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Pultegroup (PHM)
NYSE:PHM
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PulteGroup
(NYSE:PHM)
78Outperform
Positive Factors
Earnings
PulteGroup (PHM) reported 1Q25 EPS of $2.57, beating the forecast of $2.48 and consensus of $2.43 driven by stronger gross margin and higher ASP.
Financial Performance
PulteGroup offers a best-in-class mix of elevated returns, attractive capital allocation, and a balanced mix of buyer cohorts.
Market Positioning
PulteGroup is seen as well-positioned amidst elevated interest rates through a strong move-up strategy.
Negative Factors
Guidance
PHM lowered 2025 deliveries guide to 29k-30k, down 6% YoY at the midpoint.
Incentives
Elevated incentives in the near term could weigh on fourth quarter gross margins.
Orders
PHM orders of 7.8K were down 7% YoY and below normal seasonality.
PulteGroup (PHM) vs. S&P 500 (SPY)
Market Cap
$20.42B
Dividend Yield0.82%
Average Volume (3M)2.41M
Price to Earnings (P/E)7.2
Beta (1Y)0.91
Revenue Growth8.86%
EPS Growth13.60%
CountryUS
Employees6,793
SectorConsumer Cyclical
Sector Strength62
IndustryResidential Construction
Share Statistics
EPS (TTM)14.18
Shares Outstanding200,427,190
10 Day Avg. Volume2,226,846
30 Day Avg. Volume2,408,684
Financial Highlights & Ratios
PEG Ratio0.53
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.07
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit4.18
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$123.27Price Target Upside18.01% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
PulteGroup Business Overview & Revenue Model
Company DescriptionPulteGroup, Inc. (PHM) is one of the largest homebuilding companies in the United States, operating in the residential construction sector. The company is known for its diverse portfolio of brands, including Pulte Homes, Centex, Del Webb, DiVosta, and John Wieland Homes and Neighborhoods. PulteGroup focuses on building and selling houses across various price points and demographics, including first-time, move-up, and active adult homebuyers, thereby catering to a wide range of consumer needs and preferences.
How the Company Makes MoneyPulteGroup makes money primarily through the construction and sale of residential homes. The company's revenue model is centered around developing land, designing, and building homes, and ultimately selling these properties to consumers. PulteGroup's key revenue streams include homebuilding operations, which involve the sale of single-family detached homes, townhouses, and condominiums. Additionally, the company may earn revenue from mortgage banking operations through its subsidiary, Pulte Mortgage, which provides mortgage and financial services to homebuyers. Significant factors contributing to PulteGroup's earnings include market demand for new homes, land acquisition strategies, and efficient management of construction costs. The company's earnings are also influenced by economic conditions, interest rates, and government policies affecting the housing market.
PulteGroup Key Performance Indicators (KPIs)
Any
Closing Units by Geography
Tracks the number of homes closed in various regions, indicating sales performance and the company's ability to convert orders into completed sales.
Tracks the number of homes closed in various regions, indicating sales performance and the company's ability to convert orders into completed sales.
Data provided by:
Main Street Data
Main Street DataPulteGroup Financial Statement Overview
Summary
PulteGroup demonstrates strong financial health with high profitability, efficient operations, and solid shareholder returns. While facing challenges in revenue growth and free cash flow sustainability, its low leverage and strong equity position offer resilience. Continued focus on revenue expansion and cash flow improvement will be key to maintaining its financial strength.Income Statement
PulteGroup's income statement reveals a robust financial position with high profitability metrics. The TTM Gross Profit Margin stands at 28.9%, and the Net Profit Margin is an impressive 17.3%, showcasing efficient cost management and strong bottom-line performance. The revenue growth rate from 2024 to TTM shows a decline of 22%, indicating a potential challenge in sustaining revenue growth. EBIT and EBITDA margins are strong at 22% and 22.7%, respectively, underscoring operational efficiency.85
Very Positive
Balance Sheet
The balance sheet displays a solid financial foundation with a healthy debt-to-equity ratio of 0.14, highlighting low financial leverage and reduced financial risk. The Return on Equity (ROE) is excellent at 20.9%, reflecting strong returns for shareholders. The equity ratio is robust at 80.7%, indicating high financial stability. However, the decrease in total assets from 2024 suggests a potential risk in asset growth.80
Positive
Cash Flow
PulteGroup's cash flow statement shows effective cash management, with a Free Cash Flow to Net Income ratio of 55.6%, indicating strong cash generation relative to reported profits. The Free Cash Flow Growth Rate is negative at -13.8% from 2024 to TTM, suggesting challenges in maintaining free cash flow levels. The Operating Cash Flow to Net Income ratio of 59.5% highlights a robust cash conversion capability, though there is room for improvement.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 17.95B | 16.06B | 16.23B | 13.93B | 11.04B | Gross Profit |
| 5.22B | 4.72B | 4.83B | 3.78B | 2.78B | EBIT |
| 3.90B | 3.43B | 3.45B | 2.64B | 1.79B | EBITDA |
| 4.10B | 3.53B | 3.52B | 2.63B | 1.83B | Net Income Common Stockholders |
| 3.08B | 2.60B | 2.62B | 1.95B | 1.41B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.24B | 2.32B | 1.05B | 1.78B | 2.58B | Total Assets |
| 17.36B | 16.09B | 14.80B | 13.35B | 12.21B | Total Debt |
| 2.25B | 2.55B | 2.63B | 2.66B | 3.16B | Net Debt |
| 641.19M | 746.82M | 1.58B | 876.08M | 581.92M | Total Liabilities |
| 5.24B | 5.70B | 5.88B | 5.86B | 5.64B | Stockholders Equity |
| 12.12B | 10.38B | 8.91B | 7.49B | 6.57B |
| Cash Flow | Free Cash Flow | |||
| 1.56B | 2.10B | 555.80M | 931.24M | 1.73B | Operating Cash Flow |
| 1.68B | 2.20B | 668.47M | 1.00B | 1.78B | Investing Cash Flow |
| -94.48M | -129.09M | -171.74M | -124.13M | -107.95M | Financing Cash Flow |
| -1.78B | -1.31B | -1.24B | -1.68B | -295.62M |
PulteGroup Technical Analysis
Neutral
104.46
Price Trends
101.66
Positive
106.98
Negative
119.56
Negative
Market Momentum
0.45
Negative
57.81
Neutral
80.10
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PHM, the sentiment is Neutral. The current price of 104.46 is above the 20-day moving average (MA) of 98.28, above the 50-day MA of 101.66, and below the 200-day MA of 119.56, indicating a neutral trend. The MACD of 0.45 indicates Negative momentum. The RSI at 57.81 is Neutral, neither overbought nor oversold. The STOCH value of 80.10 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PHM.
PulteGroup Risk Analysis
PulteGroup disclosed 24 risk factors in its most recent earnings report. PulteGroup reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
PulteGroup Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $37.75B | 8.46 | 17.83% | 1.11% | -4.71% | -10.19% | |
78 Outperform | $20.42B | 7.19 | 25.52% | 0.82% | 8.86% | 13.60% | |
77 Outperform | $5.77B | 6.68 | 15.97% | ― | 12.19% | 23.15% | |
75 Outperform | $10.37B | 7.18 | 20.38% | 0.93% | 5.86% | 12.20% | |
74 Outperform | $20.89B | 14.48 | 38.25% | ― | 9.55% | 1.79% | |
67 Neutral | $28.89B | 8.02 | 14.97% | 1.85% | 2.03% | -3.80% | |
61 Neutral | $6.66B | 11.71 | 2.96% | 4.01% | 2.64% | -20.91% |
* Consumer Cyclical Sector Average
Performance Comparison
PHM
PulteGroup
104.46
-11.34
-9.79%
DHI
DR Horton
127.31
-20.13
-13.65%
LEN
Lennar
110.20
-39.52
-26.40%
NVR
NVR
7,124.00
-462.55
-6.10%
TOL
Toll Brothers
104.33
-18.30
-14.92%
TMHC
Taylor Morrison
58.90
1.70
2.97%
PulteGroup Earnings Call Summary
Earnings Call Date:Apr 22, 2025
(Q1-2025)
| % Change Since: 12.19%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
PulteGroup's first quarter results showcased strong financial performance and effective inventory management, despite facing headwinds such as decreased orders, increased incentive rates, and affordability challenges. The company remains confident in its strategic positioning and operational strength, even as it navigates potential impacts from tariffs and volatile market conditions.Q1-2025 Updates
Positive Updates
Strong First Quarter Performance
PulteGroup delivered over 6,500 homes, achieved gross margins of 27.5%, net income of $523 million, and a trailing twelve-month return on equity of 25.4%.
Successful Spec Inventory Reduction
Reduced spec inventory to 47% of production from 53% in the fourth quarter, moving closer to the target range of 40% to 45%.
High-Performing Move-Up and Active Adult Segments
Average spend on options and lot premiums per home climbed to $110,000 in Q1, reflecting strong demand in these segments.
Financial Strength and Share Repurchase
Repurchased 2.8 million shares for $300 million, ending the quarter with $1.9 billion remaining under the share repurchase authorization.
Cycle Time Target Achieved
Reached targeted cycle time of 100 days for single-family homes, indicating effective operational management.
Negative Updates
Decrease in Net New Orders
Net new orders totaled 7,765 homes, a decrease of 7% compared to the first quarter of 2024.
Increased Incentive Rates
Incentive rate increased to 8% for the period, reflecting efforts to reduce excess spec inventory.
Challenges in Affordability
Consumers faced affordability challenges due to high home prices and mortgage payments, exacerbated by concerns about a slowing economy.
Impact of Tariffs
Proposed tariffs have the potential to add thousands of dollars to the cost of construction, affecting future gross margins.
Volatile April Sales
April sales showed more day-to-day volatility than expected, impacted by macroeconomic concerns and consumer confidence.
Company Guidance
During the PulteGroup Inc. Q1 2025 earnings call, the company exceeded its guidance by delivering over 6,500 homes with gross margins of 27.5%, net income totaling $523 million, and a trailing twelve-month return on equity of 25.4%. The call highlighted various metrics such as a 7% decrease in net new orders totaling 7,765 homes, with a 3% increase in average community count to 961. The average sales price of closings increased by 6% to $570,000, although closings dropped by 7% to 6,583 homes. The company also reported a backlog of 11,335 homes, down 16% from the previous year. PulteGroup anticipates delivering between 29,000 and 30,000 homes for the full year, slightly down from prior guidance due to macroeconomic uncertainties, while maintaining strong gross margins. They are also adjusting their land investment to approximately $5 billion in 2025, reflecting a cautious approach to market conditions. Despite the challenges, PulteGroup remains confident in its strategic positioning, especially in serving move-up and active adult buyers, and continues to focus on generating high returns over the housing cycle.PulteGroup Corporate Events
Executive/Board ChangesShareholder Meetings
PulteGroup Board Member J. Phillip Holloman to Step Down
Neutral
Mar 18, 2025
On March 13, 2025, J. Phillip Holloman, a member of PulteGroup’s Board of Directors, announced he would not seek re-election at the company’s annual meeting on April 30, 2025, due to other commitments. His decision was not due to any disagreements with the company, and the board will be reduced from eleven to ten members following his departure.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.