Lennar Corporation (LEN) Intrinsic Value & DCF Valuation
Residential Construction · NYSE
Current Price
$76.80
Intrinsic Value
$64.77
-18.6% margin of safety
What Is Lennar Corporation's Intrinsic Value?
As of 2026-10-08, the base-case DCF model estimates the intrinsic value of Lennar Corporation (LEN) at $64.77 per share, compared with a market price of $76.8, a margin of safety of -18.6%. The base case assumes 1.7% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $53.21 to $78.05. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Lennar Corporation (LEN) Undervalued?
At the current price of $76.8, LEN trades above the base-case intrinsic value estimate by a meaningful margin. By this model the stock looks expensive, though faster growth than assumed would change the picture.
COMPETITIVE MOAT
↑Scale and Land Acquisition
Lennar's extensive land holdings and large-scale operations provide significant cost advantages. This scale allows for efficient production and purchasing power, difficult for smaller competitors to replicate.
↑Brand Recognition and Trust
As a major national builder, Lennar benefits from established brand recognition and a reputation for quality. This can translate into customer preference and reduced marketing costs.
↑Diversified Product Offerings
Lennar offers a range of home types and price points, catering to various buyer segments. This diversification reduces reliance on any single market niche.
INVESTMENT RISKS
↓Regulatory and Permitting Hurdles
Navigating complex and varying local zoning laws and building regulations can cause project delays and increase costs. Changes in these regulations can significantly impact development timelines and profitability.
↓Labor and Material Shortages
Availability and cost of skilled labor and construction materials are critical. Shortages or price spikes can disrupt production schedules and erode margins.
↓Competition from Other Builders
The homebuilding market is competitive, with numerous national and local players vying for market share. Intense competition can pressure pricing and profitability.
Base case
LEN base case valuation
Intrinsic Value
$64.77
Margin of safety
-18.6%
Expected annual return
-3.4%
Base case assumptions: 1.7% annual growth, 10.0% discount rate, 23.7x exit multiple, 5 year projection. Data as of 2026-10-08.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the LEN valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Lennar Corporation respond.
Open DCF Calculator for LENCompany Overview
Lennar Corporation, an influential homebuilder in the United States, operates primarily under its widely recognized Lennar brand, alongside its various subsidiaries. The company structures its diverse business initiatives across several distinct divisions: regional homebuilding segments (East, Central, Texas, and West), a Financial Services arm, a Multifamily property development unit, and a broader "Lennar Other" category. At the heart of its operations, Lennar is deeply involved in the creation and sale of single-family homes, encompassing both attached and detached designs. Its activities also span the acquisition, development, and subsequent sale of land designated for residential use, in addition to the comprehensive development, construction, and ongoing management of rental properties in the multifamily sector. Expanding beyond physical construction, Lennar provides essential services such as residential mortgage financing, title protection, and closing services for its clientele and other interested parties. It also actively originates and divests securitized commercial mortgage loans. Furthermore, the corporation participates in strategic fund investment endeavors. Lennar's extensive customer base primarily caters to first-time purchasers, individuals seeking to upgrade their homes, active adult communities, and the luxury housing market. This enterprise, founded in 1954, is officially based in Miami, Florida.
Financial Metrics — LEN Stock Valuation Data
Revenue/Share (TTM)
$134.48
FCF/Share (TTM)
$3.41
ROIC (TTM)
4.0%
ROE (TTM)
6.0%
P/FCF
23.5x
EV/EBITDA
11.2x
FCF Yield
4.22%
Debt/Equity
0.20x
On a trailing twelve-month basis, LEN generates free cash flow per share of $3.41 alongside a ROIC of 4.0%, both central inputs for a DCF valuation. Its P/FCF ratio of 23.5x and FCF yield of 4.22% then frame how LEN is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of LEN?
Lennar Corporation currently generates $3.41 in free cash flow per share. At the current price of $76.80, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is LEN undervalued?
LEN trades at a P/FCF ratio of 23.5x with a free cash flow yield of 4.22%. This P/FCF is in a moderate range. However, whether LEN is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value LEN stock using DCF?
To perform a DCF valuation on Lennar Corporation: (1) Start with the trailing free cash flow per share ($3.41) as the base, (2) project future FCF growth over 5-10 years based on Residential Construction industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting LEN's risk profile — with a debt-to-equity of 0.20x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to LEN?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Lennar Corporation, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Residential Construction trends, then discounting those amounts to today's dollars. LEN's ROIC of 4.0% means the company's return on invested capital sits below the level that typically clears its cost of capital.
How does WACC affect LEN stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For LEN, with a debt-to-equity ratio of 0.20x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 11.2x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See LEN PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Cyclical valuationsDCF and P/E value LEN with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-10-08. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.