Shares of Lennar Corporation (LEN) tumbled 5.01% in after-hours trading on Thursday, following the release of the homebuilder's third-quarter earnings report. The sharp decline suggests that the company's financial results fell short of market expectations, despite recent optimism surrounding the housing sector.

Lennar reported third-quarter revenue of $8.8 billion, missing analysts' estimates of $8.997 billion. The company's earnings per share came in at $2.29, though it's unclear how this compares to expectations. Lennar delivered 21,584 homes during the quarter, with net income reaching $591 million and homebuilding operating earnings of $760 million.

The stock's negative reaction may also be attributed to Lennar's fourth-quarter outlook, which projects deliveries between 22,000 to 23,000 units. This guidance could be viewed as conservative by investors, especially considering the recent Fed rate cut and signs of stabilization in housing demand noted by some analysts.

The after-hours plunge erases gains made earlier in the day when Bank of America raised its price target on Lennar from $115 to $135. This dramatic shift highlights the volatility in the homebuilding sector and the significant impact of earnings reports on investor sentiment, even in the face of broader market optimism.