NYSE:PHM: good value for what you're paying.

Last update: Nov 7, 2023

Uncover the hidden value in PULTEGROUP INC (NYSE:PHM) as our stock screening tool recommends it as an undervalued choice. NYSE:PHM maintains a robust financial position and offers an attractive pricing perspective. Let's dig deeper into the analysis.

Evaluating Valuation: NYSE:PHM

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NYSE:PHM scores a 8 out of 10:

With a Price/Earnings ratio of 6.88, the valuation of PHM can be described as very cheap.
PHM's Price/Earnings ratio is rather cheap when compared to the industry. PHM is cheaper than 82.09% of the companies in the same industry.
When comparing the Price/Earnings ratio of PHM to the average of the S&P500 Index (23.48), we can say PHM is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 6.91, the valuation of PHM can be described as very cheap.
Based on the Price/Forward Earnings ratio, PHM is valued a bit cheaper than the industry average as 76.12% of the companies are valued more expensively.
PHM is valuated cheaply when we compare the Price/Forward Earnings ratio to 18.84, which is the current average of the S&P500 Index.
88.06% of the companies in the same industry are more expensive than PHM, based on the Enterprise Value to EBITDA ratio.
74.63% of the companies in the same industry are more expensive than PHM, based on the Price/Free Cash Flow ratio.
PHM's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of PHM may justify a higher PE ratio.

A Closer Look at Profitability for NYSE:PHM

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:PHM scores a 9 out of 10:

With an excellent Return On Assets value of 17.57%, PHM belongs to the best of the industry, outperforming 97.01% of the companies in the same industry.
PHM has a better Return On Equity (27.58%) than 91.04% of its industry peers.
PHM has a better Return On Invested Capital (21.76%) than 97.01% of its industry peers.
PHM had an Average Return On Invested Capital over the past 3 years of 16.67%. This is significantly above the industry average of 11.17%.
The 3 year average ROIC (16.67%) for PHM is below the current ROIC(21.76%), indicating increased profibility in the last year.
Looking at the Profit Margin, with a value of 16.30%, PHM belongs to the top of the industry, outperforming 97.01% of the companies in the same industry.
PHM's Profit Margin has improved in the last couple of years.
PHM has a better Operating Margin (21.32%) than 98.51% of its industry peers.
In the last couple of years the Operating Margin of PHM has grown nicely.
In the last couple of years the Gross Margin of PHM has grown nicely.

Evaluating Health: NYSE:PHM

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:PHM scores a 8 out of 10:

PHM has an Altman-Z score of 5.09. This indicates that PHM is financially healthy and has little risk of bankruptcy at the moment.
PHM has a better Altman-Z score (5.09) than 86.57% of its industry peers.
PHM has a debt to FCF ratio of 0.86. This is a very positive value and a sign of high solvency as it would only need 0.86 years to pay back of all of its debts.
PHM's Debt to FCF ratio of 0.86 is fine compared to the rest of the industry. PHM outperforms 76.12% of its industry peers.
A Debt/Equity ratio of 0.24 indicates that PHM is not too dependend on debt financing.
A Current Ratio of 3.96 indicates that PHM has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 3.96, PHM is in the better half of the industry, outperforming 70.15% of the companies in the same industry.
PHM does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Evaluating Growth: NYSE:PHM

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:PHM has achieved a 5 out of 10:

PHM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 21.82%, which is quite impressive.
The Earnings Per Share has been growing by 37.18% on average over the past years. This is a very strong growth
The Revenue has been growing by 13.61% on average over the past years. This is quite good.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Check the latest full fundamental report of PHM for a complete fundamental analysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.