Investment Thesis
PulteGroup demonstrates solid operational profitability with a 12.8% net margin and strong return metrics (ROE 17.1%, ROA 12.3%), but faces concerning headwinds with revenue declining 3.5% YoY and net income falling 28% YoY. The company maintains fortress balance sheet strength with minimal debt (0.00x D/E ratio) and generates healthy free cash flow of $1.7B, providing financial flexibility despite near-term cyclical pressures.
PHM Strengths
- Exceptional balance sheet with $13.0B equity, only $43.9M long-term debt, and $2.0B cash providing substantial financial cushion
- Strong free cash flow generation of $1.7B (10.1% FCF margin) enabling capital flexibility and shareholder returns
- Healthy profitability with 12.8% net margin and double-digit ROE (17.1%) and ROA (12.3%) returns
- Exceptional interest coverage ratio of 991.6x indicates zero financial distress risk
PHM Risks
- Significant revenue contraction of 3.5% YoY signals deteriorating top-line growth and potential demand weakness in homebuilding sector
- Sharp net income decline of 28% YoY despite relatively stable operating margins suggests margin compression or elevated costs
- Concentrated exposure to cyclical residential construction industry vulnerable to interest rate, economic, and housing market cycles
- EPS decline of 24.3% YoY indicates earnings leverage on top-line declines
Key Metrics to Watch
- Revenue growth trajectory and new order trends (currently negative)
- Gross margin stability and cost management amid declining volumes
- Free cash flow sustainability and conversion rates
- Debt levels if acquisition activity or operational challenges increase
PHM Financial Metrics
PHM Profitability Ratios
PHM Balance Sheet & Liquidity
PHM 5-Year Financial Trend
5-Year Trend Summary: PULTEGROUP INC/MI/'s revenue has grown significantly by 29% over the 5-year period, indicating strong business expansion. The most recent EPS of $11.72 reflects profitable operations.
PHM Growth Metrics (YoY)
PHM Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $4.4B | $585.8M | $2.96 |
| Q2 2025 | $4.4B | $608.5M | $3.03 |
| Q1 2025 | $3.9B | $522.8M | $2.57 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
PHM Capital Allocation
PHM SEC Filings
Access official SEC EDGAR filings for PULTEGROUP INC/MI/ (CIK: 0000822416)