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Lennar (LEN) posted mixed 3Q25 results, beating EPS expectations but missing on revenue and issuing soft Q4 guidance that is pressuring the stock.

• Revenue declined 6.1% yr/yr to $8.81 bln, falling short of expectations despite a beat on the bottom line.
• Q4 deliveries guidance of 22,000-23,000 homes was well below consensus, signaling a deliberate moderation in volume to allow the market to “catch up,” according to management.
• While interest rates remained elevated through most of Q3, a late-quarter decline and the Fed’s recent rate cut offer some optimism heading into Q4.
• New orders rose 12% yr/yr to 23,004 homes, exceeding the high end of LEN’s prior guidance (22,000-23,000), aided by continued use of buyer incentives.
• The average sales price dropped to $383,000 from $422,000 yr/yr, contributing to a sharp decline in gross margin on home sales to 17.5% from 22.5% last year.
• LEN expects Q4 gross margin on home sales to hold steady at 17.5%, possibly marking a bottom in margin contraction.

Briefing.com Analyst Insight:

LEN’s Q3 wasn’t a disaster, but the top-line miss, and weak Q4 deliveries outlook underscore the strain from elevated mortgage rates and pricing pressure. While incentives helped keep order momentum strong, the margin compression and soft guidance highlight the cost of maintaining that demand. The Fed’s recent rate cut may offer some relief, but with average selling prices under pressure and management opting to slow volume, visibility remains limited. These results could weigh on sentiment across the homebuilding sector, including peers like D.R. Horton (DHI), KB Home (KBH), and Toll Brothers (TOL).