Lennar, Apollo Receive Downgrades

NEW YORK ( TheStreet) -- Shares of Lennar ( LEN) and Apollo Group ( APOL) were downgraded by TheStreet Ratings on Thursday.

Lennar

The homebuilder was downgraded to hold from buy at TheStreet Ratings.

"The company's strengths can be seen in multiple areas, such as its revenue growth and solid stock price performance," TheStreet Ratings wrote. "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."

Lennar reported first-quarter earnings this week of $15 million, or 8 cents a share, which beat analysts' estimates of 4 cents.

Shares of Lennar hit a 52-week high Wednesday of $28.28. The stock's 52-week low of $12.14 was set on Oct. 4.

Lennar has an estimated price-to-earnings ratio for next year of 19.91 times; the average for home construction companies is 24.47. For comparison, D.R. Horton ( DHI) has a lower forward P/E of 18.99; Toll Brothers' ( TOL) forward P/E is 34.39.

Thirteen of the 25 analysts who cover Lennar rated it hold. Ten analysts gave the stock a buy rating and two rated it sell.

TheStreet Ratings gives Lennar a C+ grade. The stock has risen 40.81% year to date.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Apollo Group

The education company was downgraded to hold from buy at TheStreet Ratings.

"The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity," TheStreet Ratings wrote. "However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."

Apollo Group reported this week second-quarter net income of $63.9 million, or 51 cents a share, a swing from a year-earlier loss of $64 million, or 47 cents.

The stock was also downgraded to neutral from outperform by Credit Suisse analysts this week.

Apollo Group's forward P/E is 11.71; the average for specialized consumer services companies is 15.05. For comparison, DeVry ( DV) has a lower forward P/E of 9.87; ITT Educational Services' ( ESI) forward P/E is 8.25.

Ten of the 19 analysts who cover Apollo Group rated it buy; nine analysts gave the stock a hold rating.

TheStreet Ratings gives Apollo Group a C grade and hold rating. The stock has fallen 28.46% year to date.

-- Written by Alexandra Zendrian

>To contact the writer of this article, click here: Alexandra Zendrian

>To submit a news tip, send an email to: tips@thestreet.com.

>To follow the writer on Twitter, go to Alexandra Zendrian.

More from Education

When Is the FAFSA Deadline and What Are the Application Requirements?

When Is the FAFSA Deadline and What Are the Application Requirements?

What the Fed Rate Hike Means For You

What the Fed Rate Hike Means For You

To Easily Get Out of Credit Card Fees and Charges - Just Ask the Right Question

To Easily Get Out of Credit Card Fees and Charges - Just Ask the Right Question

How to Calculate Your Net Worth and Pin Down Your Financial Health

How to Calculate Your Net Worth and Pin Down Your Financial Health

All 2018 Graduates Must Watch Jim Cramer's Bucknell Commencement Speech

All 2018 Graduates Must Watch Jim Cramer's Bucknell Commencement Speech