Lennar Corporation (LEN-B) Q4 2024 Earnings Report

Lennar reported Q4 2024 revenue of $9.9469 billion, up 36% year over year, with gross profit of $1.556 billion and a gross margin of 15.64%. Net income reached $1.096 billion, translating to an EPS of $4.06. While top-line momentum reflected ongoing demand, the company faced margin pressure in Q4 from elevated incentives and fluctuating absorption driven by higher interest rates. Management signaled a deliberate shift toward volume-driven, asset-light growth, aiming for 86,000–88,000 deliveries in 2025—a~8%–10% uplift versus 2024—supported by continued cost discipline, cycle-time improvements, and a gradual normalization of demand as financing costs stabilize.

Key near-term guidance for Q1 2025 includes 17,500–18,000 orders and 17,000–17,500 deliveries, with a gross margin target of 19.0%–19.25% and SG&A in the high-8% range. Lennar also highlighted a continuing transition to an asset-light model, a strategic focus on Milrose as a land-banking platform, and the Rausch Coleman integration as value-creating catalysts. The balance sheet remains robust, with $4.7 billion of cash at year-end and total liquidity of approximately $7.6 billion, debt-to-capital at 7.5%, and a net debt position that remains negative (net cash) amid ongoing buybacks. The combination of backlog execution, cash flow durability, and the structural shift toward asset-light operations supports a constructive longer-term investment thesis, even as near-term margin volatility and macro housing headwinds warrant caution.

Overall, Lennar’s QQ4 performance demonstrates the company’s ability to sustain high volumes, manage working-capital turns, and reconfigure its asset base to reduce risk and improve predictability. Investors should monitor rate trajectory, backlog absorption, the timing and integration milestones of Milrose and Rausch Coleman, and the pace of margin stabilization as demand normalization unfolds.