Lennar Q1 Earnings Preview: I Am Turning Contrarian (Rating Upgrade)

Dilantha De Silva13K FollowersFollow5ShareSavePlay(12min)Comment(1)SummarySince I last covered Lennar Corporation in September 2024, the company has lost ~44% of its market value. I feel good about not jumping on board despite the company's asset-light pivot.LEN has made noteworthy progress on its asset-light front, but its margins have suffered due to aggressive sales incentives amid challenging macro conditions.As we approach Lennar's Q1 FY 2026 earnings print, I am impressed by the company's strategy to focus on velocity growth, not margin expansion.As I discuss in this analysis, Lennar's ROIC could go meaningfully even if gross margins decline to 15% this year. jetcityimage/iStock Editorial via Getty Images Lennar Corporation (LEN) has had a very challenging 18 months. Since I last covered Lennar in September 2024, the company has lost ~44% of its market value. Back then, I was impressed by Lennar's strategic asset dispositionsThis article was written byDilantha De Silva13K FollowersFollowDilantha De Silva is an experienced equity analyst and investment researcher with over 10 years in the investment industry. He writes insightful articles for Seeking Alpha, GuruFocus, TipRanks, and ValueWalk, with a significant following on Seeking Alpha. Dilantha’s expertise spans across various sectors, with a particular focus on small-cap stocks that are overlooked by Wall Street analysts. He is a CFA Level III candidate and holds qualifications from the Chartered Institute for Securities and Investment (CISI). Dilantha has been featured on CNBC and Bloomberg, and his work has been prominently showcased on Nasdaq, Yahoo Finance, and other leading investment platforms. When not analyzing stocks and writing, Dilantha is involved in private equity transactions, including acquiring and managing businesses.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.