AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 18/10/2026
Moat31
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 1/4 · Scale and standardization support current efficiency, corroborated by lower construction costs and faster cycles. Numerous competing builders and the absence of comparative cost evidence leave this a weak structural advantage.
durability · 1/4 · Implemented land options and production improvements support an ongoing operating capability, but repeated price concessions and rising option costs demonstrate fragile economic protection.
customer dependency · 1/4 · A 14% cancellation rate and conditional cancellation rights show limited transaction commitment. Repeated price reductions to maintain sales indicate weak customer dependence; repeat demand is not established.
erosion resilience · 2/4 · Construction savings, faster cycles and lower quarterly incentives demonstrate partial resilience. Higher land costs, increased resale competition and failed inflation pass-through show that these defenses are incomplete.
Pricing power38
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 0/4 · Actual substantial price reductions and incentive-driven price declines are direct adverse evidence. Recently lower quarterly incentives offer some relief; the East price increase primarily reflected product mix rather than demonstrated pricing power.
retention · 2/4 · Indirect transaction evidence is mixed: cancellations improved from 16% in 2023 to 14% in 2024 and remained 14% in 2025, while deliveries increased in 2025. Sales nevertheless depended on price concessions. These results do not establish repeat purchasing or loyalty.
margin resilience · 2/4 · Construction savings partly offset labor pressure and helped improve East gross margin in the third quarter of 2026. Realized inflation under-recovery and rising land costs prevent a strong resilience assessment; the segment improvement is not generalized company-wide.
contractual freedom · 2/4 · Lennar demonstrably adjusts prices to match sales and production, supporting discretion over new-sale terms. Buyer cancellation provisions and market-driven concessions limit the economic protection of those terms. Unilateral repricing of signed contracts is not established.
Predictability87
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 10.52
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 4.81
Financial strength—
Missing required inputs: currentRatioGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 0.00
- netDebtEbitGrade
- 85.27
- interestCoverageGrade
- 30.22
- Debt / FCF (x)
- 208.46
- Net debt / operating income (x)
- 0.74
- cashInterestPaid
- 50.14
- cashInterestCoverage
- 4.32
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- -4.85
- 3-year average SBC / revenue (%)
- 0.48
- cashConversionGrade
- 73.77
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Completed land restructuring and repurchases demonstrate execution of capital decisions, but fiscal 2025 operating cash flow of $217 million was small relative to $1.7 billion of cash repurchases. Subsequent inventory and deposit cash uses and increased revolving-credit leverage make discipline mixed; repurchase value creation is unproven.
incentive alignment · 3/4 · Actual cash incentive decisions included negative discretion, performance shares vested below target, and NEOs exceeded ownership requirements. These demonstrate functioning alignment mechanisms. Immediate service-based vesting upon eligible retirement weakens retention protection and prevents an exceptional assessment.
execution · 3/4 · Direct operating evidence supports strong execution of production efficiency and restructuring: construction costs declined, cycle time improved, deliveries increased and the land spin-off was completed. This assesses operational implementation rather than customer retention or guaranteed future returns; pricing and cash absorption remain weaknesses.
governance · 2/4 · An independent board majority, independent key committees and a lead director provide substantive oversight arrangements. Ten-vote Class B shares and the combined executive chair and CEO role constrain shareholder equality and separation of authority. Supplied proposals do not establish subsequent governance changes.
Evidence
Construction costs per square foot declined further to approximately $80, down 6% from a year ago, and our cycle time reached a record low of 116 days, down from 121 days from second quarter 2026 and 126 days a year ago, reflecting the continued benefit of consistent volume and even-flow production.
MD&A / third-quarter 2026 construction costs and cycle time · Filed 02/10/2026
Our Everything’s Included® marketing program enables us to differentiate our homes from those of our competitors by including premium features as standard at competitive prices, while reducing construction and overhead costs through a simplified construction process, product standardization and volume purchasing.
Business / Everything’s Included standardization and purchasing claims · Filed 28/01/2026
The spin-off involved $5.6 billion of land assets, representing approximately 87,000 homesites.
Notes / completed Millrose spin-off land assets and homesites · Filed 28/01/2026
Immediately following the Millrose Spin-Off, we entered into certain contractual arrangements with Millrose, pursuant to which Millrose provides ongoing financing of land acquisition and homesite development and will deliver fully developed homesites on a just-in-time basis for Lennar, in consideration of option deposit and monthly option payments to maintain the purchase options on such acquired land and homesites (such arrangement, the “Millrose HOPP’R Arrangement”).
Related transactions / implemented Millrose land financing and option arrangement · Filed 26/02/2026
Our land-light model enables us to be a significantly more efficient land buyer, land developer and land administrator at a meaningfully lower cost of capital.
MD&A / management assertion of land-light efficiency and cost of capital · Filed 29/06/2026
Land costs per home, reflected in part through option maintenance fees associated with extended deal durations, have increased and will continue to pressure margin for a period of time while we work through land positions underwritten and committed under prior market conditions.
MD&A / realized land cost and option maintenance fee pressure · Filed 02/10/2026
Resales of existing housing inventory have also begun to increase, particularly in Texas and Florida, intensifying competition for buyers in those markets.
MD&A / increased existing-home competition in Texas and Florida · Filed 02/10/2026
During fiscal 2025 and 2024, a number of our markets experienced significant softening that required us to make substantial price reductions in order to maintain a steady sales pace.
Risk factors / realized substantial price reductions in fiscal 2025 and 2024 · Filed 28/01/2026
Weaker demand has precluded us from raising home prices enough to keep up with the rate of inflation, which has reduced our profit margins.
Risk factors / realized inability to pass through inflation · Filed 28/01/2026
During the nine months ended August 31, 2026, cash used in operating activities was impacted by (1) an increase in inventories due to land purchases and construction costs of $1.7 billion; (2) an increase in deposits and pre-acquisition costs on real estate of $795 million primarily as a result of option contracts with land banks, which included option maintenance fees paid to land banks, and an increase in reimbursements to be received from municipalities for completed land development; and (3) a decrease in accounts payable and other liabilities of $371 million.
Liquidity / nine-month 2026 inventory, deposit and liability cash uses · Filed 02/10/2026
As of August 31, 2026, the total deposits and pre-acquisition costs on real estate relating to contracts with the Land Banks were $2.7 billion, which are included in the corresponding line item presented in the table above.
Notes / August 2026 land-bank deposits and pre-acquisition costs · Filed 02/10/2026
Notwithstanding these pressures, sales incentives on deliveries declined during the quarter, and cost efficiencies from scale have helped offset a portion of the increase in labor costs.
MD&A / lower quarterly incentives and partial labor cost offsets · Filed 02/10/2026
The overall decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of sales incentives.
Homebuilding East / second-quarter 2026 price decline attributed to incentives · Filed 29/06/2026
The overall increase in the average sales price of homes delivered was primarily due to product mix.
Homebuilding East / third-quarter average price increase attributed to product mix · Filed 02/10/2026
During the third quarter of 2026, gross margin percentage on homes delivered increased primarily due to higher revenue per square foot and a decrease in construction costs, partially offset by higher land costs year over year.
Homebuilding East / third-quarter gross margin improvement and offsets · Filed 02/10/2026
We experienced a cancellation rate of 14% in both 2025 and 2024.
Business / fiscal 2025 and 2024 cancellation rates · Filed 28/01/2026
We experienced a cancellation rate of 14% in 2024 and 16% in 2023.
Business / fiscal 2024 and 2023 cancellation rates · Filed 23/01/2025
In some instances, purchasers are permitted to cancel sales contracts if they fail to qualify for financing or under certain other circumstances.
Backlog / contractual cancellation conditions · Filed 02/10/2026
•Even flow production - We adjust prices, with our gross margin being a shock absorber, in an effort to maintain consistent starts and sales paces in order to generate increased market share in all the markets we build in.
Business strategy / price adjustment to maintain production and sales pace · Filed 28/01/2026
We compete in each of our markets with numerous national, regional and local homebuilders.
Competition / numerous national, regional and local homebuilders · Filed 28/01/2026
We ended the year with total revenues of $34.2 billion, net earnings of $2.1 billion, a 19.7% return on inventory, and $217 million in operating cash flow.
Compensation discussion / fiscal 2025 results and operating cash flow · Filed 26/02/2026
In fiscal 2025, we also repurchased 22.1 million shares: 14.1 million shares of Lennar common stock for $1.7 billion in cash and 8.0 million shares through the Exchange Offer.
Compensation discussion / completed fiscal 2025 cash and exchange repurchases · Filed 26/02/2026
At August 31, 2026, Homebuilding debt to total capital was higher compared to November 30, 2025, primarily as a result of an increase in Homebuilding debt due to outstanding borrowings under our unsecured revolving Credit Facility, partially offset by net earnings and debt paydowns.
Liquidity / increased leverage from revolving credit borrowings · Filed 02/10/2026
Annual cash incentive compensation for our NEOs was paid based on actual achievement of performance criteria and, where appropriate, the Compensation Committee exercised its negative discretion to further align NEO pay with performance results.
Compensation discussion / actual cash incentive payments and negative discretion · Filed 26/02/2026
The performance share awards that vested in fiscal 2025 were tied to actual performance and, accordingly, vested at an amount below target performance.
Compensation discussion / fiscal 2025 performance shares vested below target · Filed 26/02/2026
All of the NEOs significantly exceed their minimum stock ownership requirements.
Compensation policies / actual NEO ownership relative to requirements · Filed 26/02/2026
If any retirement-eligible NEO were to retire, his or her service-based restricted stock would immediately vest.
Compensation / accelerated service-based vesting upon eligible retirement · Filed 26/02/2026
We have had a Lead Director since 2005, a majority of our Board is independent, and all members of the Audit, Compensation, and Nominating and Corporate Governance Committees are independent.
Governance / independent board majority and committee membership · Filed 26/02/2026
The only material difference between our two classes of common stock is that the Class A common stock has one vote per share while the Class B common stock has ten votes per share.
Governance / unequal Class A and Class B voting rights · Filed 26/02/2026
Our Board believes that having an Executive Chairman and an independent Lead Director, each with distinct responsibilities, works well for us because all but one of our directors (our Executive Chairman and Chief Executive Officer) are independent, and our Lead Director can cause the independent directors to meet in executive sessions at any time.
Governance / combined executive chair and CEO role and independent lead director · Filed 26/02/2026
New home deliveries, including deliveries from unconsolidated entities, were 82,583 in fiscal 2025, compared to 80,210 in fiscal 2024 and
Business / fiscal 2025 and 2024 home deliveries · Filed 28/01/2026
Pursuant to the terms of the Millrose HOPP’R Arrangement, we will continue to pay monthly option payments to maintain our purchase options on the Transferred Assets, until we exercise or forfeit the purchase options.
Related transactions / continuing monthly Millrose option payments · Filed 26/02/2026
