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    PulteGroup (PHM) Faces Lower Earnings Estimates, Is It Still 13% Below Fair Value?

    Simply Wall St·07/21/2026 08:20:47
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    Analysts covering PulteGroup (PHM) expect upcoming quarterly earnings of $2.38 per share and revenue of $3.98b, both indicating year over year declines that may reshape how investors frame the homebuilder’s near term outlook.

    See our latest analysis for PulteGroup.

    PulteGroup’s share price has eased recently, with a 1 day share price return of 2.30% decline and a 90 day share price return of 4.24% decline. However, the 5 year total shareholder return of 142.12% indicates investors who stayed invested have still seen substantial gains.

    If you are reassessing housing exposure ahead of the next earnings report, it could be a good moment to broaden your search and check out 18 top founder-led companies

    Analysts see PulteGroup trading about 13% below their average price target and around 4% below some fair value estimates, even as earnings expectations are being cut. Is this discount a margin of safety or a warning sign?

    Most Popular Narrative: 35.3% Undervalued

    Compared with PulteGroup’s last close of $123.18, the most followed narrative anchors fair value much higher at $190.45, based on detailed assumptions about margins, growth and capital efficiency.

    PulteGroup has transformed from a cyclical builder to a highly efficient capital machine. The company focuses on leveraging asset light strategies to build strategic advantages within the housing market, which is described as being supported by structural undersupply. PHM’s advantage in this narrative lies in its ability to manufacture its own demand by maintaining mortgage incentives at 9.9% of home sale revenues, which is presented as successfully neutralising high interest rates to deliver a ROE of 18% (2025) backed by a 11.2% debt-to-capital ratio, characterised here as providing a large margin of safety. With 2026 guidance in the narrative pointing toward stable gross margins in a range between 24.5% and 25.0%, PHM is described as trading at a significant discount to its intrinsic value.

    Read the complete narrative.

    This narrative reaches its higher fair value estimate for PulteGroup by relying on resilient margins, measured growth and a future earnings multiple that assumes the market eventually rewards this profile. Want to see which specific revenue path and profit assumptions sit underneath those conclusions?

    Result: Fair Value of $190.45 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, this PulteGroup narrative could be knocked off course if the DOJ antitrust probe escalates, or if higher mortgage incentives pressure margins more than expected.

    Find out about the key risks to this PulteGroup narrative.

    Next Steps

    If the mixed sentiment around PulteGroup has you weighing both the upside and the risks, move quickly to examine the same data and pressure test the 2 key rewards and 1 important warning sign

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    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.