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Pultegroup (PHM)
NYSE:PHM
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PulteGroup
(NYSE:PHM)
Select Model
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Rating:70Outperform
Price Target:
$145.00
▲(17.73% Upside)
PulteGroup's strong financial performance and attractive valuation are key strengths, supporting a solid stock score. However, technical indicators suggest potential bearish momentum, and challenges highlighted in the earnings call, such as declining net new orders, pose risks. The company's strategic initiatives and market adaptability will be crucial in navigating these challenges.
Positive Factors
Active Adult Segment Growth
Growth in the active adult segment indicates strong demand and potential for sustained revenue in a niche market, enhancing long-term stability.
Efficient Production Cycle
A shorter build cycle improves inventory management and responsiveness to market demand, supporting operational efficiency and profitability.
Dividend Increase
An increased dividend reflects confidence in cash flow stability and commitment to returning value to shareholders, strengthening investor trust.
Negative Factors
Decline in Net New Orders
A decline in net new orders suggests potential challenges in maintaining sales momentum, impacting future revenue growth.
Higher Incentives and Costs
Rising incentives and costs can compress margins, reducing profitability and potentially affecting long-term financial health.
Backlog and Spec Home Inventory
A declining backlog and high spec home inventory indicate potential sales challenges, affecting future revenue and cash flow predictability.
PulteGroup (PHM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$25.77B
Dividend Yield0.78%
Average Volume (3M)1.59M
Price to Earnings (P/E)10.2
Beta (1Y)0.75
Revenue Growth1.76%
EPS Growth-4.24%
CountryUS
Employees6,793
SectorConsumer Cyclical
Sector Strength84
IndustryResidential Construction
Share Statistics
EPS (TTM)2.96
Shares Outstanding194,916,870
10 Day Avg. Volume1,292,526
30 Day Avg. Volume1,588,436
Financial Highlights & Ratios
PEG Ratio0.29
Price to Book (P/B)1.87
Price to Sales (P/S)1.26
P/FCF Ratio14.51
Enterprise Value/Market Cap1.03
Enterprise Value/Revenue1.51
Enterprise Value/Gross Profit5.48
Enterprise Value/Ebitda7.50
Forecast
1Y Price Target
$138.73Price Target Upside12.64% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
PulteGroup Business Overview & Revenue Model
Company DescriptionPulteGroup, Inc., through its subsidiaries, primarily engages in the homebuilding business in the United States. It acquires and develops land primarily for residential purposes; and constructs housing on such land. The company also offers various home designs, including single-family detached, townhomes, condominiums, and duplexes under the Centex, Pulte Homes, Del Webb, DiVosta Homes, American West, and John Wieland Homes and Neighborhoods brand names. As of December 31, 2021, it controlled 228,296 lots, of which 109,078 were owned and 119,218 were under land option agreements. In addition, the company arranges financing through the origination of mortgage loans primarily for homebuyers; sells the servicing rights for the originated loans; and provides title insurance policies, and examination and closing services to homebuyers. PulteGroup, Inc. was formerly known as Pulte Homes, Inc. and changed its name to PulteGroup, Inc. in March 2010. The company was founded in 1950 and is headquartered in Atlanta, Georgia.
How the Company Makes MoneyPulteGroup generates revenue primarily through the sale of newly constructed homes, which constitute the bulk of its income. The company earns money by building and selling homes to individual buyers or through contracts with real estate developers and investors. Key revenue streams include the sale of completed homes, homebuilding-related services, and land development. Additionally, PulteGroup benefits from partnerships with various suppliers and contractors for materials and construction services, which can enhance operational efficiency and cost management. The company's financial performance is also influenced by market demand, interest rates, and trends in the housing market, which affect overall sales volumes and pricing.
PulteGroup Key Performance Indicators (KPIs)
Any
Closing Units by Geography
Shows the number of homes closed in different regions, highlighting areas of strong sales performance and potential market dominance.
Shows the number of homes closed in different regions, highlighting areas of strong sales performance and potential market dominance.
Data provided by:
The Fly
The FlyPulteGroup Earnings Call Summary
Earnings Call Date:Oct 21, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Jan 29, 2026
Earnings Call Sentiment Neutral
While PulteGroup demonstrated strong financial performance and growth in the active adult segment, challenges such as a decline in net new orders, higher incentives, and a softer market in certain regions indicate a balanced outlook. The company remains optimistic about future opportunities despite current headwinds.Q3-2025 Updates
Positive Updates
Strong Financial Performance
PulteGroup generated third quarter home sale revenues of $4.2 billion, operating margins of 16.8%, and earnings of $2.96 per share. The company delivered a return on equity of 21% for the trailing 12 months.
Active Adult Segment Growth
Net new orders in the active adult business increased 7% over Q3 of last year, benefiting from both an increase in community count and absorption pace.
Efficient Production Cycle
The average build cycle is now down to just 106 days, allowing for less inventory while being responsive to demand.
Land Pipeline and Investment
PulteGroup invested $1.3 billion in land acquisition and development in Q3, maintaining a healthy pipeline of 240,000 lots under control.
Negative Updates
Decline in Net New Orders
Net new orders totaled 6,638 homes, which is 6% lower than the third quarter of last year, reflecting a 10% decrease in absorption pace.
Challenging Market Conditions
Weaker consumer confidence and stretched affordability are limiting opportunities with first-time buyers. Demand in Texas and Western markets remained soft.
Higher Incentives and Costs
Incentives were 8.9% of gross sales price, up from 7.0% last year, impacting gross margins. The Q3 gross margin was 26.2%, down 80 basis points from Q2.
Backlog and Spec Home Inventory
The backlog decreased to 9,888 homes valued at $6.2 billion, down from 12,089 homes valued at $7.7 billion last year. Spec homes made up 49% of production, higher than the target range of 40% to 45%.
Company Guidance
In the third quarter of 2025, PulteGroup reported strong financial results, closing over 7,500 homes and generating home sale revenues of $4.2 billion, operating margins of 16.8%, and earnings of $2.96 per share. The company achieved a return on equity of 21% over the last 12 months, reflecting the strength of its diversified operating model across 47 major markets. Despite challenges in the first-time buyer segment due to weaker consumer confidence and stretched affordability, demand within the active adult segment remained resilient. PulteGroup's Q3 absorption rate was 2.2 homes per month, down from 2.4 the previous year, and net new orders totaled 6,638 homes, a 6% decrease year-over-year. The company started 6,557 homes in the third quarter, aiming to align production with sales volumes. PulteGroup ended the quarter with a backlog of 9,888 homes valued at $6.2 billion and expects to close 7,200 to 7,600 homes in the fourth quarter. The company invested $1.3 billion in land acquisition and development during the quarter and repurchased 2.4 million shares for $300 million.PulteGroup Financial Statement Overview
Summary
PulteGroup shows strong profitability and financial stability with efficient use of equity and manageable debt levels. However, the decline in revenue and free cash flow growth poses potential risks, necessitating a focus on revenue generation and cash flow management.Income Statement
PulteGroup's income statement shows strong profitability with a consistent gross profit margin around 27-29% over the years. However, the TTM data indicates a decline in revenue growth rate by 40.4%, which is a concern. Despite this, the company maintains healthy net and EBIT margins, reflecting operational efficiency.Balance Sheet
The balance sheet is robust with a low debt-to-equity ratio, indicating prudent financial management. The return on equity remains strong, showcasing effective use of shareholders' funds. The equity ratio is stable, suggesting a solid financial foundation.Cash Flow
Cash flow analysis reveals a significant decline in free cash flow growth in the TTM period, which could impact liquidity. However, the company maintains a reasonable free cash flow to net income ratio, indicating that it generates sufficient cash relative to its earnings.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 17.62B | 17.95B | 16.06B | 16.00B | 13.74B | 11.04B |
| Gross Profit | 4.84B | 5.22B | 4.72B | 4.83B | 3.78B | 2.78B |
| EBITDA | 3.54B | 4.10B | 3.53B | 3.51B | 2.58B | 1.80B |
| Net Income | 2.63B | 3.08B | 2.60B | 2.62B | 1.95B | 1.41B |
Balance Sheet | ||||||
| Total Assets | 17.85B | 17.36B | 16.09B | 14.80B | 13.35B | 12.21B |
| Cash, Cash Equivalents and Short-Term Investments | 1.94B | 2.24B | 2.32B | 1.73B | 2.73B | 3.15B |
| Total Debt | 2.03B | 2.25B | 2.55B | 2.72B | 2.75B | 3.27B |
| Total Liabilities | 5.02B | 5.24B | 5.70B | 5.88B | 5.86B | 5.64B |
| Stockholders Equity | 12.83B | 12.12B | 10.38B | 8.91B | 7.49B | 6.57B |
Cash Flow | ||||||
| Free Cash Flow | 1.55B | 1.56B | 2.10B | 555.80M | 931.24M | 1.73B |
| Operating Cash Flow | 1.67B | 1.68B | 2.20B | 668.47M | 1.00B | 1.78B |
| Investing Cash Flow | -50.23M | -94.48M | -129.09M | -171.74M | -124.13M | -107.95M |
| Financing Cash Flow | -1.59B | -1.78B | -1.31B | -1.24B | -1.68B | -295.62M |
PulteGroup Technical Analysis
Positive
123.16
Price Trends
121.31
Positive
125.46
Positive
115.58
Positive
Market Momentum
0.19
Negative
67.04
Neutral
67.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PHM, the sentiment is Positive. The current price of 123.16 is above the 20-day moving average (MA) of 121.51, above the 50-day MA of 121.31, and above the 200-day MA of 115.58, indicating a bullish trend. The MACD of 0.19 indicates Negative momentum. The RSI at 67.04 is Neutral, neither overbought nor oversold. The STOCH value of 67.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $13.81B | 10.77 | 16.89% | 0.70% | 1.11% | -10.03% | |
71 Outperform | $6.39B | 7.81 | 14.31% | ― | 6.98% | 9.74% | |
70 Outperform | $25.77B | 10.18 | 21.57% | 0.78% | 1.76% | -4.24% | |
70 Outperform | $21.53B | 16.66 | 34.80% | ― | 3.61% | -6.94% | |
66 Neutral | $45.94B | 13.60 | 14.48% | 1.14% | -6.93% | -19.41% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | $30.07B | 14.94 | 8.28% | 1.91% | -3.78% | -44.21% |
* Consumer Cyclical Sector Average
PHM
PulteGroup
123.16
11.55
10.35%
DHI
DR Horton
145.90
4.42
3.12%
LEN
Lennar
109.55
-18.17
-14.23%
NVR
NVR
7,385.58
-758.06
-9.31%
TOL
Toll Brothers
135.56
5.53
4.26%
TMHC
Taylor Morrison
60.73
-2.58
-4.08%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.