NYSE:PHM is an undervalued gem with solid fundamentals.

Our stock screener has spotted PULTEGROUP INC (NYSE:PHM) as an undervalued stock with solid fundamentals. NYSE:PHM shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

How do we evaluate the Valuation for 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 7 out of 10:

• With a Price/Earnings ratio of 7.67, the valuation of PHM can be described as very cheap.
• Based on the Price/Earnings ratio, PHM is valued cheaply inside the industry as 83.08% of the companies are valued more expensively.
• Compared to an average S&P500 Price/Earnings ratio of 28.58, PHM is valued rather cheaply.
• A Price/Forward Earnings ratio of 8.27 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 73.85% 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 (95.03), we can say PHM is valued rather cheaply.
• Based on the Enterprise Value to EBITDA ratio, PHM is valued cheaper than 90.77% of the companies in the same industry.
• 75.38% of the companies in the same industry are more expensive than PHM, based on the Price/Free Cash Flow ratio.
• The excellent profitability rating of PHM may justify a higher PE ratio.

How do we evaluate the Profitability for NYSE:PHM?

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:

• The Return On Assets of PHM (17.76%) is better than 96.92% of its industry peers.
• Looking at the Return On Equity, with a value of 25.44%, PHM belongs to the top of the industry, outperforming 87.69% of the companies in the same industry.
• PHM has a better Return On Invested Capital (20.34%) than 95.38% of its industry peers.
• Measured over the past 3 years, the Average Return On Invested Capital for PHM is significantly above the industry average of 12.03%.
• The 3 year average ROIC (19.62%) for PHM is below the current ROIC(20.34%), indicating increased profibility in the last year.
• PHM's Profit Margin of 17.18% is amongst the best of the industry. PHM outperforms 93.85% of its industry peers.
• In the last couple of years the Profit Margin of PHM has grown nicely.
• PHM's Operating Margin of 21.88% is amongst the best of 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.

Looking at the Health

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 6 out of 10:

• The Debt to FCF ratio of PHM is 1.37, which is an excellent value as it means it would take PHM, only 1.37 years of fcf income to pay off all of its debts.
• The Debt to FCF ratio of PHM (1.37) is better than 73.85% of its industry peers.
• PHM has a Debt/Equity ratio of 0.18. This is a healthy value indicating a solid balance between debt and equity.
• Looking at the Debt to Equity ratio, with a value of 0.18, PHM is in the better half of the industry, outperforming 70.77% of the companies in the same industry.
• A Current Ratio of 4.49 indicates that PHM has no problem at all paying its short term obligations.
• PHM has a Current ratio of 4.49. This is in the better half of the industry: PHM outperforms 72.31% of its industry peers.

Evaluating Growth: NYSE:PHM

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:

• The Earnings Per Share has grown by an impressive 25.74% over the past year.
• The Earnings Per Share has been growing by 32.15% on average over the past years. This is a very strong growth
• Looking at the last year, PHM shows a quite strong growth in Revenue. The Revenue has grown by 11.74% in the last year.
• PHM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.94% yearly.

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

For an up to date full fundamental analysis you can check the fundamental report of PHM

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.