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Oppenheimer maintained its Perform rating on Lennar (NYSE:LEN) stock Wednesday following the homebuilder’s fiscal second-quarter 2025 earnings report. The stock fell 4.46% Tuesday while the S&P 500 declined 0.84%.
The research firm attributed Lennar’s share price underperformance to higher-than-expected selling, general and administrative expenses related to increased technology investments. Despite these concerns, InvestingPro analysis shows Lennar maintains robust financials with a healthy balance sheet, trading at an attractive P/E ratio of 9x while generating solid returns on equity of 15%. Oppenheimer also noted the company’s continued focus on sales volume rather than margins as a factor weighing on investor sentiment.
Lennar’s downbeat market commentary, while not surprising to analysts, further contributed to the negative reaction despite some stability in gross margin, which the company guided to remain flat quarter-over-quarter. InvestingPro subscribers have access to 12 additional key insights about Lennar, including detailed margin analysis and comprehensive financial health metrics that help provide a fuller picture of the company’s performance.
Oppenheimer indicated these issues appear more company-specific than industry-wide problems. The firm specifically highlighted how Lennar’s technology investments likely delay when profit margins might reach bottom and create additional uncertainty about how much margin reduction the homebuilder is willing to accept.
These concerns represent "key sticking points" that keep Oppenheimer neutral on the stock, according to the research firm’s analysis of Lennar’s recent performance and outlook.
In other recent news, Lennar Corporation announced its second-quarter 2025 earnings, reporting a slight miss on earnings per share (EPS) but surpassing revenue expectations. The company recorded an EPS of $1.90, falling short of the projected $1.94, while revenue reached $8.38 billion, exceeding the anticipated $8.18 billion. Despite the EPS miss, Lennar’s revenue performance indicates strong sales, with the company delivering over 20,000 homes and starting 24,200 homes during the quarter. This aligns with Lennar’s strategic focus on maintaining volume amid challenging market conditions. The company also highlighted its strong liquidity position, boasting $5.4 billion in liquidity, which supports its operations and strategic initiatives. Analysts have taken note of Lennar’s performance, with some pointing out the company’s efforts to enhance technology and operational efficiency. The company is also preparing for future quarters, projecting new orders for 22,000 to 23,000 homes in Q3 2025 and an EPS range of $2.00 to $2.20. Lennar continues to focus on technology integration and operational improvements to navigate ongoing market challenges.
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