Intrinsic value of Lennar Cl A - LEN

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$52.12

  Intrinsic Value

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  Value-price divergence*

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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of LEN stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 11.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  15.58
  14.60
  13.64
  12.78
  12.00
  11.30
  10.67
  10.10
  9.59
  9.13
  8.72
  8.35
  8.01
  7.71
  7.44
  7.20
  6.98
  6.78
  6.60
  6.44
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
  5.56
  5.50
  5.45
Revenue, $m
  10,950
  12,549
  14,260
  16,082
  18,012
  20,047
  22,186
  24,427
  26,770
  29,215
  31,762
  34,413
  37,170
  40,037
  43,016
  46,111
  49,328
  52,672
  56,149
  59,765
  63,529
  67,447
  71,527
  75,780
  80,214
  84,839
  89,665
  94,705
  99,969
  105,469
  111,220
Variable operating expenses, $m
 
  10,942
  12,434
  14,022
  15,704
  17,478
  19,342
  21,295
  23,337
  25,468
  27,689
  29,996
  32,399
  34,897
  37,494
  40,192
  42,996
  45,911
  48,941
  52,094
  55,374
  58,789
  62,346
  66,052
  69,917
  73,948
  78,155
  82,548
  87,136
  91,931
  96,943
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  9,620
  10,942
  12,434
  14,022
  15,704
  17,478
  19,342
  21,295
  23,337
  25,468
  27,689
  29,996
  32,399
  34,897
  37,494
  40,192
  42,996
  45,911
  48,941
  52,094
  55,374
  58,789
  62,346
  66,052
  69,917
  73,948
  78,155
  82,548
  87,136
  91,931
  96,943
Operating income, $m
  1,330
  1,607
  1,827
  2,060
  2,308
  2,569
  2,844
  3,132
  3,432
  3,746
  4,073
  4,417
  4,771
  5,139
  5,522
  5,919
  6,332
  6,761
  7,208
  7,672
  8,155
  8,658
  9,182
  9,728
  10,297
  10,890
  11,510
  12,157
  12,832
  13,539
  14,277
EBITDA, $m
  1,380
  1,660
  1,886
  2,127
  2,383
  2,652
  2,935
  3,231
  3,541
  3,865
  4,202
  4,552
  4,917
  5,296
  5,690
  6,100
  6,525
  6,968
  7,428
  7,906
  8,404
  8,922
  9,462
  10,025
  10,611
  11,223
  11,862
  12,528
  13,225
  13,952
  14,713
Interest expense (income), $m
  67
  220
  262
  308
  357
  408
  462
  519
  579
  641
  707
  774
  845
  919
  995
  1,074
  1,157
  1,243
  1,332
  1,424
  1,521
  1,621
  1,726
  1,834
  1,948
  2,066
  2,189
  2,318
  2,452
  2,592
  2,739
Earnings before tax, $m
  1,330
  1,387
  1,564
  1,752
  1,952
  2,161
  2,382
  2,612
  2,853
  3,105
  3,367
  3,643
  3,926
  4,221
  4,527
  4,845
  5,175
  5,519
  5,876
  6,247
  6,634
  7,037
  7,456
  7,893
  8,349
  8,824
  9,321
  9,839
  10,380
  10,946
  11,538
Tax expense, $m
  417
  375
  422
  473
  527
  584
  643
  705
  770
  838
  909
  984
  1,060
  1,140
  1,222
  1,308
  1,397
  1,490
  1,586
  1,687
  1,791
  1,900
  2,013
  2,131
  2,254
  2,383
  2,517
  2,657
  2,803
  2,955
  3,115
Net income, $m
  912
  1,013
  1,142
  1,279
  1,425
  1,578
  1,739
  1,907
  2,083
  2,266
  2,458
  2,659
  2,866
  3,081
  3,304
  3,537
  3,778
  4,029
  4,289
  4,561
  4,843
  5,137
  5,443
  5,762
  6,095
  6,442
  6,804
  7,182
  7,578
  7,991
  8,423

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,330
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  15,362
  16,088
  18,282
  20,618
  23,092
  25,701
  28,443
  31,316
  34,320
  37,455
  40,720
  44,119
  47,654
  51,329
  55,148
  59,117
  63,241
  67,528
  71,986
  76,622
  81,447
  86,470
  91,702
  97,154
  102,838
  108,767
  114,955
  121,416
  128,165
  135,217
  142,589
Adjusted assets (=assets-cash), $m
  14,032
  16,088
  18,282
  20,618
  23,092
  25,701
  28,443
  31,316
  34,320
  37,455
  40,720
  44,119
  47,654
  51,329
  55,148
  59,117
  63,241
  67,528
  71,986
  76,622
  81,447
  86,470
  91,702
  97,154
  102,838
  108,767
  114,955
  121,416
  128,165
  135,217
  142,589
Revenue / Adjusted assets
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
Average production assets, $m
  215
  251
  285
  322
  360
  401
  444
  489
  535
  584
  635
  688
  743
  801
  860
  922
  987
  1,053
  1,123
  1,195
  1,271
  1,349
  1,431
  1,516
  1,604
  1,697
  1,793
  1,894
  1,999
  2,109
  2,224
Working capital, $m
  0
  -1,518
  -1,726
  -1,946
  -2,179
  -2,426
  -2,684
  -2,956
  -3,239
  -3,535
  -3,843
  -4,164
  -4,498
  -4,844
  -5,205
  -5,579
  -5,969
  -6,373
  -6,794
  -7,232
  -7,687
  -8,161
  -8,655
  -9,169
  -9,706
  -10,265
  -10,849
  -11,459
  -12,096
  -12,762
  -13,458
Total debt, $m
  6,276
  7,496
  8,800
  10,187
  11,657
  13,207
  14,835
  16,542
  18,326
  20,188
  22,128
  24,147
  26,247
  28,430
  30,698
  33,055
  35,505
  38,052
  40,699
  43,454
  46,319
  49,303
  52,411
  55,649
  59,026
  62,548
  66,223
  70,061
  74,070
  78,259
  82,638
Total liabilities, $m
  8,336
  9,556
  10,860
  12,247
  13,717
  15,267
  16,895
  18,602
  20,386
  22,248
  24,188
  26,207
  28,307
  30,490
  32,758
  35,115
  37,565
  40,112
  42,759
  45,514
  48,379
  51,363
  54,471
  57,709
  61,086
  64,608
  68,283
  72,121
  76,130
  80,319
  84,698
Total equity, $m
  7,026
  6,532
  7,423
  8,371
  9,375
  10,435
  11,548
  12,714
  13,934
  15,207
  16,532
  17,912
  19,348
  20,840
  22,390
  24,001
  25,676
  27,416
  29,226
  31,109
  33,067
  35,107
  37,231
  39,444
  41,752
  44,160
  46,672
  49,295
  52,035
  54,898
  57,891
Total liabilities and equity, $m
  15,362
  16,088
  18,283
  20,618
  23,092
  25,702
  28,443
  31,316
  34,320
  37,455
  40,720
  44,119
  47,655
  51,330
  55,148
  59,116
  63,241
  67,528
  71,985
  76,623
  81,446
  86,470
  91,702
  97,153
  102,838
  108,768
  114,955
  121,416
  128,165
  135,217
  142,589
Debt-to-equity ratio
  0.893
  1.150
  1.190
  1.220
  1.240
  1.270
  1.280
  1.300
  1.320
  1.330
  1.340
  1.350
  1.360
  1.360
  1.370
  1.380
  1.380
  1.390
  1.390
  1.400
  1.400
  1.400
  1.410
  1.410
  1.410
  1.420
  1.420
  1.420
  1.420
  1.430
  1.430
Adjusted equity ratio
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406
  0.406

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  912
  1,013
  1,142
  1,279
  1,425
  1,578
  1,739
  1,907
  2,083
  2,266
  2,458
  2,659
  2,866
  3,081
  3,304
  3,537
  3,778
  4,029
  4,289
  4,561
  4,843
  5,137
  5,443
  5,762
  6,095
  6,442
  6,804
  7,182
  7,578
  7,991
  8,423
Depreciation, amort., depletion, $m
  50
  53
  60
  67
  75
  83
  91
  100
  109
  119
  129
  135
  146
  157
  169
  181
  193
  207
  220
  234
  249
  264
  280
  297
  315
  333
  352
  371
  392
  414
  436
Funds from operations, $m
  -177
  1,066
  1,202
  1,346
  1,499
  1,660
  1,830
  2,007
  2,192
  2,385
  2,586
  2,794
  3,012
  3,238
  3,473
  3,717
  3,971
  4,235
  4,509
  4,795
  5,092
  5,401
  5,723
  6,059
  6,409
  6,775
  7,156
  7,554
  7,970
  8,404
  8,859
Change in working capital, $m
  -685
  -193
  -207
  -220
  -233
  -246
  -259
  -271
  -283
  -296
  -308
  -321
  -334
  -347
  -360
  -375
  -389
  -405
  -421
  -438
  -455
  -474
  -494
  -515
  -536
  -560
  -584
  -610
  -637
  -666
  -696
Cash from operations, $m
  508
  1,358
  1,409
  1,567
  1,733
  1,907
  2,088
  2,278
  2,475
  2,681
  2,894
  3,115
  3,346
  3,585
  3,834
  4,092
  4,360
  4,640
  4,930
  5,233
  5,547
  5,875
  6,217
  6,574
  6,946
  7,334
  7,740
  8,164
  8,607
  9,070
  9,554
Maintenance CAPEX, $m
  0
  -42
  -49
  -56
  -63
  -71
  -79
  -87
  -96
  -105
  -115
  -125
  -135
  -146
  -157
  -169
  -181
  -193
  -207
  -220
  -234
  -249
  -264
  -280
  -297
  -315
  -333
  -352
  -371
  -392
  -414
New CAPEX, $m
  -76
  -36
  -34
  -36
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -55
  -57
  -60
  -62
  -64
  -67
  -70
  -72
  -75
  -78
  -82
  -85
  -89
  -92
  -97
  -101
  -105
  -110
  -115
Cash from investing activities, $m
  -86
  -78
  -83
  -92
  -102
  -112
  -122
  -132
  -143
  -154
  -166
  -178
  -190
  -203
  -217
  -231
  -245
  -260
  -277
  -292
  -309
  -327
  -346
  -365
  -386
  -407
  -430
  -453
  -476
  -502
  -529
Free cash flow, $m
  422
  1,279
  1,325
  1,474
  1,631
  1,795
  1,967
  2,146
  2,333
  2,527
  2,729
  2,938
  3,155
  3,382
  3,617
  3,861
  4,115
  4,379
  4,654
  4,940
  5,238
  5,548
  5,871
  6,208
  6,560
  6,927
  7,311
  7,711
  8,130
  8,568
  9,026
Issuance/(repayment) of debt, $m
  -198
  1,220
  1,303
  1,387
  1,469
  1,550
  1,629
  1,707
  1,784
  1,862
  1,940
  2,019
  2,100
  2,183
  2,268
  2,357
  2,450
  2,547
  2,648
  2,754
  2,866
  2,984
  3,108
  3,238
  3,376
  3,522
  3,676
  3,838
  4,009
  4,189
  4,379
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -216
  1,220
  1,303
  1,387
  1,469
  1,550
  1,629
  1,707
  1,784
  1,862
  1,940
  2,019
  2,100
  2,183
  2,268
  2,357
  2,450
  2,547
  2,648
  2,754
  2,866
  2,984
  3,108
  3,238
  3,376
  3,522
  3,676
  3,838
  4,009
  4,189
  4,379
Total cash flow (excl. dividends), $m
  206
  2,500
  2,629
  2,862
  3,101
  3,345
  3,596
  3,853
  4,117
  4,389
  4,669
  4,957
  5,255
  5,565
  5,885
  6,219
  6,565
  6,926
  7,302
  7,694
  8,104
  8,531
  8,979
  9,447
  9,936
  10,449
  10,986
  11,549
  12,139
  12,757
  13,405
Retained Cash Flow (-), $m
  -1,377
  -836
  -891
  -948
  -1,004
  -1,059
  -1,113
  -1,167
  -1,220
  -1,273
  -1,326
  -1,380
  -1,435
  -1,492
  -1,551
  -1,611
  -1,674
  -1,741
  -1,810
  -1,882
  -1,959
  -2,039
  -2,124
  -2,214
  -2,308
  -2,407
  -2,512
  -2,623
  -2,740
  -2,863
  -2,993
Prev. year cash balance distribution, $m
 
  1,330
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  2,994
  1,738
  1,914
  2,096
  2,286
  2,482
  2,686
  2,897
  3,116
  3,343
  3,577
  3,820
  4,073
  4,335
  4,607
  4,891
  5,185
  5,492
  5,812
  6,145
  6,492
  6,855
  7,233
  7,629
  8,042
  8,474
  8,926
  9,399
  9,894
  10,412
Discount rate, %
 
  6.70
  7.04
  7.39
  7.76
  8.14
  8.55
  8.98
  9.43
  9.90
  10.39
  10.91
  11.46
  12.03
  12.63
  13.27
  13.93
  14.63
  15.36
  16.12
  16.93
  17.78
  18.67
  19.60
  20.58
  21.61
  22.69
  23.82
  25.01
  26.26
  27.58
PV of cash for distribution, $m
 
  2,806
  1,517
  1,545
  1,555
  1,545
  1,517
  1,472
  1,409
  1,333
  1,244
  1,145
  1,039
  930
  820
  711
  607
  509
  420
  339
  269
  209
  159
  118
  85
  60
  42
  28
  18
  11
  7
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Lennar Corporation, together with its subsidiaries, engages in the homebuilding activities in the United States. The company operates through Homebuilding East, Homebuilding Central, Homebuilding West, Lennar Financial Services, Rialto, and Lennar Multifamily segments. Its homebuilding activities primarily include the construction and sale of single-family attached and detached homes to first-time, move-up, and active adult homebuyers, as well as the purchase, development, and sale of residential land. The company also offers real estate related financial services, including mortgage financing, title insurance, and closing services for home buyers and others, as well as personal lines, property, and casualty insurance products. In addition, it is involved in raising, investing, and managing third party capital; and originating and selling into securitizations commercial mortgage loans, as well as investing in real estate related mortgage loans, properties, and related securities. Further, the company sponsors, invests, and manages private equity vehicles, and provides asset management and other services to the vehicles and other third parties. Additionally, the company develops multifamily rental properties. Lennar Corporation was founded in 1954 and is based in Miami, Florida.

FINANCIAL RATIOS  of  Lennar Cl A (LEN)

Valuation Ratios
P/E Ratio 13.4
Price to Sales 1.1
Price to Book 1.7
Price to Tangible Book
Price to Cash Flow 24.1
Price to Free Cash Flow 28.3
Growth Rates
Sales Growth Rate 15.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -16.5%
Cap. Spend. - 3 Yr. Gr. Rate 56.9%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 89.3%
Total Debt to Equity 89.3%
Interest Coverage 21
Management Effectiveness
Return On Assets 6.4%
Ret/ On Assets - 3 Yr. Avg. 6.1%
Return On Total Capital 7.1%
Ret/ On T. Cap. - 3 Yr. Avg. 6.8%
Return On Equity 14.4%
Return On Equity - 3 Yr. Avg. 14.6%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 13.7%
Gross Margin - 3 Yr. Avg. 13.8%
EBITDA Margin 13.2%
EBITDA Margin - 3 Yr. Avg. 13.7%
Operating Margin 12.1%
Oper. Margin - 3 Yr. Avg. 12.5%
Pre-Tax Margin 12.1%
Pre-Tax Margin - 3 Yr. Avg. 12.5%
Net Profit Margin 8.3%
Net Profit Margin - 3 Yr. Avg. 8.3%
Effective Tax Rate 31.4%
Eff/ Tax Rate - 3 Yr. Avg. 32.9%
Payout Ratio 3.8%

LEN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LEN stock intrinsic value calculation we used $10950 million for the last fiscal year's total revenue generated by Lennar Cl A. The default revenue input number comes from 2016 income statement of Lennar Cl A. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our LEN stock valuation model: a) initial revenue growth rate of 14.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.7%, whose default value for LEN is calculated based on our internal credit rating of Lennar Cl A, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Lennar Cl A.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of LEN stock the variable cost ratio is equal to 87.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for LEN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Lennar Cl A.

Corporate tax rate of 27% is the nominal tax rate for Lennar Cl A. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the LEN stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for LEN are equal to 2%.

Life of production assets of 5.1 years is the average useful life of capital assets used in Lennar Cl A operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for LEN is equal to -12.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $7026 million for Lennar Cl A - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 223.555 million for Lennar Cl A is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Lennar Cl A at the current share price and the inputted number of shares is $11.7 billion.


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COMPANY NEWS

▶ Company News for June 21, 2017   [10:37AM  Zacks]
▶ Earnings Calendar, Analyst Estimates And Stocks To Watch   [09:47AM  Investor's Business Daily]
▶ Lennar beats Street 2Q forecasts   [Jun-20-17 09:26PM  Associated Press]
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▶ Breakout Watch: Top Homebuilder Stock Still Just With Buy Range   [Jun-14-17 04:40PM  Investor's Business Daily]
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▶ 6 names that still work   [May-18-17 05:00PM  CNBC Videos]
▶ [$$] Investors Come Home to Gains   [12:32AM  The Wall Street Journal]
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▶ Lennar seeking approval for 385 homes in Broward   [May-11-17 08:20AM  American City Business Journals]
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▶ Two Homebuilders Pop On Earnings As Group Looks To Regroup   [May-09-17 04:33PM  Investor's Business Daily]
▶ Three sectors with the most at stake under Trump's tax plan   [Apr-27-17 02:49PM  Yahoo Finance Video]
▶ 10 Best Home Builders in California   [Apr-26-17 06:20PM  Insider Monkey]
▶ Lennar Stock Trades Ex-Dividend Friday   [01:23PM  Investopedia]
▶ Trump's Lumber War Vs. Canada Hammers U.S. Homebuilders   [Apr-25-17 04:10PM  Investor's Business Daily]
▶ Trump moves to impose tariff on Canadian lumber   [10:51AM  Yahoo Finance Video]
Stock chart of LEN Financial statements of LEN Annual reports of LEN
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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