$LEN.US After falling to $81, is it really undervalued now?
Today, Lennar (LEN) is trading at around $81.
Compared with the previous historical high of $179.756, it has already fallen to nearly half.
When many people see real estate stocks falling, their first reaction might be: Is U.S. real estate no longer any good?
But if we look at valuation, assets, and the cycle, I think:
With LEN around $81, it has entered a deeply undervalued area that long-term investors should focus on.
I. Why did LEN rise from $22 to $179?
LEN’s big surge previously wasn’t just market hype.
After 2020, the U.S. real estate market went through a strong cycle:
Stimulus for home-buying demand through ultra-low interest rates
The U.S. has a long-term shortage of housing supply
Home prices are rising
Tight inventory of existing homes
New home demand is increasing
Meanwhile, Lennar’s profits have also shown clear growth.
In fiscal year 2024, the company:
Revenue of about $35.4 billion
Net profit of about $3.9 billion
EPS reached above $14
Annual deliveries exceed 80,000 homes
The company has carried out large-scale share buybacks at the same time.
Back then, the logic driving market trading was very clear:
U.S. housing supply shortage + Lennar profit growth + Fed future rate cuts → the real estate market may enter a new round of recovery.
So LEN surged to a peak of $179.
II. Why did it fall again to $81?
The problem isn’t that Americans suddenly stopped buying homes.
The real question is:
Mortgage rates are too high.
Although the Fed has gone through a rate-cutting cycle, U.S. long-term Treasury yields and mortgage rates have not continued to fall as the market expected.
U.S. residents’ housing affordability is still very poor.
So real estate developers can only do this:
Price cuts
Offer home-buying incentives
Subsidize mortgage interest rates
To stimulate home-buying demand.
This directly compresses Lennar’s profit margins.
For example, the company’s recent gross margin has already dropped from nearly 20% in the past to around 15%.
That’s why the market started repricing:
LEN’s future profits may not be able to be sustained at the high levels seen during the housing boom period.
So the stock price slid all the way from $179 to $81.
III. Is $81 really cheap?
I think: it has clearly entered the undervaluation zone.
First, from the perspective of book value.
LEN’s book value per share is roughly around $89.
The stock price is now around $81.
Means:
The market is selling LEN at a price below the company’s net asset book value.
For one of the largest U.S. homebuilders, this valuation is worth serious study.
More importantly, the company itself is also buying back shares
In the second quarter of 2026, Lennar carried out a large-scale share buyback.
The average buyback price is about:
$89.35 per share
and now the market price is only:
Around $81
In other words:
Lennar itself has been buying back shares around $89, and the market is offering you a cheaper price now.
Of course, the company’s buyback price doesn’t mean the stock price absolutely won’t fall further.
But at least it shows:
From the viewpoint of corporate capital allocation, around $89 has been considered by management as a buyback-worthy value.
IV. Why I think $81 is worth paying attention to
The current LEN has a few very clear characteristics:
✔ The stock is down significantly from its all-time high
✔ The P/B is approaching or even falling below 1x
✔ The company’s balance sheet remains healthy
✔ The long-term housing supply problem in the U.S. has not been solved
✔ Lennar is still one of the largest homebuilders in the U.S.
✔ Continues to carry out share buybacks
✔ The market already fully understands the risk of high mortgage rates
In other words:
The market doesn’t really not know the difficulties LEN faces.
On the contrary, the market is pricing it based on a very pessimistic real estate outlook.
V. But why can’t you go all-in?
Because the biggest risk for LEN is real right now.
It’s not a market misunderstanding.
Instead, it is:
The company’s profitability is indeed declining.
If U.S. mortgage rates continue to stay high:
Home sales may continue to face pressure
The company needs to keep cutting prices
Gross margin could fall further
EPS could continue to decline
So $81 is cheap, but it doesn’t necessarily mean it’s the absolute bottom.
Undervalued ≠ up tomorrow.
The market could very well push real estate stocks to even lower levels.
My conclusion
I think, around $81, LEN:
It is already a deeply undervalued zone where long-term value investors would be worth accumulating in batches.
But it isn’t the kind of opportunity where you can go all-in with your eyes closed.
Because the real estate industry is still in a high-interest-rate cycle, the risk of earnings downside remains.
So the strategy I favor more is:
Buy in batches, not bet everything at once.
If it continues to fall in the future, it can actually increase the margin of safety further.
What truly determines LEN’s future value isn’t the drop of 2% today.
Instead, it is:
When will U.S. mortgage rates truly fall?
When will U.S. housing demand be released again?
When will Lennar’s gross margin recover?
If the housing market recovers in the future, LEN’s price around $81 could become a very good long-term cost.
Chasing from $179 to researching value at $81.
That’s the biggest difference between price and value.
#LEN #U.S. stocks #Value investing #Real estate #Long-term investment #Lennar