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With a market cap of $29.5 billion, Atlanta, Georgia-based PulteGroup, Inc. (PHM) operates in the homebuilding and financial services sectors, providing residential housing and mortgage financing solutions across the U.S. The company develops a variety of housing options under brands like Pulte Homes, Centex, and Del Webb, while also offering mortgage and title services through Pulte Mortgage.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and PulteGroup fits this criterion perfectly. PulteGroup stands out for its innovative approach to building customizable homes that cater to diverse lifestyles, including first-time buyers, move-up buyers, and active adults.
However, the homebuilder has declined 2.2% from its 52-week high of $144.18, reached on Sep. 18. Over the past three months, shares of PHM have increased 26.9%, outperforming the broader Dow Jones Industrials Average's ($DOWI) 6.9% rise over the same period.
Longer term, PulteGroup has risen 36.6% on a YTD basis, outpacing DOWI's 10.1% gain. Additionally, over the past 52 weeks, PHM shares have surged 84%, compared to DOWI’s 19.9% return during the same period.
PHM has shown a bullish trend, consistently trading above its 200-day moving average since last year. Also, since November last year, the stock has stayed above its 50-day moving average despite few fluctuations.
PulteGroup has outperformed due to strong new home sales growth amid a housing shortage, builder price cuts that boosted demand, and favorable conditions like easing inflation and the potential for lower mortgage rates. Moreover, the stock rose marginally on Jul. 23 after the company reported better-than-expected Q2 adjusted EPS of $3.58 and revenue of $4.6 billion, driven by strong demand for new homes amid a shortage of existing houses. The company also reported increased home sales revenue and higher average selling prices, enhancing investor sentiment.
To emphasize PHM’s outperformance, its rival, Meritage Homes Corporation (MTH), has lagged behind PHM. Meritage Homes has seen a 16.3% rise on a YTD basis and gained 56.6% over the past 52 weeks.
Despite PHM's outperformance, analysts are cautiously optimistic about its prospects, with a consensus “Moderate Buy” rating from the 16 analysts covering the stock, and the mean price target of $141.80 suggests a marginal premium to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
