Lennar stock falls as housing market weakness and high mortgage rates hurt profits and margins

Lennar Corporation's shares have dropped about 20% over the past year due to ongoing housing market weakness and elevated mortgage rates pressuring its margins and earnings. The company’s aggressive home delivery targets and high inventory levels have forced it to rely on incentives, which reduces pricing power and profitability. Gross margins fell to 15.2% in Q1, and earnings per share are now expected between $5.00 and $6.00 for the year, implying a stretched 16x price-to-earnings ratio. Despite a strong balance sheet and ongoing share buybacks, the fair value is estimated at $80, suggesting about 15% downside from current prices.