Why Lennar (LEN) Stock Is Trading Lower Today

What Happened?

Shares of homebuilder Lennar (NYSE:LEN) fell 2% in the morning session after the company’s third-quarter results showed a significant revenue miss and a sharp year-on-year decline in profit, overshadowing an earnings-per-share beat. 

Despite beating analysts' profit expectations, the market focused on the negatives. Lennar's revenue of $8.81 billion fell short of estimates and dropped 6.4% year on year. More concerning was the 47% plunge in its earnings per share compared to the same quarter last year, falling from $4.30 to $2.29. This profit decline was driven by a significant drop in its operating margin, which compressed from 13.7% to 9.4%. Adding to investor concerns, the company's backlog—a key indicator of future revenue—shrank by 14.8% to $6.6 billion, signaling that Lennar has not secured enough new orders to maintain its growth.

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What Is The Market Telling Us

Lennar’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 10 days ago when the stock dropped 3.7% as concerns about the health of the U.S. economy grew following a significant downward revision of job market data. 

The Labor Department reported that employers added 911,000 fewer jobs from April 2024 through March than initially estimated. These "benchmark revisions" are issued annually to more accurately account for new and defunct businesses. The report detailed that the leisure and hospitality sector added 176,000 fewer jobs, professional and business services 158,000 fewer, and retailers 126,000 fewer. This weaker-than-expected data has fueled investor anxiety, as it suggests businesses may be becoming more reluctant to hire amid economic uncertainty. The numbers issued are preliminary, with final revisions scheduled for February 2026. 

JPMorgan Chase CEO Jamie Dimon added that the U.S. economy is "weakening," though he stopped short of predicting a recession. "Whether it's on the way to recession or just weakening, I don't know," he said. Dimon's remarks are closely watched, given his influence as head of one of the nation's largest banks.

Lennar is down 4.7% since the beginning of the year, and at $128.09 per share, it is trading 33.4% below its 52-week high of $192.45 from September 2024. Investors who bought $1,000 worth of Lennar’s shares 5 years ago would now be looking at an investment worth $1,669.

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