NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 42.8%. Since the same quarter one year prior, revenues rose by 29.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, LEN.B's share price has jumped by 40.58%, exceeding the performance of the broader market during that same time frame. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- The gross profit margin for LENNAR CORP is rather low; currently it is at 19.00%. Regardless of LEN.B's low profit margin, it has managed to increase from the same period last year.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Household Durables industry and the overall market, LENNAR CORP's return on equity significantly trails that of both the industry average and the S&P 500.
Lennar Corporation, together with its subsidiaries, engages in homebuilding, financial services, and real estate businesses in the United States. The company has a P/E ratio of 44.9, above the S&P 500 P/E ratio of 17.7. Lennar has a market cap of $557.5 million and is part of the
industry. Shares are up 45.2% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet Ratings Staff