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Atlanta, Georgia-based PulteGroup, Inc. (PHM) engages in the homebuilding business. Valued at $21.8 billion by market cap, the company sells and constructs homes, and purchases, develops, and sells residential land and develops active adult communities. PHM also provides mortgage financing, title insurance, and other services to home buyers.
Shares of this homebuilding giant have underperformed the broader market over the past year. PHM has gained 3.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 22.3%. In 2025, PHM stock is down 1.4%, compared to the SPX’s 4% rise on a YTD basis.
Narrowing the focus, PHM’s underperformance is also apparent compared to the SPDR S&P Homebuilders ETF (XHB). The exchange-traded fund has gained about 7.6% over the past year. Moreover, the ETF’s 2.1% gains on a YTD basis outshine the stock’s losses over the same time frame.
PHM’s underperformance is due to the need for builders to ramp up incentives in the face of high mortgage rates, increased competition, limited affordability, and rising prices, keeping many prospective buyers on the sidelines, especially first-time buyers. In addition, rising construction costs and uncertainty over Trump administration’s trade and immigration policies are also fueling worries about builder profit margins.
On Jan. 30, PHM shares closed up more than 4% after reporting its Q4 results. Its EPS came in at $4.43, up 35.1% year over year. The company’s revenue was $4.9 billion, beating Wall Street forecasts of $4.7 billion.
For fiscal 2025, ending in December, analysts expect PHM’s EPS to decline 7.2% to $12.32 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 16 analysts covering PHM stock, the consensus is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings, one “Moderate Buy,” five “Holds,” and one “Strong Sell.”
This configuration is more bullish than two months ago, with seven analysts suggesting a “Strong Buy.”
On Jan. 30, UBS Group AG (UBS) analyst John Lovallo maintained a “Buy” rating on PHM with a price target of $151, implying a robust potential upside of 40.6% from current levels.
The mean price target of $135.03 represents a 25.7% premium to PHM’s current price levels. The Street-high price target of $179 suggests an ambitious upside potential of 66.6%.
