Can PulteGroup’s Strong Multi Year Rally Still Offer Value in 2025?

• If you are wondering whether PulteGroup's stock still offers value after a strong run, you are not alone. This article is designed to unpack exactly that question in plain language.
• The share price has climbed about 1.1% over the last week, 5.1% over the past month, and is up 15.6% year to date, adding to a striking 184.5% gain over 3 years and 187.6% over 5 years.
• Some of this momentum has been driven by ongoing strength in US housing demand and builder confidence, as markets continue to digest structurally tight housing supply and a gradual shift in interest rate expectations. Investors are also reacting to policy debates around housing incentives and infrastructure, which could meaningfully affect long term order growth and land values for large homebuilders like PulteGroup.
• Despite those gains, PulteGroup scores a 4/6 on our valuation checks. This suggests it still screens as undervalued on most, but not all, metrics. Next we will walk through the main valuation approaches, before finishing with a more holistic way to think about what the market might be missing.

PulteGroup delivered 8.2% returns over the last year. See how this stacks up to the rest of the Consumer Durables industry.

Approach 1: PulteGroup Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth today by projecting the cash it could generate in the future and then discounting those cash flows back to their value in $ today.

For PulteGroup, the model starts with last twelve months Free Cash Flow of about $1.56 billion and uses analyst forecasts for the next few years, then gradually tapers growth in later years based on Simply Wall St extrapolations. By 2035, annual Free Cash Flow is projected to be roughly $2.03 billion in $ terms, reflecting steady but moderating growth as the business matures.

Adding up all of those discounted cash flows under a 2 Stage Free Cash Flow to Equity framework gives an estimated intrinsic value of about $153.86 per share. Compared with the current share price, the DCF implies PulteGroup is trading at roughly a 19.2% discount. This suggests there could be meaningful upside if these cash flow assumptions prove accurate.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests PulteGroup is undervalued by 19.2%. Track this in your watchlist or portfolio, or discover 910 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for PulteGroup.

Approach 2: PulteGroup Price vs Earnings

For profitable companies like PulteGroup, the price to earnings, or PE, ratio is a straightforward way to see how much investors are willing to pay for each dollar of current earnings. A higher PE typically reflects stronger growth expectations or lower perceived risk, while a lower PE can signal slower growth, higher risk, or a potential bargain if the outlook is better than the market assumes.

PulteGroup currently trades on a PE of about 9.22x, which is below both the Consumer Durables industry average of roughly 10.66x and the broader peer group average of around 12.06x. Simply Wall St also calculates a proprietary Fair Ratio for each company. This is the PE you might reasonably expect given its earnings growth outlook, profitability, industry, market cap, and specific risk profile, rather than just how it compares with a generic peer set.

For PulteGroup, that Fair Ratio is estimated at about 15.56x, well above the current 9.22x. This gap suggests the market is not fully crediting the company for its fundamentals and risk profile, which points to a stock that still appears attractively priced on earnings.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your PulteGroup Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, a simple tool on Simply Wall St's Community page that lets you connect your view of PulteGroup's story with your own revenue, earnings, and margin assumptions. You can then link that forecast to a Fair Value and compare it to the current share price to decide whether to buy or sell. The numbers update dynamically as new news and earnings arrive. For example, a more optimistic investor might build a Narrative where resilient active adult demand, Sunbelt migration and margin discipline justify a Fair Value closer to the high analyst target of around 163 dollars. A more cautious investor could create a Narrative that leans into affordability risks, softer volumes and sector multiple pressure, landing nearer the low end of about 98 dollars. Each Narrative transparently shows how changes in the story flow through to the forecast and ultimately to what investors believe the stock is worth today.

Do you think there's more to the story for PulteGroup? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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