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

Last update: Jul 9, 2024

Our stock screener has singled out PULTEGROUP INC (NYSE:PHM) as a stellar value proposition. NYSE:PHM not only scores well in profitability, solvency, and liquidity but also maintains a very reasonable price point. We'll explore this further.

Evaluating Valuation: NYSE:PHM

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:PHM has earned a 8 for valuation:

The Price/Earnings ratio is 8.66, which indicates a very decent valuation of PHM.
Based on the Price/Earnings ratio, PHM is valued a bit cheaper than 73.85% of the companies in the same industry.
When comparing the Price/Earnings ratio of PHM to the average of the S&P500 Index (28.45), we can say PHM is valued rather cheaply.
The Price/Forward Earnings ratio is 7.71, which indicates a rather cheap valuation of PHM.
78.46% of the companies in the same industry are more expensive than PHM, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 20.21. PHM is valued rather cheaply when compared to this.
84.62% of the companies in the same industry are more expensive than PHM, based on the Enterprise Value to EBITDA ratio.
PHM's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PHM is cheaper than 63.08% of the companies in the same industry.
PHM's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
PHM has an outstanding profitability rating, which may justify a higher PE ratio.

Understanding NYSE:PHM's Profitability

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:PHM, the assigned 9 is a significant indicator of profitability:

Looking at the Return On Assets, with a value of 16.52%, PHM belongs to the top of the industry, outperforming 96.92% of the companies in the same industry.
Looking at the Return On Equity, with a value of 25.33%, PHM belongs to the top of the industry, outperforming 90.77% of the companies in the same industry.
With an excellent Return On Invested Capital value of 19.66%, PHM belongs to the best of the industry, outperforming 98.46% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for PHM is significantly above the industry average of 10.05%.
The 3 year average ROIC (18.34%) for PHM is below the current ROIC(19.66%), indicating increased profibility in the last year.
PHM's Profit Margin of 16.59% is amongst the best of the industry. PHM outperforms 90.77% of its industry peers.
PHM's Profit Margin has improved in the last couple of years.
PHM has a Operating Margin of 21.45%. This is amongst the best in the industry. PHM outperforms 96.92% 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.

Analyzing Health Metrics

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 5.40. This indicates that PHM is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of PHM (5.40) is better than 83.08% of its industry peers.
The Debt to FCF ratio of PHM is 1.53, which is an excellent value as it means it would take PHM, only 1.53 years of fcf income to pay off all of its debts.
PHM's Debt to FCF ratio of 1.53 is fine compared to the rest of the industry. PHM outperforms 75.38% of its industry peers.
A Debt/Equity ratio of 0.23 indicates that PHM is not too dependend on debt financing.
PHM has a better Debt to Equity ratio (0.23) than 64.62% of its industry peers.
PHM has a Current Ratio of 4.02. This indicates that PHM is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of PHM (4.02) is better than 70.77% of its industry peers.
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.

Exploring NYSE:PHM's Growth

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NYSE:PHM scores a 4 out of 10:

PHM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 25.08% yearly.
The Revenue has been growing by 9.53% on average over the past years. This is quite good.
Based on estimates for the next years, PHM will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.00% on average per year.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

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.