When you look at NYSE:PHM, it's hard to ignore the strong fundamentals, especially considering its likely undervaluation.

Last update: Dec 21, 2023

PULTEGROUP INC (NYSE:PHM) is a hidden gem identified by our stock screening tool, featuring undervaluation and robust fundamentals. NYSE:PHM showcases decent financial health and profitability, coupled with an attractive price. Let's dig deeper into the analysis.

Understanding NYSE:PHM's Valuation Score

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:

PHM is valuated reasonably with a Price/Earnings ratio of 8.59.
Compared to the rest of the industry, the Price/Earnings ratio of PHM indicates a rather cheap valuation: PHM is cheaper than 82.61% of the companies listed in the same industry.
PHM's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.30.
PHM is valuated reasonably with a Price/Forward Earnings ratio of 8.85.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PHM indicates a rather cheap valuation: PHM is cheaper than 84.06% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of PHM to the average of the S&P500 Index (20.92), we can say PHM is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, PHM is valued cheaper than 85.51% of the companies in the same industry.
PHM's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PHM is cheaper than 63.77% of the companies in the same industry.
PHM has an outstanding profitability rating, which may justify a higher PE ratio.

Understanding NYSE:PHM's Profitability

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:

PHM has a better Return On Assets (17.57%) than 97.10% of its industry peers.
The Return On Equity of PHM (27.58%) is better than 91.30% of its industry peers.
The Return On Invested Capital of PHM (21.76%) is better than 98.55% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PHM is significantly above the industry average of 10.44%.
The last Return On Invested Capital (21.76%) for PHM is above the 3 year average (16.67%), which is a sign of increasing profitability.
PHM's Profit Margin of 16.30% is amongst the best of the industry. PHM outperforms 94.20% of its industry peers.
PHM's Profit Margin has improved in the last couple of years.
PHM's Operating Margin of 21.32% is amongst the best of the industry. PHM outperforms 98.55% of its industry peers.
PHM's Operating Margin has improved in the last couple of years.
PHM has a better Gross Margin (29.33%) than 62.32% of its industry peers.
In the last couple of years the Gross Margin of PHM has grown nicely.

Health Analysis for NYSE:PHM

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:PHM has earned a 8 out of 10:

PHM has an Altman-Z score of 5.51. This indicates that PHM is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 5.51, PHM belongs to the best of the industry, outperforming 88.41% of the companies in the same industry.
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.
The Debt to FCF ratio of PHM (0.86) is better than 75.36% of its industry peers.
PHM has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.
PHM has a Current Ratio of 3.96. This indicates that PHM is financially healthy and has no problem in meeting its short term obligations.
PHM has a better Current ratio (3.96) than 71.01% of its industry peers.
The current and quick ratio evaluation for PHM is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Unpacking NYSE:PHM's Growth Rating

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:PHM has received 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
PHM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 13.61% yearly.

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.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.