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Here's What Investors Must Expect Ahead of Lennar's Q4 Earnings

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Key Takeaways

  • Lennar is set to report Q4 results with EPS and revenues expected to decline sharply year over year.
  • LEN guided for lower gross margins as incentives and reduced home prices aim to support volumes.
  • New orders are projected to surge nearly 20% year over year, driving higher backlog and future revenues.

Lennar Corporation (LEN - Free Report) is slated to report fourth-quarter fiscal 2025 results (ended Nov. 30) on Dec. 16, after the closing bell.

In the last reported quarter, the company’s adjusted earnings and total revenues missed the Zacks Consensus Estimate by 5.7% and 2.5%, respectively. On a year-over-year basis, the metrics moved down 48.7% and 6.4%, respectively.

Lennar’s earnings surpassed estimates in one of the trailing four quarters and missed on the remaining three occasions, with an average of 3%.

How are Estimates Placed for LEN?

The Zacks Consensus Estimate for adjusted earnings per share (EPS) has remained unchanged at $2.23 over the past 60 days. The estimated figure indicates a decline of 44.7% from earnings of $4.03 per share reported in the year-ago quarter.

The consensus mark for total revenues is pegged at $9.13 billion, indicating an 8.3% decline from the year-ago figure of $9.95 billion.

Lennar Corporation Price and EPS Surprise

Lennar Corporation Price and EPS Surprise

Lennar Corporation price-eps-surprise | Lennar Corporation Quote

Factors Likely to Shape Lennar’s Q4 Results

Revenues

Lennar’s fiscal fourth quarter’s top-line performance is expected to have declined year over year because of lower home sales revenues. The United States’ housing market is navigating through weak homebuyers’ confidence due to still-high mortgage rates, tariff-related uncertainties and lingering inflationary pressures. This ongoing market uncertainty is likely to have weighed down home sales volumes, with a lower average selling price (ASP) of home sales further pushing the revenues down. Per Freddie Mac, the 30-year fixed mortgage rate ranged between 6.5% and 6.23% between September and November 2025. Although the mortgage rates have moved down within the said time frame, homebuyers are still struggling to adjust to the new benchmark amid other macro risks circling the housing market. 

For the fiscal fourth quarter, Lennar expects home deliveries between 22,000 and 23,000 units, with ASP on homes delivered between $380,000 and $390,000. These values compare with 22,206 homes sold in the year-ago quarter at an ASP of $430,000.

Our model expects home deliveries for the quarter to be 22,093 units at an ASP of $388,940, indicating a year-over-year decline of 0.5% and 9.5%, respectively. Besides, our model predicts Homebuilding revenues (contributed 95.3% in the third quarter of fiscal 2025 revenues) to decline 9.5% year over year to $8.65 billion.

Nonetheless, LEN’s technology-driven transformation efforts to unlock scalable efficiencies, reduce customer acquisition costs and modernize its entire operating model are expected to ease the pressures to some extent in the fiscal fourth quarter. Also, its efforts to incentivize sales to enable affordability are expected to have driven new home order volumes and fostered consumer confidence.

Earnings & Margins

The company’s bottom line is expected to have weakened during the fiscal fourth quarter compared with a year ago because of its increased incentive offerings and lower home delivery ASP implemented to boost sales volume. In a still-high mortgage rate scenario, Lennar chose the path of sacrificing its margins to boost home delivery numbers, which is likely to have been adverse in the near term.

For the fiscal fourth quarter, Lennar expects home sales gross margin to be approximately 17.5%, down from 22.1% reported a year ago. It also expects EPS in the range of $2.10-$2.30 for the quarter to be reported.

Moreover, Lennar’s technology investments are likely to have put pressure on the margins as the near-term efficiency yielded from them is immaterial and represents a significant drag on operating leverage. Heightened investments, alongside higher marketing and selling expenses, are expected to have increased the selling, general and administrative (SG&A) expenses of the company in the quarter to be reported. Lennar expects SG&A expenses (as a percentage of home sales) to be in the range of 7.8-8%, up year over year from 7.1%.

Our model expects SG&A expenses (as a percentage of home sales) to be 8%, up 90 basis points year over year.

Orders & Backlog

Boosted by its sales incentives and other in-house efforts, Lennar laid out an expectation of new orders for the fiscal fourth quarter between 20,000 and 21,000, up from 16,895 reported a year ago. Our model predicts the same metric to be 20,254 units, reflecting 19.9% year-over-year growth.

We expect backlog units to be up 29.9% year over year to 15,114, with potential housing revenues up 8.2% to $5.81 billion.

What Our Model Unveils for LEN Stock

Our proven model does not conclusively 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.

LEN's Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

LEN's Zacks Rank: It currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With the Favorable Combination

Here are some companies in the Zacks Construction sector, which per our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.

Installed Building Products, Inc. (IBP - Free Report) currently has an Earnings ESP of +6.20% and a Zacks Rank of 1.

Installed Building Products’ earnings beat estimates in two of the last four quarters and missed on the remaining two occasions, the average surprise being 8.4%. Installed Building Products’ earnings for the fourth quarter of 2025 are expected to inch down 2.4%.

Orion Energy Systems, Inc. (OESX - Free Report) currently has an Earnings ESP of +48.57% and a Zacks Rank of 2.

Orion Energy Systems’ earnings have topped in three of the trailing four quarters and met on the remaining one occasion, the average surprise being 28.3%. Orion Energy Systems’ earnings for the third quarter of fiscal 2026 are expected to grow 64%.

KBR, Inc. (KBR - Free Report) has an Earnings ESP of +0.17% and a Zacks Rank of 3.

KBR’s earnings topped estimates in each of the last four quarters, with an average surprise of 8%. KBR’s earnings for the fourth quarter of 2025 are expected to rise 5.5%.

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