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

Last update: Jan 13, 2025

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

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:PHM boasts a 8 out of 10:

Based on the Price/Earnings ratio of 8.05, the valuation of PHM can be described as reasonable.
78.46% of the companies in the same industry are more expensive than PHM, based on the Price/Earnings ratio.
PHM is valuated cheaply when we compare the Price/Earnings ratio to 26.91, which is the current average of the S&P500 Index.
PHM is valuated cheaply with a Price/Forward Earnings ratio of 7.92.
Based on the Price/Forward Earnings ratio, PHM is valued a bit cheaper than the industry average as 70.77% of the companies are valued more expensively.
PHM is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.26, which is the current average of the S&P500 Index.
Based on the Enterprise Value to EBITDA ratio, PHM is valued cheaply inside the industry as 84.62% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PHM indicates a somewhat cheap valuation: PHM is cheaper than 64.62% of the companies listed in the same industry.
The 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:

PHM's Return On Assets of 16.98% is amongst the best of the industry. PHM outperforms 96.92% of its industry peers.
PHM has a Return On Equity of 24.89%. This is amongst the best in the industry. PHM outperforms 87.69% of its industry peers.
With an excellent Return On Invested Capital value of 19.79%, PHM belongs to the best of the industry, outperforming 95.38% of the companies in the same industry.
PHM had an Average Return On Invested Capital over the past 3 years of 18.34%. This is significantly above the industry average of 12.02%.
The last Return On Invested Capital (19.79%) for PHM is above the 3 year average (18.34%), which is a sign of increasing profitability.
PHM has a better Profit Margin (16.62%) than 93.85% of its industry peers.
In the last couple of years the Profit Margin of PHM has grown nicely.
PHM has a Operating Margin of 21.28%. This is amongst the best in the industry. PHM outperforms 93.85% of its industry peers.
PHM's Operating Margin has improved in the last couple of years.
In the last couple of years the Gross Margin of PHM has grown nicely.

How do we evaluate the Health 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:

An Altman-Z score of 5.62 indicates that PHM is not in any danger for bankruptcy at the moment.
PHM's Altman-Z score of 5.62 is amongst the best of the industry. PHM outperforms 84.62% 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.
PHM has a better Debt to FCF ratio (1.67) than 73.85% of its industry peers.
A Debt/Equity ratio of 0.19 indicates that PHM is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.19, PHM is in the better half of the industry, outperforming 67.69% of the companies in the same industry.
A Current Ratio of 4.17 indicates that PHM has no problem at all paying its short term obligations.
With a decent Current ratio value of 4.17, PHM is doing good in the industry, outperforming 72.31% of the companies in the same industry.
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.

Understanding NYSE:PHM's Growth

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:PHM, the assigned 5 reflects its growth potential:

PHM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.36%, which is quite good.
The Earnings Per Share has been growing by 25.08% on average over the past years. This is a very strong growth
Measured over the past years, PHM shows a quite strong growth in Revenue. The Revenue has been growing by 9.53% on average per year.
The Earnings Per Share is expected to grow by 9.14% on average over the next years. This is quite good.

More Decent Value stocks can be found in our Decent Value screener.

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

Disclaimer

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.