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In the last reported quarter, the company’s earnings and revenues topped the Zacks Consensus Estimate by 11.4% and 6.1%, respectively. It is to be noted that this Miami-based homebuilder surpassed earnings expectations in the trailing 19 quarters.
On a year-over-year basis, fiscal fourth-quarter earnings and revenues increased 7.8% and 3%, respectively.
The Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has remained unchanged at $2.21 in the past 30 days. The estimated figure indicates an increase of 4.3% from $2.12 reported in the year-ago quarter.
The consensus mark for revenues is pegged at $7.44 billion, suggesting 14.7% growth from the year-ago reported figure of $6.49 billion.
Let’s see how things have shaped up for this company.
Factors to Note
Lennar’s fiscal first-quarter home sales are expected to have increased from the year-ago level, given higher deliveries. The company has been riding on its solid operating strategy of focusing on production and sales pace over price, land light strategy and favorable pricing and product mix.
Our model predicts home sales to increase 16.5% year over year to $7.1 billion in the quarter. Homebuilding revenues are expected to be $7.13 billion, up 15.8% year over year.
On the fiscal fourth-quarter earnings call, LEN highlighted that it expects home deliveries of 16,500-17,000 units with ASP to be about $420,000 (suggesting a decline from $448,000 a year ago). Meanwhile, our estimate for deliveries for the to-be-reported quarter is currently pegged at 16,912 homes, indicating a rise of 23.8% from 13,659 units a year ago. We expect the ASP of the delivered units to be at $419,920.
Lennar expects new orders in the range of 17,500-18,000, pointing to growth from 14,194 reported in first-quarter fiscal 2023. Our estimate for new orders is currently pegged at 17,577 homes. Low-existing homes for sale have been driving future demand for new homes in the market. Also, digital marketing platforms and a dynamic pricing model bode well.
Our model predicts a backlog (units and values) of 15,557 homes or $7.16 billion compared with the year-ago quarter’s figures of 19,403 units or $9.03 billion.
That said, higher land, labor and raw material costs are expected to have put pressure on fiscal first-quarter margins. The company expects the homebuilding gross margin to be 21-21.25%, pointing to almost flat from 21.2% a year ago. Our model predicts homebuilding gross margin to be 21.1% in the quarter compared with the year-ago quarter’s figures of 21.2%.
Meanwhile, Lennar expects homebuilding selling, general and administrative (SG&A) expenses, as a percentage of home sales, to be within 8-8.2%. In the last year, the metric was recorded at 7.4%. Our model predicts homebuilding SG&A to be 8.2% in the quarter compared with the year-ago quarter’s figures of 7.4%.
What the Zacks Model Unveils
Our proven model does not predict an earnings beat for Lennar this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, Lennar carries a Zacks Rank #2.
Stocks With the Favorable Combination
Here are some companies in the same space that, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported.
MDC is expected to register a 3.7% rise in earnings for the to-be-reported quarter. MDC reported better-than-expected earnings in all the last four quarters, the average surprise being 63%.
Masonite International Corporation (DOOR - Free Report) has an Earnings ESP of +5.98% and presently carries a Zacks Rank #3.
DOOR is expected to register a 2.7% increase in earnings for the to-be-reported quarter. The company reported better-than-expected earnings in two of the last four quarters and missed on the other two occasions, the average surprise being 5.4%.
Dycom Industries, Inc. (DY - Free Report) has an Earnings ESP of +6.77% and presently carries a Zacks Rank #3.
DY’s earnings for the to-be-reported quarter are expected to be down 28.9% from the year-ago level. The company reported better-than-expected earnings in three of the last four quarters but missed on one occasion, the average surprise being 53.9%.
Image: Bigstock
Lennar (LEN) to Report Q1 Earnings: What's in the Cards?
Lennar Corporation (LEN - Free Report) is slated to report first-quarter fiscal 2024 results (ended Feb 29) after the closing bell on Mar 13.
In the last reported quarter, the company’s earnings and revenues topped the Zacks Consensus Estimate by 11.4% and 6.1%, respectively. It is to be noted that this Miami-based homebuilder surpassed earnings expectations in the trailing 19 quarters.
On a year-over-year basis, fiscal fourth-quarter earnings and revenues increased 7.8% and 3%, respectively.
The Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has remained unchanged at $2.21 in the past 30 days. The estimated figure indicates an increase of 4.3% from $2.12 reported in the year-ago quarter.
The consensus mark for revenues is pegged at $7.44 billion, suggesting 14.7% growth from the year-ago reported figure of $6.49 billion.
Lennar Corporation Price and EPS Surprise
Lennar Corporation price-eps-surprise | Lennar Corporation Quote
Let’s see how things have shaped up for this company.
Factors to Note
Lennar’s fiscal first-quarter home sales are expected to have increased from the year-ago level, given higher deliveries. The company has been riding on its solid operating strategy of focusing on production and sales pace over price, land light strategy and favorable pricing and product mix.
Our model predicts home sales to increase 16.5% year over year to $7.1 billion in the quarter. Homebuilding revenues are expected to be $7.13 billion, up 15.8% year over year.
On the fiscal fourth-quarter earnings call, LEN highlighted that it expects home deliveries of 16,500-17,000 units with ASP to be about $420,000 (suggesting a decline from $448,000 a year ago). Meanwhile, our estimate for deliveries for the to-be-reported quarter is currently pegged at 16,912 homes, indicating a rise of 23.8% from 13,659 units a year ago. We expect the ASP of the delivered units to be at $419,920.
Lennar expects new orders in the range of 17,500-18,000, pointing to growth from 14,194 reported in first-quarter fiscal 2023. Our estimate for new orders is currently pegged at 17,577 homes. Low-existing homes for sale have been driving future demand for new homes in the market. Also, digital marketing platforms and a dynamic pricing model bode well.
Our model predicts a backlog (units and values) of 15,557 homes or $7.16 billion compared with the year-ago quarter’s figures of 19,403 units or $9.03 billion.
That said, higher land, labor and raw material costs are expected to have put pressure on fiscal first-quarter margins. The company expects the homebuilding gross margin to be 21-21.25%, pointing to almost flat from 21.2% a year ago. Our model predicts homebuilding gross margin to be 21.1% in the quarter compared with the year-ago quarter’s figures of 21.2%.
Meanwhile, Lennar expects homebuilding selling, general and administrative (SG&A) expenses, as a percentage of home sales, to be within 8-8.2%. In the last year, the metric was recorded at 7.4%. Our model predicts homebuilding SG&A to be 8.2% in the quarter compared with the year-ago quarter’s figures of 7.4%.
What the Zacks Model Unveils
Our proven model does not predict an earnings beat for Lennar this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, Lennar carries a Zacks Rank #2.
Stocks With the Favorable Combination
Here are some companies in the same space that, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported.
M.D.C. Holdings, Inc. has an Earnings ESP of +19.29% and currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
MDC is expected to register a 3.7% rise in earnings for the to-be-reported quarter. MDC reported better-than-expected earnings in all the last four quarters, the average surprise being 63%.
Masonite International Corporation (DOOR - Free Report) has an Earnings ESP of +5.98% and presently carries a Zacks Rank #3.
DOOR is expected to register a 2.7% increase in earnings for the to-be-reported quarter. The company reported better-than-expected earnings in two of the last four quarters and missed on the other two occasions, the average surprise being 5.4%.
Dycom Industries, Inc. (DY - Free Report) has an Earnings ESP of +6.77% and presently carries a Zacks Rank #3.
DY’s earnings for the to-be-reported quarter are expected to be down 28.9% from the year-ago level. The company reported better-than-expected earnings in three of the last four quarters but missed on one occasion, the average surprise being 53.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.