What Happened?
Shares of homebuilder Lennar (NYSE: LEN) fell 5.1% in the afternoon session after the company reported disappointing fourth-quarter 2025 results that missed profit expectations.
The company's earnings of $1.93 per share fell 12.6% short of analyst estimates of $2.21 and marked a sharp decline from $4.10 per share reported in the same quarter a year ago. This profit miss overshadowed a beat on revenue, which came in at $9.37 billion versus expectations of $9.13 billion. Investors also focused on weakening profitability, as the company's operating margin narrowed to 7.8% from 13.7% in the prior-year period. Additionally, Lennar's backlog, an indicator of future revenue, declined 3.2% year-over-year to $5.2 billion, signaling potential challenges ahead.
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What Is The Market Telling Us
Lennar’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 2.8% on the news that JPMorgan adjusted its price target on the homebuilder's stock to $118 from $92.
The move represented a positive signal from the investment bank regarding the company's valuation. Despite the significant increase in the price target, JPMorgan maintained its "Neutral" rating on Lennar's shares. This suggested that while the bank saw more upside potential in the stock's price, it did not change its fundamental view on the company's overall investment profile at that time.
Lennar is down 16.6% since the beginning of the year, and at $112.03 per share, it is trading 26% below its 52-week high of $151.47 from December 2024. Investors who bought $1,000 worth of Lennar’s shares 5 years ago would now be looking at an investment worth $1,401.
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