LENCAUTIOUS

Return on Equity (ROE)

7.4%

Updated 317h ago

Sector Performance

29th percentile

LEN

7.4%

Sector Median

13.8%

Sector Avg

31.4%

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Deep Analysis

Return on Equity (ROE) measures how much profit a company generates for each dollar of shareholder equity — a 7.4% ROE means LEN earned $0.074 for every $1 of equity in the most recent period.

This is below the sector median of 13.9%, placing LEN in the 28th percentile among peers, meaning 72% of comparable companies have higher ROE. The year-over-year change is not available, but quarter-over-quarter ROE dropped 22.1% from 9.5% to 7.4%, signaling a recent deterioration in profitability relative to equity. The combination of a low absolute ROE and a sharp quarterly decline points to higher investment risk, as the company is generating less return on shareholder capital than both its peers and its own recent performance. This metric directly supports the CAUTIOUS verdict, because a below-median ROE with a declining trend suggests weak earnings efficiency and potential headwinds for shareholder value.

Frequently Asked Questions

What does the Return on Equity (ROE) tell investors about LEN?

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.

How is the Return on Equity (ROE) calculated?

Return on Equity (ROE) is calculated as: Net Income / Shareholders' Equity.

Who are LEN's closest peers by Return on Equity (ROE)?

The closest peers by Return on Equity (ROE) include: MRNA (-36.6%), FICO (-37.3%), XRAY (-37.7%), VRSN (-38.3%), MSCI (-45.3%).

The Formula

Net Income / Shareholders' Equity

Why It Matters

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.