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"We rate LENNAR CORP (LEN) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 28.9%. Since the same quarter one year prior, revenues rose by 41.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has significantly increased by 218.90% to $210.03 million when compared to the same quarter last year. In addition, LENNAR CORP has also vastly surpassed the industry average cash flow growth rate of 59.09%.
- LENNAR CORP has improved earnings per share by 30.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, LENNAR CORP reported lower earnings of $2.14 versus $3.10 in the prior year. This year, the market expects an improvement in earnings ($2.42 versus $2.14).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Household Durables industry average, but is greater than that of the S&P 500. The net income increased by 31.9% when compared to the same quarter one year prior, rising from $124.34 million to $164.08 million.
- The gross profit margin for LENNAR CORP is currently lower than what is desirable, coming in at 25.82%. Regardless of LEN's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, LEN's net profit margin of 8.56% compares favorably to the industry average.
- You can view the full analysis from the report here: LEN Ratings Report