Lennar Corporation (LEN) DCF Valuation
TGM's two-stage DCF values Lennar Corporation (LEN) between $111.19 and $185.39 depending on assumptions, with a base case of $142.52. Growth is taken from the company's own record (5-year revenue CAGR (FCF growth too volatile to use)), fading to 2.5% long-run; the discount rate (11%) reflects its beta.
What would today's price require?
$93.52 is justified only if free cash flow grows about -3.7% a year (fading to 2.5% long-run) at a 11% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 3.0%/yr | 12.0% | $111.19 |
| Base case | 6.0%/yr | 11.0% | $142.52 |
| Optimistic | 9.0%/yr | 10.0% | $185.39 |
| Analyst DCF (FMP) | independent reference — different model | $139.99 | |
Current Price
$93.52
Market-Implied Growth
-3.7%/yr
vs +6.0% 5Y actual
Model Scenario Range
$111.19 – $185.39
model output — not a price target
LEN DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for LEN (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $2.7B · 0.25B shares · net debt $2.3B
Estimated Fair Value
$159.69
+70.8% vs $93.52
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 6.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $93.52; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 9.0% | $197 | $206 | $216 | $227 | $241 |
| 10.0% | $171 | $177 | $184 | $192 | $201 |
| 11.0% | $150 | $155 | $160 | $165 | $172 |
| 12.0% | $134 | $137 | $141 | $145 | $149 |
| 13.0% | $120 | $123 | $125 | $129 | $132 |
About Lennar Corporation
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.
- Sector
- Consumer Cyclical
- Industry
- Residential Construction
- CEO
- Stuart A. Miller