.06. This valuation marks a premium compared to its industry average Forward P/E of 14.65.

Meanwhile, LEN's PEG ratio is currently 2.94. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Building Products - Home Builders stocks are, on average, holding a PEG ratio of 2.94 based on yesterday's closing prices.

The Building Products - Home Builders industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 172, which puts it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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