Company Overview
PulteGroup, Inc. engages in the homebuilding business within the United States, involving the acquisition and development of land primarily for residential purposes, as well as the construction of housing and the sale of single-family detached and attached homes. This operational model places the company squarely within the Consumer Cyclical sector and the Residential Construction industry, meaning its financial performance is directly correlated with consumer spending patterns and housing market demand. The entity operates at a significant scale, evidenced by a market capitalization of $22.03B, annual revenue of $17.31B, and an employee count of 6506. These aggregate figures indicate that PulteGroup is a substantial market participant with a dominant presence in the residential construction landscape, reflecting its capacity to execute large-scale development projects and maintain a robust operational footprint across the nation.
Financial Health
The company reported revenue of $17.31B and net income of $2.22B over the trailing twelve months, while generating EBITDA of $3.19B. The gap between the revenue figure and the net income figure reveals a cost structure where approximately 87.2% of revenue is consumed by expenses before reaching the bottom line, highlighting the capital-intensive nature of the homebuilding business. Free cash flow stands at $1.50B, which signifies the company's ability to generate cash after capital expenditures, providing substantial financial flexibility for debt servicing, dividend payments, or potential strategic acquisitions. Profitability is further detailed by three specific margin metrics: a gross margin of 26.9%, an operating margin of 18.0%, and a profit margin of 12.8%, indicating that for every dollar of sales, the company retains $0.269 in gross profit, $0.180 in operating profit, and $0.128 in net profit. On the balance sheet, total cash of $1.98B is compared against total debt of $2.40B, with a debt-to-equity ratio of 18.45, suggesting a leveraged balance sheet where debt obligations exceed cash reserves but are supported by equity. Liquidity is assessed through a current ratio of 7.55, which indicates a highly conservative short-term liquidity position where current assets significantly exceed current liabilities. Management effectiveness is quantified by a return on equity of 17.7% and a return on assets of 10.9%, metrics that demonstrate the company generates high returns on the capital invested by shareholders and efficiently utilizes its asset base to produce earnings.
Valuation Assessment
Valuation multiples include a trailing P/E ratio of 10.31 and a forward P/E of 10.15, implying that the market expects earnings to stabilize or grow slightly, as the forward multiple is marginally lower than the trailing multiple. The price-to-book ratio is 1.70, indicating that the market values the company at a 70% premium over its tangible book value, which reflects investor confidence in the brand and future growth potential beyond asset liquidation. Alternative valuation metrics show a price-to-sales ratio of 1.27 and an EV/EBITDA of 7.04, suggesting the company trades at a reasonable multiple relative to its sales and enterprise value-adjusted earnings compared to historical averages. Price momentum is defined by a 52-week high of $144.50 and a 52-week low of $88.07, and without a specific current share price provided in the facts, the valuation range is strictly bounded by these historical extremes. The beta value is 1.30, meaning the stock exhibits 30% higher volatility than the broader market, indicating that price movements in PulteGroup will be more pronounced than average market fluctuations during periods of stability or turbulence.
Growth & Income
Recent performance data shows revenue growth of -6.3% and earnings growth of -42.1% year over year, indicating that earnings are contracting at a significantly faster rate than revenue, which points to potential headwinds in operating leverage or margin compression. The company functions as a dividend payer with a yield of 0.9% and a payout ratio of 8.3%, where the low payout ratio relative to earnings suggests that the dividend is highly sustainable even during periods of declining earnings. Given the current earnings contraction, the company retains the majority of its profits rather than distributing them, allowing for capital retention while maintaining a modest dividend stream. The overall growth and income profile is characterized by a cyclical downturn in earnings growth paired with a conservative, low-yield dividend strategy that prioritizes financial stability over aggressive income distribution.