PHM

Fundamentals to Watch About Pulte (PHM)

Pulte logged a 2.7% change during today's evening session, and is now trading at a price of $58.31 per share. The S&P 500 index moved 1.0% and the Nasdaq posted a 2.0% change.

Pulte shares moved 34.0% over the last 52 weeks, with a high of $60.89 and a low of $35.03. During this time, the stock outperformed the S&P 500 index by 45.0%. As of January 2022, the company's 50-day average price is $55.0. PulteGroup, Inc., through its subsidiaries, primarily engages in the homebuilding business in the United States. The large-cap Consumer Cyclical company has 6,524 full time employees and is based in Atlanta, GA. Pulte has returned a 1.1% dividend yield over the last 12 months.

Snapshot of the Company's Strong Financials:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (k) $10,212,957 $11,036,082 $13,926,882 $16,228,995
Gross Margins 23.5% 25.2% 27.2% 29.8%
Operating Margins 13.1% 15.8% 18.4% 21.2%
Net Income (k) $1,016,700 $1,406,839 $1,946,320 $2,617,317
Net Margins 9.96% 12.75% 13.98% 16.13%
Earnings Per Share $3.66 $5.18 $7.43 $11.01
Diluted Shares (k) 275,297 269,414 259,928 224,311
Free Cash Flow (k) $1,019,426 $1,725,988 $931,240 $555,805
Capital Expenditures (k) -$58,119 -$58,354 -$72,781 -$112,661
Net Current Assets (k) $4,880,718 $6,001,845 $6,858,752 $8,220,967
Current Ratio 5.68 5.93 4.95 5.46
Long Term Debt (k) $3,091,613 $3,164,123 $2,655,166 $2,632,238
Net Debt / EBITDA 1.33 0.32 0.33 0.44

Pulte Is Undervalued at Today's Prices:

Compared to the Consumer Cyclical sector's average of 22.33, Pulte has a trailing twelve month P/E ratio of 5.3 and, according to its EPS guidance of 7.07, an expected P/E ratio of 8.2. Pulte's PEG ratio is 0.22 based on its 24.25% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Pulte's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 0.41, which still suggests that company's shares are possibly undervalued.

Furthermore, Pulte is likely undervalued in terms of its equity because its P/B ratio is 1.5 compared to its sector average of 3.12. The company's shares are currently trading -25.1% below their Graham number, implying there is a margin of safety for the stock. The Graham number is calculated according to the formula:

√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 6.82 * 39.471) = $77.83

Pulte Is the Subject of Mixed Market Indicators:

12 analysts are following Pulte and have set target prices ranging from $54.0 to $83.0 per share. On average, they have given the company a rating of buy. At the current price of $58.31, PHM is trading -11.54% away from its average analyst target price of $65.92 per share, implying an analyst consensus of some upside potential for the stock.

The company has an average amount of shares sold short since 4.2% of the company's shares are tied to short positions. Institutions own 93.9% of Pulte's shares, while the insider ownership rate stands at 0.76%. The biggest shareholder is the Vanguard Group, Inc. with a 12% stake in the company worth approximately $1,543,534,658.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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