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PulteGroup (PHM) Valuation Check After Earnings Beat And Weaker Backlog Signals

Simply Wall St · 3d ago

PulteGroup (PHM) is back in focus after its latest quarterly report, which paired an earnings beat with softer operating trends, including a year-on-year sales decline, a smaller backlog, and thinner operating margins.

See our latest analysis for PulteGroup.

The mixed Q3 report lands after a choppy few months, with a 1-day share price return of 0.66% and a 30-day share price return decline of 5.61%, while the 1-year total shareholder return of 12.04% and very large 5-year total shareholder return suggest longer term holders have still been rewarded even as near term momentum has cooled.

If PulteGroup’s update has you reassessing housing related ideas, it could be a good moment to scan other US builders and related names through fast growing stocks with high insider ownership.

With the shares up over 12% in the past year but recent returns softer, and with an earnings beat sitting alongside weaker backlog and margins, is PulteGroup quietly undervalued now, or is the market already pricing in future growth?

Most Popular Narrative: 14% Undervalued

Using the most followed narrative, PulteGroup’s fair value of about $139 sits above the last close at $119.86. This suggests a valuation gap that investors will want to understand.

PulteGroup's strategic expansion and strong performance in active adult communities (Del Webb and Del Webb Explorer), which command higher prices and margins, positions the company to benefit from sustained demand among aging but financially strong demographics; this is likely to support both revenue growth and margin expansion, particularly as these communities come online more fully in 2026.

Read the complete narrative.

Curious what kind of revenue mix, margin profile, and earnings multiple are built into that fair value, especially with flat top line assumptions and lower future profitability baked in?

Result: Fair Value of $139.31 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the narrative could be challenged if affordability pressures force heavier incentives that squeeze margins, or if weaker regional demand in areas like the West and Texas continues.

Find out about the key risks to this PulteGroup narrative.

Build Your Own PulteGroup Narrative

If you look at the numbers and come to a different conclusion, or just want to test your own assumptions, you can build a tailored thesis in minutes. Do it your way.

A great starting point for your PulteGroup research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.