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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Lennar Corporation (XNYS:LEN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
LEN
Name:
LENNAR CORPORATION (XNYS:LEN)
Sector:
- 78011.00K
Industry:
Residential Construction
CEO:
Mr. Richard Beckwitt
Total Employees:
10,753
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -89.61% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF LENNAR CORPORATION(LEN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND RESIDENTIAL CONSTRUCTION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
77.87
One Month Price Target:
$78.53
Six Month Price Target :
$81.83
Likely Price in One Year's Time:
Ticker:
$85.8
Likely Trading Range Today Under (Normal Volatility)
$77.51
Price Upper limit ($) :
$78.37
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$72.74
This week:
$66.39
This month :
$54.91
Other Primary facts
Market Cap:
22.10B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
291.39M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
21.29%
-19.61%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$101.69
$90.70
$54.05
$65.04
Medium risk (<10%) entry points
Buy Call
Sell Call
$87.12
Buy Put:
Sell Put:
$84.78
$68.59
$70.96
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
LEN
Sharpe Ratio:
2.54%
Comparison:
LEN, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 1.64% higher than the industry
& ratio is 11.42% higher than the market/S&P 500 average
Average Returns/Yield of
LEN
Daily returns:
0.09%
Weekly returns:
0.46%
Monthly returns:
1.83%
Yearly returns:
23.00%
Comparison of returns:
Average annual returns/yield (last 3 years) is -4.51% below industry average
Classification:
LEN, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.58
Statistical test of Returns:
LEN has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.26%
Weekly Volatility:
7.28%
Monthly Volatility:
14.56%
Yearly Volatility:
50.43%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.09%
Volatility in last five trading days has been -66.37% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.59%
Weekly VaR:
-14.74%
Monthly VaR:
-29.49%
How Much Can the price of
LEN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-25%
Worst case (decline):
>85%
This translates to price declining to:
$58.38
This translates to price declining to:
$11.68
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
LEN is a 108.14% riskier investment compared to the market/S&P 500 & is 78.31% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -4.63% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
LEN
Beta in relation to market/S&P 500--1.51
Expected beta in 1 year's time:
0.863
Expected beta in 3 year's time:
1.221
Unlevered (debt free) Beta:
1.246
Beta in relation to Nasdaq (XNAS):
1.024
Beta in relation to all global stocks::
0.93
Beta Comparison & Analysis
Beta of competitors/peers::
1.62
Beta is -6.51% lower than peers
Average Industry Beta:
1.434
Beta is 5.66% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
20.47%
Sustainable growth rate is -26.89% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.084
Alpha is -15.87% below industry average alpha yield
Alpha is 537% higher than market/& is unsustainably high
Analysis of Cost of Capital of
LEN
Equity cost of capital:
0.135
Equity cost of capital is 4.28% above industry mean WACC
Unlevered (without debt) cost of capital:
11.13%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$102.74
Revenue growth rate per share of (3Y):
1.09
Annual revenue growth rate is 18.58% above the industry average
EPS:
-
Expected Annual growth rate of EPS (3Y):
30.53%
Expected future EPS growth rate is 60.74% higher than the Residential Construction industry
Free cash flow (FCF) per share:
$5.84
Balance sheet equity growth per share: 532.94%
Equity growth rate per share is 1288.75% higher than the industry
Debt per share
$20.09
EBITDA per share
$20.23
Valuation Analysis Today of
LEN
P/E Ratio:
5.32
P/E Ratio of Competitors/Peers:
10
P/E ratio is -46.79% lower than main peers & is -41.72% lower than the industry
-
-
-
-
P/S (Price to Sales ratio):
0.76
Price to sales ratio is -46.72% below the industry mean
P/B (Price to book value ratio):
1.09
Price to free cash flow: 13.33
-
Net income growth rate (3Y):
162.39%
Net income growth rate is 80.99% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 2.49%
Dividend yeild: 1.61%
Previous Dividend: $0.38
Previous adjusted dividend: $0.38
Previous Dividend: $1.25
Expected next dividend best case: $0.46
Expected next dividend worst case: $0.29
Average dividend payment (long-term): $0.22
Average dividend increase/decrease (growth rate) % per period: 36.25%
Expected next dividend payment date: 08/08/2022
Expected next dividend record date: 25/07/2022
Expected next dividend declaration date: 07/11/2022
Previous dividend payment date: 05/10/2022
Previous dividend record date: 26/04/2022
Previous dividend declaration date: 04/12/2022
Dividend History:
2022-04-25--$0.38
2021-10-13--$0.25
2021-04-20--$0.25
2022-01-26--$0.38
2021-07-01--$0.25
2021-01-28--$0.25
Dividend growth rate is 118.29% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
28.31%
Net debt to equity ratio:
20.71%
Debt to assets ratio:
17.94%
Net debt to assets ratio:
13.12%
Debt-to-asset ratio is -55.56% below industry average
Ability to repay debt:
Interest coverage ratio:
-
-
Looking forward:
Debt growth rate:
-14.06%
Annual debt growth is -430% lower than industry average debt growth rate
Debt repayment rate in last quarter: 8.55%
Analysis of Key Statistics
Correlation of price movement with the market:
0.624
Statistical significance of correlation:
LEN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.555
Stock price is 12.58% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.555
Correlation of price movement with Nasdaq (^IXIC):
-0.008
Covariance of price movement with the market:
-0.015
Kurtosis
7.334
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.212
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
LEN
Gross Profit Margin Ratio:
161%
Operating Profit Margin Ratio:
20.25%
Operating profit margin is 49.27% higher than the industry
Net Profit Margin Ratio:
161%
Effective Tax Rate:
23.89%
Effective tax rate is 17.21% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
21.38%
Return on equity (ROE) is -25.10% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
13.55%
Return on assets (ROA) is -8.80% lower than the industry
Financial Leverage:
1.2x
Current Ratio:
18.73
Current ratio is 141.55% above industry average
Cash Conversion Cycle (days):
75
Cash conversion cycle is 316.43% above industry average
The remaining useful life of property plant & equipment is: 2.7 years
Stock based compensation to net income ratio:
1.84%
In-depth Efficiency Analysis
Revenue generated per employee:
2.8M
Each employee generates 69% more revenue than industry average revenue per employee
EBITDA generated per employee:
548.2K
Each employee generates 69% more EBITDA than industry average revenue per employee
Profit generated per employee:
411.2K
Each employee generates 66% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 7.3K
Each employee generates -71% less free cash flow than industry average revenue per employee
Assets/Capital per employee
733.8K
Each employee generates -71% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
LEN
LEN-B
CARVANA CO. (XNYS:CVNA)
BALL CORPORATION (XNYS:BALL)
V.F. CORPORATION (XNYS:VFC)
D.R. HORTON, INC. (XNYS:DHI)
Magna International Inc. (XNYS:MGA)
Carnival Corp (XNYS:CCL)
TATA MOTORS LIMITED (XNYS:TTM)
Best Buy Co., Inc. (XNYS:BBY)
Current Analyst Ratings
Strong buy�29%
Buy�25%
Hold�38%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
5/31/22
Revenue:
29.94B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
17.15B
12.78B
-
416.00M
416.00M
-
6.31B
6.72B
1.80M
-
80.73M
5.89B
6.06B
4.42B
5.83B
1.39B
4.42B
Statement of Cash Flow
Date:
Period:
20.09M
Differed Income Tax :
- 54032.00K
Stock Based Compensation :
81.46M
Change in Working Capital :
- 1077210.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
448.15M
Net Cash Provided by Operating Activities:
- 72231.00K
Investments in PP&E:
- 5780.00K
Net Acquisitions:
- 138909.00K
Purchases of Investments:
- 71269.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
2/28/22
2022
Q1
1.57B
34.76M
1.61B
916.39M
20.99B
1.23B
24.74B
-
3.63B
-
2.92B
-
1.34B
7.89B
-
32.64B
1.32B
-
-
-
-
1.32B
5.85B
4.61B
10.47B
-
11.79B
34.19M
15.08B
1.7M
5.56B
February 28, 2022 at 7:00:00 AM
23.88B
20.68B
32.47B
2.96B
5.85B
4.3B
22.41M
173.56M
- 19992.00K
- 547443.00K
-
- 581300.00K
- 110122.00K
- 19021.00K
- 1257886.00K
-
- 1350109.00K
1.61B
2.96B
- 72231.00K
- 5780.00K
- 78011.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
LEN
2023
2024
2025
2026
2027
$64.35
$70.90
$78.11
$86.07
$94.82