NYSE:PHM is probably undervalued for the fundamentals it is displaying.

Last update: Nov 7, 2024

Uncover the potential of PULTEGROUP INC (NYSE:PHM) as our stock screener's choice for an undervalued stock. NYSE:PHM maintains a strong financial position and offers an appealing valuation. We'll delve into the specifics below.

Evaluating Valuation: NYSE:PHM

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:PHM has achieved a 8 out of 10:

A Price/Earnings ratio of 9.67 indicates a reasonable valuation of PHM.
Compared to the rest of the industry, the Price/Earnings ratio of PHM indicates a somewhat cheap valuation: PHM is cheaper than 74.19% 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 28.76.
A Price/Forward Earnings ratio of 9.42 indicates a reasonable valuation of PHM.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PHM indicates a somewhat cheap valuation: PHM is cheaper than 77.42% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.90, PHM is valued rather cheaply.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PHM indicates a rather cheap valuation: PHM is cheaper than 82.26% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, PHM is valued a bit cheaper than the industry average as 62.90% of the companies are valued more expensively.
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.

Looking at the Profitability

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:PHM was assigned a score of 9 for profitability:

PHM has a Return On Assets of 16.98%. This is amongst the best in the industry. PHM outperforms 96.77% of its industry peers.
PHM has a better Return On Equity (24.89%) than 87.10% of its industry peers.
PHM has a Return On Invested Capital of 19.79%. This is amongst the best in the industry. PHM outperforms 96.77% of its industry peers.
PHM had an Average Return On Invested Capital over the past 3 years of 18.34%. This is significantly above the industry average of 10.87%.
The 3 year average ROIC (18.34%) for PHM is below the current ROIC(19.79%), indicating increased profibility in the last year.
With an excellent Profit Margin value of 16.62%, PHM belongs to the best of the industry, outperforming 93.55% of the companies in the same industry.
In the last couple of years the Profit Margin of PHM has grown nicely.
With an excellent Operating Margin value of 21.28%, PHM belongs to the best of the industry, outperforming 95.16% of the companies in the same industry.
PHM's Operating Margin has improved in the last couple of years.
PHM's Gross Margin has improved in the last couple of years.

Assessing Health Metrics for NYSE:PHM

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:PHM was assigned a score of 8 for health:

An Altman-Z score of 6.15 indicates that PHM is not in any danger for bankruptcy at the moment.
The Altman-Z score of PHM (6.15) is better than 85.48% of its industry peers.
PHM has a debt to FCF ratio of 1.67. This is a very positive value and a sign of high solvency as it would only need 1.67 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.67, PHM is in the better half of the industry, outperforming 74.19% of the companies in the same industry.
A Debt/Equity ratio of 0.19 indicates that PHM is not too dependend on debt financing.
PHM has a better Debt to Equity ratio (0.19) than 67.74% of its industry peers.
A Current Ratio of 4.17 indicates that PHM has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 4.17, PHM is in the better half of the industry, outperforming 69.35% 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.

Understanding NYSE:PHM's Growth Score

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 5 out of 10:

The Earnings Per Share has grown by an nice 12.36% over the past year.
The Earnings Per Share has been growing by 25.08% on average over the past years. This is a very strong growth
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 9.18% on average per year.

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

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.