PulteGroup (PHM) AI Stock Analysis

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PulteGroup

(NYSE:PHM)

Rating:79Outperform

Price Target:

$118.00

▲(17.33%Upside)

PulteGroup's strong financial health and attractive valuation underpin a solid stock score. Technical indicators show stable momentum, while the earnings call supports confidence in strategic positioning despite some challenges. These factors collectively contribute to a robust overall score.

Positive Factors

Earnings

PulteGroup reported 1Q earnings ahead of our forecast.

Financial Performance

PHM has attractive return-on-equity and capital return relative to other builders.

Strategic Initiatives

PulteGroup's shift to more land options contracts could improve its returns over the next five years.

Negative Factors

Guidance

PHM lowered 2025 deliveries guide to 29k-30k, down (6%) YoY at the midpoint.

Market Segment Performance

First-time buyer orders declined by 14% and active adult declined by 1%.

Orders

PHM orders of 7.8K were down (7%) YoY and below normal seasonality.

PulteGroup (PHM) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$19.68B

Dividend Yield0.85%

Average Volume (3M)1.92M

Price to Earnings (P/E)6.9

Beta (1Y)0.91

Revenue Growth8.86%

EPS Growth13.60%

CountryUS

Employees6,793

SectorConsumer Cyclical

Sector Strength73

IndustryResidential Construction

Share Statistics

EPS (TTM)2.57

Shares Outstanding200,427,190

10 Day Avg. Volume1,865,537

30 Day Avg. Volume1,919,851

Financial Highlights & Ratios

PEG Ratio-1.93

Price to Book (P/B)1.68

Price to Sales (P/S)0.00

P/FCF Ratio14.15

Enterprise Value/Market Cap1.08

Enterprise Value/Revenue0.31

Enterprise Value/Gross Profit4.09

Enterprise Value/Ebitda1.38

Forecast

1Y Price Target

$123.27

Price Target Upside22.57% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering12

PulteGroup Business Overview & Revenue Model

Company DescriptionPulteGroup, Inc. is one of the largest homebuilders in the United States, operating across various segments of the residential housing market. The company is primarily involved in the development and sale of single-family detached homes, townhouses, condominiums, and duplexes, catering to a wide range of buyers including first-time, move-up, and active adult buyers. PulteGroup operates under several brand names, including Pulte Homes, Centex, and Del Webb, each targeting different customer demographics and needs.

How the Company Makes MoneyPulteGroup makes money through the construction and sale of residential homes across the United States. The company's primary revenue stream comes from the sale of homes, which involves purchasing land, developing communities, and constructing homes to sell to consumers. Revenue is also generated through financial services, where PulteGroup offers mortgage financing solutions to its buyers, helping facilitate the home purchase process. Key factors contributing to its earnings include strategic land acquisitions, effective cost management, and maintaining a diverse range of product offerings to appeal to various market segments. The company may also benefit from partnerships with suppliers and contractors to optimize its supply chain and reduce construction costs.

PulteGroup Key Performance Indicators (KPIs)

Any

Closing Units by Geography

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.

Chart InsightsPulteGroup's closing units show varied regional dynamics, with the Southeast and Florida maintaining strong performance, while Texas and the Midwest face challenges. Despite a 9% increase in overall home deliveries in 2024, the company anticipates flat volume growth in 2025 due to affordability challenges and increased buyer incentives. The earnings call highlights strategic land investments and shareholder returns, but rising land costs and higher speculative inventory pose risks. Investors should note the company's confidence in long-term demand, despite a competitive market environment.

Data provided by:

Main Street Data

PulteGroup Earnings Call Summary

Earnings Call Date:Apr 22, 2025

(Q1-2025)

% Change Since: 8.01%|

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 Financial Statement Overview

Summary

PulteGroup demonstrates strong financial health with high profitability, efficient operations, and solid shareholder returns. Challenges exist in revenue growth and free cash flow sustainability, but low leverage and a strong equity position offer resilience.

Income Statement

Very Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
17.89B	17.95B	16.06B	16.23B	13.93B	11.04B
	Gross Profit
5.22B	5.22B	4.72B	4.83B	3.78B	2.78B
	EBIT
3.86B	3.90B	3.43B	3.45B	2.64B	1.79B
	EBITDA
3.96B	4.10B	3.53B	3.52B	2.63B	1.83B
	Net Income Common Stockholders
2.94B	3.08B	2.60B	2.62B	1.95B	1.41B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.24B	2.24B	2.32B	1.05B	1.78B	2.58B
	Total Assets
17.36B	17.36B	16.09B	14.80B	13.35B	12.21B
	Total Debt
2.25B	2.25B	2.55B	2.63B	2.66B	3.16B
	Net Debt
641.19M	641.19M	746.82M	1.58B	876.08M	581.92M
	Total Liabilities
5.24B	5.24B	5.70B	5.88B	5.86B	5.64B
	Stockholders Equity
12.12B	12.12B	10.38B	8.91B	7.49B	6.57B
Cash Flow		Free Cash Flow
1.45B	1.56B	2.10B	555.80M	931.24M	1.73B
	Operating Cash Flow
1.58B	1.68B	2.20B	668.47M	1.00B	1.78B
	Investing Cash Flow
-107.40M	-94.48M	-129.09M	-171.74M	-124.13M	-107.95M
	Financing Cash Flow
-1.96B	-1.78B	-1.31B	-1.24B	-1.68B	-295.62M

PulteGroup Technical Analysis

Technical Analysis Sentiment

Negative

Last Price100.57

Price Trends

50DMA

101.04

Negative

100DMA

104.83

Negative

200DMA

117.68

Negative

Market Momentum

MACD

-0.28

Positive

RSI

48.19

Neutral

STOCH

20.35

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PHM, the sentiment is Negative. The current price of 100.57 is below the 20-day moving average (MA) of 102.27, below the 50-day MA of 101.04, and below the 200-day MA of 117.68, indicating a bearish trend. The MACD of -0.28 indicates Positive momentum. The RSI at 48.19 is Neutral, neither overbought nor oversold. The STOCH value of 20.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 2 New Risks

We are implementing a new enterprise resource planning system, and challenges with the implementation of the system may impact our business and operations. Q4, 2024

An inability to accurately predict customer preferences or demand, or to respond effectively to technological developments, including artificial intelligence, could materially impact the business. Q4, 2024

PulteGroup Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TOL	84 Outperform	$10.73B	8.01	18.09%	0.90%	1.59%	-8.04%
PHM	79 Outperform	$19.68B	6.93	25.52%	0.85%	8.86%	13.60%
TMHC	78 Outperform	$5.84B	6.77	15.97%	―	12.19%	23.15%
DHI	76 Outperform	$37.32B	9.19	17.83%	1.18%	-4.71%	-10.19%
NVR	73 Outperform	$20.66B	14.54	38.25%	―	8.81%	1.79%
LEN	67 Neutral	$28.37B	7.87	14.97%	1.90%	2.03%	-3.80%
Sector *	62 Neutral	$6.84B	11.23	3.09%	3.95%	2.66%	-25.23%

* Consumer Cyclical Sector Average

Performance Comparison

PHM

PulteGroup

100.57

-11.16

-9.99%

DHI

DR Horton

121.48

-18.91

-13.47%

LEN

Lennar

108.09

-37.81

-25.92%

NVR

7,210.65

-124.61

-1.70%

TOL

Toll Brothers

107.93

-9.61

-8.18%

TMHC

Taylor Morrison

58.23

2.03

3.61%

PulteGroup Corporate Events

Shareholder MeetingsBusiness Operations and Strategy

PulteGroup Adopts New Amended By-Laws

Neutral

May 6, 2025

On May 1, 2025, PulteGroup‘s Board of Directors adopted new Amended and Restated By-Laws, which include removing restrictions on securities transfers to prevent ownership changes and updating shareholder procedural requirements. The company also held its 2025 Annual Meeting of Shareholders on April 30, 2025, where all ten director nominees were elected, Ernst & Young LLP’s appointment as the independent auditor was ratified, executive compensation was approved, but shareholder proposals on clawback policy and emission reduction goals were not passed.

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.