DCF Studio

    LEN · NYQ · Consumer Cyclical

    Lennar Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 172.47

    Market price

    USD 91.02

    Implied upside

    +89.5%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-11-30

    AdjustedReported capital expenditure averages just 0.37% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.00% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.
    AdjustedCapital expenditure runs at 1.0% of revenue against depreciation of 0.3%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 172.47+89.5%
    Exit multiple
    USD 159.51+75.2%
    Market price
    USD 91.02

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn5bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 31.5bnUSD 32.4bnUSD 33.4bnUSD 34.3bnUSD 35.3bnUSD 36.3bnUSD 37.2bnUSD 38.2bnUSD 39.2bnUSD 40.2bn+2.7%
    EBITUSD 4.6bnUSD 4.7bnUSD 4.8bnUSD 5.0bnUSD 5.1bnUSD 5.2bnUSD 5.4bnUSD 5.5bnUSD 5.7bnUSD 5.8bn+2.7%
    NOPATUSD 3.6bnUSD 3.7bnUSD 3.8bnUSD 3.9bnUSD 4.0bnUSD 4.1bnUSD 4.3bnUSD 4.4bnUSD 4.5bnUSD 4.6bn+2.7%
    Add depreciation & amortisationUSD 102.3mUSD 105.4mUSD 108.5mUSD 111.6mUSD 114.7mUSD 117.8mUSD 121.0mUSD 124.2mUSD 127.3mUSD 130.5m+2.7%
    Less capital expenditureUSD -315.0mUSD -380.5mUSD -449.4mUSD -521.7mUSD -597.4mUSD -676.5mUSD -759.0mUSD -845.0mUSD -934.5mUSD -1.0bn+14.0%
    Capex, % of revenue1.0%1.2%1.3%1.5%1.7%1.9%2.0%2.2%2.4%2.6%-
    Less increase in working capitalUSD 1.3bnUSD -470.0mUSD -474.3mUSD -478.0mUSD -481.3mUSD -484.1mUSD -486.4mUSD -488.2mUSD -489.4mUSD -490.1m-
    Free cashflow to firmUSD 4.7bnUSD 3.0bnUSD 3.0bnUSD 3.0bnUSD 3.1bnUSD 3.1bnUSD 3.1bnUSD 3.2bnUSD 3.2bnUSD 3.2bn-4.2%
    Discount factor0.95700.87650.80270.73520.67330.61660.56470.51720.47370.4338-
    Present valueUSD 4.5bnUSD 2.6bnUSD 2.4bnUSD 2.2bnUSD 2.1bnUSD 1.9bnUSD 1.8bnUSD 1.6bnUSD 1.5bnUSD 1.4bn-
    Present Value Of The ForecastUSD 22.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.255Reported 1.381, pulled toward 1.0 (Blume)
    Cost of equity10.20%Risk-free + beta x equity risk premium
    Cost of debt6.89%Assumed: risk-free + 200bp (interest expense not reported)
    Market capitalisationUSD 21.7bn78.7% of capital
    Total debtUSD 5.9bn21.3% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC9.19%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 172.47

    53% of EV

    Forecast FCFF, final year
    USD 3.2bn
    Capex at depreciation, working capital in reinvestment
    USD 4.6bn
    Less reinvestment at g/ROIC (19.6% of NOPAT)
    USD -896.8m
    Capitalised
    USD 3.7bn
    ROIC (reported)
    12.8%
    Terminal value, undiscounted
    USD 56.5bn
    Terminal value, discounted
    USD 24.5bn
    Enterprise value
    USD 46.5bn
    Less net debt
    USD 2.1bn
    Equity value
    USD 44.5bn

    Exit at 8.2x EBITDA

    Value per shareUSD 159.51

    49% of EV

    Terminal value, undiscounted
    USD 48.8bn
    Terminal value, discounted
    USD 21.2bn
    Enterprise value
    USD 43.2bn
    Less net debt
    USD 2.1bn
    Equity value
    USD 41.1bn

    Spread between methods: 8%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.19%233.07238.71245.91255.23267.52
    8.19%197.25199.62202.70206.66211.81
    9.19%170.85171.50172.47173.83175.70
    10.19%150.61150.31150.15150.16150.39
    11.19%134.62133.78133.00132.29131.66

    Outlined: this model. Green text: above today's price of 91.02. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year0.5%1.6%-12.3%
    EBIT margin20.2%14.4%8.2%
    Discount rate-9.2%15.6%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.