Lennar Corporation (LEN): A Bull Case Theory

We came across a bullish thesis on Lennar Corporation on Darius Dark Investing's Substack. As of 14ᵗʰ July, Lennar Corporation's share was trading at $112.89. LEN's trailing and forward P/E were 9.35 and 6.99 respectively according to Yahoo Finance.

The US housing market is experiencing a chill due to high mortgage rates, which have suppressed demand and existing home sales. However, this has created a unique opportunity for homebuilders like Lennar Corporation, which can provide available homes. Lennar's business model is a masterclass in vertical integration, controlling almost every aspect of the home-buying journey. The company's Financial Services segment has become a critical strategic weapon, offering mortgage financing, title insurance, and closing services directly to customers, allowing it to manufacture affordability for its products.

Lennar has undergone a profound transformation, spinning off its land holdings into a new entity called Millrose Properties in February 2025. This move has slashed its owned homesite supply and reduced the risk of land value fluctuations. The company now controls 98% of its future land needs through options and agreements, freeing up billions in capital to be redeployed into activities that enhance shareholder value. Lennar's recent earnings report showed a decline in net earnings, but the company increased home deliveries by 2% to over 20,000 homes, demonstrating the success of its strategy to maintain production volume.

The investment case for Lennar is not a bet on a swift recovery in the US housing market, but rather on a well-managed, financially robust, and strategically adroit company that has rebuilt its foundation to withstand the cycle and profit from it. The stock is being penalized for temporary pain but not rewarded for the permanent, structural improvement in its business model. With a low price-to-earnings ratio of around 8 and a 22% discount to its 10-year historical average, Lennar presents a compelling opportunity for patient investors to acquire a superior, more resilient business at a price that reflects past risks, not future realities.

Previously we covered a bullish thesis on NVR, Inc. by Charts&Companies in June 2025, which highlighted the company’s strong balance sheet, high ROE, undervalued PEG ratio, and consistent per-share growth. The company’s stock price has appreciated approximately by 5.13% since our coverage. The thesis still stands as NVR remains a financially disciplined compounder. Darius Dark Investing shares a similar view on Lennar but emphasizes its land-light transformation.

Lennar Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 62 hedge fund portfolios held LEN at the end of first quarter which was 70 in the previous quarter. While we acknowledge the risk and potential of LEN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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