10Y annualized return is
excellent
at 18.1% per year
PHM has met or exceeded earnings expectations in
most
recent quarters (9/10)
Low Price-to-Earnings Ratio
Attractive EV/EBITDA Ratio
Strong Return on Equity
Healthy Net Profit Margin
Strong Liquidity Position
Low Debt Levels
🏆 Strong Financial Performance
📈 Efficient Capital Management
🏅 Recognition for Company Culture
🌍 Positive Long-term Housing Outlook
🔄 Strategic Inventory Management
Higher Price-to-Cash Flow Ratio
⚠️ Rising Costs and Affordability Challenges
💔 Affordability Pressures on Homebuyers
PulteGroup demonstrates strong business quality through financial performance, efficient capital management, and a positive workplace culture. Future prospects appear optimistic, driven by a favorable long-term housing outlook and strategic inventory management, although concerns around affordability may pose challenges.
Analysis Date: January 30, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
PulteGroup, Inc. is a company that builds homes in the United States. They buy land, develop it, and then construct different types of houses like single-family homes, townhouses, and condos. They also help people get loans to buy these homes and provide services like title insurance. Overall, PulteGroup focuses on creating neighborhoods where people can live.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Consumer
Competitive Advantages
Key Business Risks
Latest News
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Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$575.41
Current Market Price: $98.93
IV/P Ratio: 5.82x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
83.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for PHM
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (6.77)
P/B ratio ≤ 1.5 (1.72)
Current ratio ≥ 2.0 (11.08x)
Long-term debt < Net current assets (0.15x)
Margin of safety (83.0%)
PHM does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
33.71%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
29.07%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
17.18%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
A return on equity of 27.00% indicates that the company is effectively generating strong profits from its equity base.
With a net profit margin of 17.18%, the company demonstrates effective cost management and profitability in its operations.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.19x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
11.08x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
The current ratio of 11.08 indicates that the company has a strong ability to meet its short-term obligations, suggesting excellent liquidity.
A debt-to-equity ratio of 0.19 and debt-to-assets of 0.13 signify low reliance on debt, indicating a strong balance sheet.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
PulteGroup reported record home sale revenues of $17.3 billion in 2024, a 9% increase from the previous year. The company also achieved industry-leading gross margins of 28.9%, demonstrating strong profitability despite affordability challenges.
The company generated $1.7 billion in cash flow from operations while investing $5.3 billion in new land, maintaining a gross debt-to-capital ratio of only 11.8%. This reflects a strong balance sheet and prudent capital allocation.
PulteGroup was named to Fortune's Top 100 Best Companies to Work For in 2024, indicating a strong corporate culture that can attract and retain talent.
The company faces increasing land costs, projected at a 10% increase year-over-year, and rising construction costs, which could pressure margins and affordability for homebuyers.
The management expressed confidence in the long-term demand for new homes, citing a strong economy, employment stability, and structural housing shortages as positive indicators for growth.
PulteGroup plans to maintain a flexible production strategy aligned with demand, aiming for a spec inventory of 40-45%. This adaptability positions the company to react effectively to market conditions.
The increase in mortgage rates and high living costs are impacting first-time buyers, which could lead to lower activity levels in the housing market.